Brian L. Buhr

A Principal-Agent Model for Evaluating the Economic Value of a Traceability System: A Case Study with Injection-site Lesion Control in Fed Cattle

Traceability can link the identity of cattle feeders with retail beef cuts. The economic problem for the packer implementing traceability is to choose the level of investment in traceability and the level of incentive payments to cattle feeders so that cattle feeders will avoid production actions that can damage retail beef cuts. A case study of injection-site lesions in cattle is the basis for technical parameters to numerically solve this principal-agent problem. Results show that cattle feeders will give injections in sites preferred by the packer even with low rates of successful tracking and minimal incentives. Copyright 2008, Oxford University Press.

Price determination and dynamic adjustments: An inverse demand system approach to meat products in the United States

In this study the process of retail meat price determination is depicted in the form of an inverse demand system taking into consideration the dynamic adjustments present in monthly consumption data. The general dynamic framework identifies both long run and short run effects in a systematic manner and allows direct estimation of the long run price and scale flexibilities that are consistent with theory. The empirical application based on monthly U.S. meat products data provides reasonable and promising results.

Dynamic Adjustment in Vertically Linked Markets: The Case of the U.S. Beef Industry

This duality model is used to investigate the dynamic structure of vertically linked sectors of the U.S. beef industry. The model employed allows for explicit hypothesis tests of the adjustment process and technology change. Vertically related sectors of the beef industry are included to emulate the organizational structure of the industry. Results suggest that the cow-calf, feedlot, and beef processing sectors of the U.S. industry face significant adjustment costs. Another important finding is that imports may provide a way for the U.S. beef industry to adjust to short-run market changes. Copyright 1997, Oxford University Press.

Information Technology and Changing Supply Chain Behavior: Discussion

industrialization and the vertical integration of the agrifood supply chain. While imperfect information and transaction costs are often cited as key incentives for vertical coordination of a supply chain, the role of information technology has largely been ignored. Undoubtedly, as the capabilities of electronic commerce improve, the agrifood supply chain will undergo further dramatic structural change. Most intriguing, the direction of structural change may reverse from closely aligned hierarchal relationships to a greater market orientation (Steinfield, Kraut, and Plummer). The primary reason is that Internet-based electronic commerce and electronic logistics have the potential to provide a competitive alternative to more formal supply chain relationships, such as tying agreements, contractual coordination, and vertical integration. The fast-paced advancements in information technology capabilities, the rise of the Internet, and the emergence of business-to-business (B2B) commerce makes this a highly fertile area for research in imperfect information and organizational structure. The papers by Kinsey and Salin directly address the status of information technology and its implications for supply chain management. Ward attempts to find evidence of structural changes to the supply chain (albeit not directly attributable to information technologies) by focusing on vertically related prices. Kinsey focuses her paper on an overview of electronic commerce systems and their effect on the manufacture-distributionwholesale-retail segment of the supply chain. Kinsey begins with an assessment of why electronic data interchange (EDI) systems mostly underperformed expectations. She also provides useful insights on how EDI al ered strategic investment in the supply chain. Beyond this historical perspective, Kinsey raises several key market issues related to the adoption of electronic information systems. This includes a discussion of the positive network externalities of information systems, the role of standardization in improving market efficiency, and lowering bar iers to entry and the potential uses of standardized information for cooperative planning, forecasting, and replenishment in the supply chain. The Internet provides a common platform with interconnectedness as an inherent feature. This makes obsolete

Market level economic impacts of modified soybeans

Introduction of biotechnologically modified soybeans will have significant impacts on the US soybean and associated industries. However, technical trade-offs of yield and quality attributes make it difficult to determine which modifications offer the highest potential pay-off and warrant the greatest emphasis in research, development, and, ultimately, market development. In this study, attention is focused on soybeans with modified protein and amino acid compositions where the primary end-use is livestock feed. A generalized dynamic simulation model combining a linear programming model and an econometric model allows for market interactions between soybean and soy-product industries, the livestock industry, and other closely related crop sectors. Results suggest all selected new soybeans promise significant welfare gains.

Dynamic adjustment in the US beef market with imports

This paper hypothesizes that while there are important qualitative differences in domestic beef and imported beef, beef and cattle imports also represent attempts by the US beef processing and wholesale sector to adjust to short-run changes in supply and demand. Dynamic production theory is applied to the problem to test for this adjustment process, and presents a production theory approach to meat trade that has previously been included in demand functions. The results of this analysis suggest that the method used provides a reasonable and appropriate representation of the import behavior of the US processing and wholesale beef sector.

Vertical diversification in the pork industry: a portfolio theory approach

Markowitz’s mean‐variance approach is used to identify the returns to vertical investment in the pork industry. In addition to previous efforts, this paper considers not only returns to stock ownership, but uses operating return on investment in pork slaughter and hog production to evaluate the impacts of vertical investment within the industry segment. Results suggest there are indeed diversification incentives for vertical investment in the pork industry. However, results do differ for vertical direct investment versus investment through stock ownership.