EFFECT OF CAPTIVE SUPPLY ON FARM-TO-WHOLESALE BEEF MARKETING MARGIN

Debates about captive supplies have been ongoing for more than a decade. This study investigates the effects captive supplies have on the beef farm-to-wholesale marketing margin. A relative price spread (RPS) model is used to estimate beef farm-to-wholesale marketing margins. Estimates indicate that forward contracts and marketing agreements have a small positive relationship with margins that is marginally significant. Packer fed cattle may or may not be related to margins to depending upon model specification