New Brazil study confirms 2021 findings on leather and cattle numbers
US-based agricultural economists Dr Gary Brester and Dr Kole Swanser have carried out a new study that confirms findings from work they did in 2021. Their conclusion, then and now, is that the sale of hides and production of leather have practically no bearing on cattle numbers.
In 2021, the two academics found that the value of hides only has a small influence on cattle numbers. They concluded that even if hide prices were to increase by 10%, the increase in cattle numbers in the US would be less than 0.2%.
Their new study, share by the Leather and Hide Council of America, focused on Brazil. It examined data covering the years between 1980 and 2019. In Brazil’s case, they found that a 10% increase in hide prices would lead to an increase in cattle production of a little over 0.3%.
The researchers used two different analytical approaches to examine this question thoroughly. First they used a test called the Granger Causality Test to determine whether changes in hide prices directly cause changes in cattle slaughter numbers. They found no evidence of such a direct relationship, suggesting that hide values are not a primary driver of cattle slaughter.
Second, the study investigated whether hide prices might have an indirect effect through their influence on cattle prices. The premise is that higher cattle prices could incentivise producers to raise more animals. Dr Brester’s and Dr Swanser’s research shows that this indirect pathway does exist, but they found it to be “remarkably weak”.
