Donald E. Farris

Input Substitution and the Distribution of Surplus Gains from Lower U.S. Beef-Processing Costs

Analysis of a switch from boxed beef to tray-ready beef processing demonstrates that limited substitution between farm and nonfarm inputs has a significant impact on the distribution of surplus gains. A two-input, two-output (beef and by-products) industry model was specified. Technical change was modeled as a shift in marketing input supply. This approach yields equivalent results to a demand increase from biased technical change. Using an estimated elasticity of substitution of 0.1 and parameter values from previous studies, the results indicate cattle producers would receive either 57% or 72% of surplus gains depending upon whether input substitution occurs.

Determinants Of Wholesale Beef-Cut Prices

Key determinants of monthly wholesale prices for 12 beef cuts include the quantity of the specific cut, stickiness in prices, marketing costs, quantities of pork and chicken, and seasonality. Seasonal patterns across the respective cuts are very different. Relative to the price in December, prices at the wholesale level in other months can be as much as 6 percent lower to as much as 21 percent higher.

A time-series analysis of the effects of government policies on the U.S. beef cattle industry

Government intervention in agricultural markets is extensive in most industrialized countries. In the United States, complex policies have been elaborated in an effort to change or regulate producer and consumer prices, farm incomes, and a host of other aspects of the food and fiber system. Within this complex array of policies, the U.S. beef cattle industry appears to be relatively free of government influence. A single policy, an import quota, has been used to stabilize prices and protect producer incomes (Henry. 1988). The effects of this policy have been analyzed by Freebaim and Rausser (1975). Arzac and Wilkinson (1979). Rausser and Hochman (1979). Chambers et al. ( 1981). and Martin and Heady (1984). In general, these studies show that eliminating the quota (or setting it at a higher level) would lead to decreases in beef prices ranging from 2 to 6 percent. Although the import quota is the only policy specitically targeted at the beef industry, policies designed to influence economic conditions in other sectors may indirectly affect beef. In fact, it is possible that the effects of feed grain and dairy policies are as great or greater than the direct effects of the import quota (Arzac and Wilkinson. 1979, and Ospina and Shumway. 1980). For example, Ospina and Shumway (1980) found that beef supplies are more responsive to changes in corn prices than to changes in their own price. Interest in the indirect effects of dairy policies on the beef industry was stimulated by the 1986 dairy termination program (DTP) (Marsh. 1988). This program had the potential to generate substantial increases in the supply of beef as a result of its provisions for the slaughter of large numbers of dairy cows. Marsh found that the DTP did lead to a fall in beef prices of about 5 percent.

Alternative fresh beef distribution systems: A Form-space approach

In recent years, new methods of fresh distribution have been adopted and|or tried to increase marketing efficiency. There is uncertainty as to the effectiveness of these new distribution methods compared to the old ones. In this paper, five alternative methods of fresh beef distribution were budgeted for ten regions in the State of Texas. These budgets were analyzed with a multidimension linear programming model. Although all systems entered the optimal solution when wage rates and processing capacities were varied, boxed-beef was clearly the leading system accounting for approximately 75% of the volume.