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The Market for U.S. Livestock Feed Proteins

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  • Kenneth H. Mathews, Jr.
  • Michael J. McConnell

Abstract

Parameters that characterize markets for livestock feed ingredients and inform an increasing array of policies motivated by a range of environmental, market, and animal disease issues are largely absent from the literature, which necessitates the use of often misleading assumptions in analyses of proposed feed-market policies. Such parameters are derived here from a theoretically consistent, dual translog cost model of U.S. protein and energy feed markets. Own-price elasticities ranged from a relatively inelastic −0.139 for feedgrains to a relatively elastic −0.568 for meat and bone meal (MBM). The cross elasticity for ethanol co-products and oilseed meals (0.168) is larger than the elasticity with co-products and feedgrains (0.024). Higher prices for protein feeds likely result in some substitution of feed grains for some protein (e.g. corn by oilseed meals = 0.125), which may also partially account for the relatively small feedgrains cross elasticity. Policies implemented as a result of bovine splongiform encephalopathy adversely affected the share of total costs attributed to MBM, but had a positive effect on oilseed meal cost share.

Suggested Citation

  • Kenneth H. Mathews, Jr. & Michael J. McConnell, 2012. "The Market for U.S. Livestock Feed Proteins," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 34(4), pages 555-569.
    • Handle: RePEc:oup:apecpp:v:34:y:2012:i:4:p:555-569.
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    File URL: http://hdl.handle.net/10.1093/aepp/pps030
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    Cited by:

    1. Gohin, Alexandre, 2017. "On the direct, indirect and induced impacts of public policies: The European biofuel case," Working Papers 264955, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    2. Alexandre Gohin, 2017. "On the direct, indirect and induced impacts of public policies: The European biofuel case," Working Papers SMART 17-09, INRAE UMR SMART.
    3. Hill, Megan & Shanoyan, Aleksan & Aldrich, Greg, 2022. "Animal Protein-Based Ingredients in Pet Food: Analysis of Supply Chain and Market Drivers," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322509, Agricultural and Applied Economics Association.
    4. Dong Hee Suh & Charles B. Moss, 2016. "Dynamic interfeed substitution: implications for incorporating ethanol byproducts into feedlot rations," Applied Economics, Taylor & Francis Journals, vol. 48(20), pages 1893-1901, April.

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