Endogenously determined cycles: empirical evidence from livestock industries

This paper applies the techniques of phase space reconstruction and recurrence quantification analysis to investigate U.S. livestock cycles in relation to recent literature on the business cycle. Results are presented for pork and cattle cycles, providing empirical evidence that the cycles themselves have slowly diminished. By comparing the evolution of production processes for the two livestock cycles we argue that the major cause for this moderation is largely endogenous. The analysis suggests that previous theoretical models relying solely on exogenous shocks to create cyclical patterns do not fully capture changes in system dynamics. Specifically, the biological constraint in livestock dynamics has become less significant while technology and information are relatively more significant. Concurrently, vertical integration of the supply chain may have improved inventory management, all resulting in a small, less deterministic, cyclical effect.