Beef price spread relationship with processing capacity utilization

Abstract We investigate the relationships of the often‐publicized live cattle to box beef price spread and weekly and Saturday slaughter capacity utilization (CU). We find that an increase in the price spread in the previous period does positively impact national Saturday slaughter CU under a low price spread regime, but not in the identified middle and high regimes. Also, changes in weekly or Saturday slaughter CU does not impact the price spread except for the high regime. Our results do not support the notion that weekly, or Saturday slaughter CU is used by the beef packers to control the price spread.