Evonne buys TSN 43.67: Since beef prices have remained at significantly elevated levels, it seems to me that the higher end of this range will be unattainable in the short term.

Animal feed prices would naturally be dependent on input costs based on prices for soy and corn for instance, but I believe that poor quality or quantity of grazing lands equals a high cost of feed as well, at least in economic terms. The price of animal feed is also a very important factor in being an important factor in farmers' incentives; a high cost of animal feed and low price for beef would theoretically equal lower cattle production. I believe this is exactly what is at work here. With regards to pork and beef, it seems reasonable to assume that interferences in market mechanisms can occur, especially because we are dealing with products derived from animals. Obviously, economic theory offers great insights into market dynamics but also has serious shortcomings, for instance in explaining or predicting conditions under which markets fail to function effectively.


Eleanor:
Supply could increase for instance by farmers deciding to raise more cattle or through higher imports.

Clemmie:
Demand could take place through consumers looking for alternatives, such as through a shift in consumption away from beef and toward pork which, as we saw in the first graph, costs less than half the price of beef.

Lolita:
Classic economic theory suggests that either supply would increase to take advantage of these high prices, or demand would decrease as a result of those same prices, or both developments would happen at the same time.

Sindy:
The green line shows wholesale prices for beef per pound while the purple (lower) line shows the price spread between farm and wholesale prices.

Renee:
I am expecting further declines in pork prices as a result of higher production.

Lorene:
The red line displays the wholesale price development of pork products while the green (lower) line displays the price spread between farm and wholesale prices.

Clementine:
In pork prices, a somewhat similar but more modest trend can be seen starting in 2009 as well.

Tony:
Obviously, these prices were highly negative for Bridgford which uses very substantial amounts of both pork and beef for many of its meat-based snack products.

Stefania:
As can be seen in the graph, pork and especially beef prices traded at historically high levels during 2014, with pork prices showing a strong decline after peaking halfway through the year and beef prices staying at very elevated levels.

Teena:
These prices are therefore necessarily an interpretation of actual prices paid, which I assume to be based on a well-argued selection given the fact that the US Department of Agriculture is the source.

Tyson Foods (NYSE:TSN)
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