The Impact of North American BSE Events on Live Cattle Futures Prices

This article investigates the effects of all 16 North American Bovine Spongiform Encephalopathy (BSE) cases on daily live cattle futures prices of six maturities. The article's objective is to examine whether any of these 16 BSE cases may have caused a structural break in live cattle futures pr...

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Bibliographic Details
Published in:American journal of agricultural economics 2008-12, Vol.90 (5), p.1279-1286
Main Authors: Jin, Yanhong H., Power, Gabriel J., Elbakidze, Levan
Format: Article
Language:English
Subjects:
Agricultural economics
Agrofood industry
Attitudes
Bans
Bovine Spongiform Encephalopathy
Cattle
Commodity prices
Empirical research
Farming
Futures
Futures market
G130
Impact analysis
Prices
Q140
Q160
Studies
Volatility
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Summary:This article investigates the effects of all 16 North American Bovine Spongiform Encephalopathy (BSE) cases on daily live cattle futures prices of six maturities. The article's objective is to examine whether any of these 16 BSE cases may have caused a structural break in live cattle futures prices and the magnitude and persistence of the effect of BSE cases on futures prices and price volatility by BSE case origin, chronology, and contract maturity month. The article finds that the live cattle futures market experienced a structural break detected in October 2003. Several factors may have contributed to this structural break, including the 2003 Canadian BSE case followed by an immediate import ban by the US on Canadian cattle and beef products; the partial lift of the import ban in August which allowed imports of boneless meat from cattle younger than 30 months; and speculation about further lifting the import ban on Canadian cattle between October and November.
ISSN:0002-9092
1467-8276
DOI:10.1111/j.1467-8276.2008.01217.x