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Beef Feedlot Supply Response in Australia

Author

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  • Griffith, Garry R.
  • Coddington, Anna
  • Murdoch, Scott

Abstract

Reliable estimates of demand and supply elasticities are required for industry-wide evaluations of new agricultural technologies, new primary product promotion campaigns or new policy initiatives impacting on agricultural industries. In developing an equilibrium displacement model of the Australian beef industry, recent supply elasticities for feedlot beef in Australia were not available. The issue of consistency of throughput of feedlot beef and utilisation of feedlot capacity is also an important industry concern. Feedlot survey data were used to estimate supply response functions for feedlot beef. The results indicated that price response was much more inelastic than shown in previous work, reflecting perhaps the industrialisation of the industry in recent years and the significant level of foreign investment. The price of fed cattle plays the largest role in influencing decisions to place cattle on feed. The price of feed is also a major input affecting utilisation of feedlot capacity, however the price of feeder steers plays a lesser role in feedlot decision making than previously thought.

Suggested Citation

  • Griffith, Garry R. & Coddington, Anna & Murdoch, Scott, 2004. "Beef Feedlot Supply Response in Australia," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 12.
    • Handle: RePEc:ags:auagre:132076
    DOI: 10.22004/ag.econ.132076
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    References listed on IDEAS

    as
    1. David Aadland & DeeVon Bailey, 2001. "Short-Run Supply Responses in the U.S. Beef-Cattle Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 826-839.
    2. Zhao, Xueyan & Mullen, John D. & Griffith, Garry R. & Griffiths, William E. & Piggott, Roley R., 2000. "An Equilibrium Displacement Model of the Australian Beef Industry," Research Reports 28007, New South Wales Department of Primary Industries Research Economists.
    3. Buffier, B.D. & Freebairn, John W., 1975. "Response Function Estimates For Lot Fed Beef," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 43(01), pages 1-12, March.
    4. Griffith, Garry & I'Anson, Kym & Hill, Debbie & Vere, David, 2001. "Previous Supply Elasticity Estimates For Australian Broadacre Agriculture," Research Reports 280778, New South Wales Department of Primary Industries Research Economists.
    5. Frances Antonovitz & Richard Green, 1990. "Alternative Estimates of Fed Beef Supply Response to Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 475-487.
    6. Griffith, Garry & I'Anson, Kym & Hill, Debbie & Lubett, ROland & Vere, David, 2001. "Previous Demand Elasticity Estimates For Australian Meat Products," Research Reports 280777, New South Wales Department of Primary Industries Research Economists.
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    Cited by:

    1. Morales, Luis Emilio & Fleming, Euan M. & Wright, Vic & Griffith, Garry R. & Umberger, Wendy J., 2008. "Product And Branding Innovations In The Australian Beef Marketing System," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 5993, Australian Agricultural and Resource Economics Society.

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