The Vanishing U. S. Cattle Cycle: A Stochastic Cycle Approach
By: Li, Yunhan; Shonkwiler, J. Scott
Li, Yunhan; Shonkwiler, J. Scott, The Vanishing U. S. Cattle Cycle: A Stochastic Cycle Approach, Journal of Agricultural and Resource Economics, Volume 46, Issue 3, September 2021, Pages 479-489
We re-examine the existence of cattle cycles based on U.S. beef cow inventories from 1979 to 2019. Our analysis begins with a basic first-order stochastic cycle model and finds a cattle cycle of 16.54 years, significantly longer than the presumed 10- to 12-year cycle. Typically cycles become longer before they disappear. Upon further investigation, we re-estimate the length of the cycle by applying a second-order stochastic cycle model which improves goodness of fit. Surprisingly, the cycle length is estimated to be infinitely long, implying the complete disappearance of the beef cow cycle.