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Identifying Buyer Market Areas and the Impact of Buyer Concentration in Feeder Cattle Markets Using Mapping and Spatial Statistics

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  • DeeVon Bailey
  • B. Wade Brorsen
  • Michael R. Thomsen

Abstract

The size and shape of market areas for buyers from four major cattle feeding areas are determined by mapping data from the nation's largest video auction. Spatial statistics are also examined to determine their ability to identify market areas for feeder cattle. Mapping shows that procurement areas for feeder cattle buyers are large, irregularly shaped, and overlap substantially. A new statistic was developed to determine primary market areas. Feeder cattle buyers behave as oligopsonists in counties where most buyers are from one feeding area, and prices are higher for feeder cattle in counties where two or more market areas overlap.

Suggested Citation

  • DeeVon Bailey & B. Wade Brorsen & Michael R. Thomsen, 1995. "Identifying Buyer Market Areas and the Impact of Buyer Concentration in Feeder Cattle Markets Using Mapping and Spatial Statistics," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 309-318.
    • Handle: RePEc:oup:ajagec:v:77:y:1995:i:2:p:309-318.
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    File URL: http://hdl.handle.net/10.2307/1243541
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    Citations

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    Cited by:

    1. Sesmero Juan, 2018. "Spatial Pricing in Uncontested Procurement Markets: Regulatory Implications," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 16(1), pages 1-14, January.
    2. Dhuyvetter, Kevin C. & Schroeder, Ted C. & Simms, Danny D. & Bolze, Ronald P., Jr. & Geske, Jeremy, 1996. "Determinants Of Purebred Beef Bull Price Differentials," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(2), pages 1-15, December.
    3. Blank, Steven C. & Saitone, Tina & Sexton, Richard & Kalotia, Kabir & Forero, Larry & Nader, Glenn, 2011. "Location and distance effects on western calf and yearling prices," 2011 Annual Meeting, June 29-July 1, 2011, Banff, Alberta,Canada 291744, Western Agricultural Economics Association.
    4. James M. MacDonald & Charles R. Handy & Gerald E. Plato, 2002. "Competition and Prices in USDA Commodity Procurement," Southern Economic Journal, John Wiley & Sons, vol. 69(1), pages 128-143, July.
    5. Blank, Steven C. & Saitone, Tina L. & Sexton, Richard J., 2016. "Calf and Yearling Prices in the Western United States: Spatial, Quality, and Temporal Factors in Satellite Video Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-23.
    6. Yunhan Li & J. Scott Shonkwiler, 2021. "Assessing the Role of Ordering in Sequential English Auctions – Evidence from the Online Western Video Market Auction," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(1), pages 90-105, January.
    7. Meens-Eriksson, Sef, 2024. "Welfare effects of companies’ use of market power through spatial price discrimination: The case of the Swedish waste incineration market," Umeå Economic Studies 1021, Umeå University, Department of Economics.
    8. Allan F. Pinto & Brittney K. Goodrich & William Kelley & Max Runge, 2023. "Price determinants of bred heifers: Do reputations matter?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 71(1), pages 5-23, March.
    9. Holloway, Garth J. & Hertel, Thomas W. & Han, Frank M., 1997. "Does Market Power Matter?," Working Papers 225884, University of California, Davis, Department of Agricultural and Resource Economics.
    10. Chris Fawson & DeeVon Bailey & Terry Glover, 1996. "Price impacts of concentration, timing, and product characteristics in a feeder cattle video auction," Agribusiness, John Wiley & Sons, Ltd., vol. 12(5), pages 485-496.

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