Impacts from Government Regulations on the Canadian-U.S. Basis for Fed Cattle

Price differences between fed cattle prices in the U.S. and Canada (fed cattle basis) are important for Canadian cattle feeders. Discovery of BSE in Canada in 2003 and changes in exchange rates have made predicting basis difficult. An autoregressive model was estimated to determine factors affecting the basis and effects of governmental policies which addressed issues related to the fed cattle and beef trade. Resumption of beef and live cattle exports improved the basis but implementation of mandatory country of origin labeling in the U.S. adversely affected the basis