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Impacts of Declining U.S. Retail Beef Demand on Farm-Level Beef Prices and Production

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  • John M. Marsh

Abstract

A systems model was estimated to determine the effects of declining U.S. retail beef demand on farm-level beef prices and production. Retail beef demand declined by nearly 66% from 1976 to 1999. Results indicate autonomous shifts in retail demand significantly impacted farm-level demands and production. Based on equilibrium multipliers, the 1976–99 reduction in beef demand decreased real slaughter cattle prices and production by 32.1% and 11.2%, respectively. Real feeder cattle prices and production decreased by 8.0% and 22.6%, respectively. Combining the decreases in farm prices and production, slaughter and feeder cattle producers experienced a real revenue reduction of $13.3 billion (61%) due to the long-term decline in demand. Copyright 2003, Oxford University Press.

Suggested Citation

  • John M. Marsh, 2003. "Impacts of Declining U.S. Retail Beef Demand on Farm-Level Beef Prices and Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 902-913.
    • Handle: RePEc:oup:ajagec:v:85:y:2003:i:4:p:902-913
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    File URL: http://hdl.handle.net/10.1111/1467-8276.00496
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    Cited by:

    1. Meilin Ma & Jayson L. Lusk, 2022. "Concentration and Resilience in the US Meat Supply Chains," NBER Chapters, in: Risks in Agricultural Supply Chains, National Bureau of Economic Research, Inc.
    2. Dragan Miljkovic & Daniel Mostad, 2007. "Obesity and low-carb diets in the united states: A herd behavior model," Agribusiness, John Wiley & Sons, Ltd., vol. 23(3), pages 421-434.
    3. Smith, Jenna M., 2007. "Hedonic Pricing of Bulls," SS-AAEA Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 2007, pages 1-23.
    4. Pardo-Jaramillo, Sergio & Muñoz-Villamizar, Andrés & Gomez-Gonzalez, Jose E., 2023. "Unveiling the influence of COVID-19 on the online retail market: A comprehensive exploration," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    5. Melissa G. S. McKendree & Glynn T. Tonsor & Ted C. Schroeder & Nathan P. Hendricks, 2020. "Impacts of Retail and Export Demand on United States Cattle Producers," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(3), pages 866-883, May.
    6. Miljkovic, Dragan & Mostad, Daniel, 2005. "Impact of Changes in Dietary Preferences on U.S. Retail Demand for Beef: Health Concerns and the Role of Media," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 23(2), pages 1-16.
    7. Frank, Joshua, 2008. "Is there an "animal welfare Kuznets curve"?," Ecological Economics, Elsevier, vol. 66(2-3), pages 478-491, June.
    8. Ferrier, Peyton & Lamb, Russell, 2007. "Government regulation and quality in the US beef market," Food Policy, Elsevier, vol. 32(1), pages 84-97, February.
    9. Wu, Feng & Guan, Zhengfei & Whitaker, Vance, 2015. "Optimizing yield distribution under biological and economic constraints: Florida strawberries as a model for perishable commodities," Agricultural Systems, Elsevier, vol. 141(C), pages 113-120.
    10. Marsh, John M., 2005. "Demand and Supply Factors in the Feed Grain Market: Effects on Corn Producers," Briefings 29212, Montana State University, Department of Agricultural Economics and Economics, Agricultural Marketing Policy Center.
    11. Atkinson, Rebecca & Sanders, Dwight R. & Jones, Karen & Altman, Ira J., 2010. "An Evaluation of Purebred Bull Pricing: Implications for Beef Herd Management," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2010, pages 1-9, November.
    12. Eivind Hestvik Braekkan & Sverre Braathen Thyholdt, 2014. "The Bumpy Road of Demand Growth--An Application to Atlantic Salmon," Marine Resource Economics, University of Chicago Press, vol. 29(4), pages 339-350.
    13. Marsh, John M., 2004. "Relative Volatility in the U.S. Beef Market," Briefings 29206, Montana State University, Department of Agricultural Economics and Economics, Agricultural Marketing Policy Center.
    14. Mérel, Pierre & Sexton, Richard J., 2017. "Buyer power with atomistic upstream entry: Can downstream consolidation increase production and welfare?," International Journal of Industrial Organization, Elsevier, vol. 50(C), pages 259-293.
    15. McKendree, Melissa G.S. & Tonsor, Glynn T. & Schroder, Ted C. & Hendricks, Nathan P., 2017. "Changing Impacts of Beef Demand on Cattle Producers," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252730, Southern Agricultural Economics Association.
    16. Boonsaeng, Tullaya & Wohlgenant, Michael K., 2006. "The Demand for Livestock by the U.S. Meat Processing Industry," 2006 Annual meeting, July 23-26, Long Beach, CA 21120, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Rao Fu & Chenguang Li & Liming Wang, 2021. "Market Power in the Irish Beef Processing Industry," Sustainability, MDPI, vol. 13(11), pages 1-18, June.
    18. R. Karina Gallardo & B. Wade Brorsen & Jayson Lusk, 2010. "Prediction markets: an experimental approach to forecasting cattle on feed," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 70(3), pages 414-426, November.
    19. Marsh, John M., 2005. "Livestock Marketing Issues: Impacts on Feed Grain Producers," Briefings 29218, Montana State University, Department of Agricultural Economics and Economics, Agricultural Marketing Policy Center.
    20. Marsh, John M. & Brester, Gary W. & Smith, Vincent H., 2005. "The Impacts on U.S. Cattle Prices of Re-Establishing Beef Trade Relations," Briefings 29180, Montana State University, Department of Agricultural Economics and Economics, Agricultural Marketing Policy Center.
    21. Jared G. Carlberg & Robert J. Hogan & Clement E. Ward, 2009. "Game theory application to Fed Cattle procurement in an experimental market," Agribusiness, John Wiley & Sons, Ltd., vol. 25(1), pages 56-69.
    22. Marsh, John M. & Brester, Gary W. & Smith, Vincent H., 2005. "Re-opening the U.S./Canadian Border to Live Cattle and Beef Trade: Estimated Impacts on U.S. Beef Producers," Agricultural Marketing Policy Papers 29154, Montana State University, Department of Agricultural Economics and Economics, Agricultural Marketing Policy Center.
    23. Gordon, Daniel V., 2018. "Country of origin growth modelling for imported salted & dried (Klippfisk) products to Brazil," Journal of Commodity Markets, Elsevier, vol. 12(C), pages 31-43.

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