Price Relationships between Calves and Yearlings: An Updated Structural Change Assessment

This article updates and extends the understanding of U.S. feeder cattle price determi-nants. Structural change in the summer of 2008 was identified, with both calf and year-ling markets adjusting to become substantially more sensitive to changes in corn and expected live cattle prices. The impact of live cattle price expectations on feeder cattle prices is three or more times larger than the same proportional impact of corn price, and this relative impact has increased since 2008. Price spreads between calves and yearlings are also found to be more sensitive to input and output price changes than individual cat-tle price series. Combined, this enhances the understanding of increased price volatility in U.S. feeder cattle markets