Quality differences across marketing arrangements and valuation methods in the beef industry
This presentation provided results of models of differences in levels and variances of cattle quality associated with use of particular marketing arrangements and valuation methods using data on fed cattle purchases by 29 large beef packing plants. Tighter vertical coordination through use of alternative marketing arrangements and more precise price signaling through use of different cattle valuation methods help improve beef quality because these mechanisms facilitate information exchange enabling producers to respond better to consumer demand. Results indicate fed cattle procured through marketing agreements and packer ownership had higher and more consistent quality compared to other types of arrangements. Fed cattle valued using carcass weight with a grid were associated with higher and more consistent quality.
Liu, YY., Muth, M., Koontz, S., & Lawrence, J. (2007). Quality differences across marketing arrangements and valuation methods in the beef industry. Journal of Agricultural and Resource Economics, 32(3), 567-567.