By Matt Dabrowski The cattle market has experienced record prices this year, but that hasn’t stopped the price action from throwing us more than its share of curveballs, particularly in the futures markets. For much of this year, feedlot inventory has surprised to the upside, fat cattle prices have shown unexpected resistance, while calf prices have been eye popping. How can we make sense of things when markets seem crazy? Let’s use two tools of financial economics: price ratios and volatility. First consider consider the durable relationship between live cattle and feeder cattle futures prices. Historically, live cattle prices average...

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