IDEAS home Printed from https://ideas.repec.org/a/oup/revage/v20y1998i1p125-134..html
   My bibliography  Save this article

Value-Based Pricing of Fed Cattle: Challenges and Research Agenda

Author

Listed:
  • Ted C. Schroeder
  • Clement E. Ward
  • James R. Mintert
  • Derrell S. Peel

Abstract

Beef has lost considerable market share because it does not offer adequate value to consumers. Important components of value are problems related to inadequate beef quality determination and pricing fed cattle on averages. This study summarizes results of industry surveys solicited to investigate problems with value-based fed cattle pricing. A research agenda to address the problems is proposed. Research needs include more information on the expected costs and benefits of a less subjective and improved beef quality identification system. More information is needed regarding economic trade-offs between beef carcass quality and cattle production management. All segments of the beef industry, from cow-calf producers through retailers, are realizing more opportunities to develop longer term contractual relationships. Many of these agreements substantially alter production and market risk and expected returns and therefore need in-depth investigation. In general, more research is needed on ways to improve both price and non price coordination of the complex beef market.

Suggested Citation

  • Ted C. Schroeder & Clement E. Ward & James R. Mintert & Derrell S. Peel, 1998. "Value-Based Pricing of Fed Cattle: Challenges and Research Agenda," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 20(1), pages 125-134.
    • Handle: RePEc:oup:revage:v:20:y:1998:i:1:p:125-134.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/1349538
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jones, Rodney & Schroeder, Ted & Mintert, James & Brazle, Frank, 1992. "The Impacts of Quality on Cash Fed Cattle Prices," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 24(2), pages 149-162, December.
    2. Dillon M. Feuz & Scott W. Fausti & John J. Wagner, 1993. "Analysis of the efficiency of four marketing methods for slaughter cattle," Agribusiness, John Wiley & Sons, Ltd., vol. 9(5), pages 453-463.
    3. Purcell, Wayne D., 1989. "Analysis of Demand for Beef, Pork, Lamb and Broilers: Implications for the Future," Staff Papers 232388, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
    4. Clement E. Ward, 1992. "Inter-Firm Differences in Fed Cattle Prices in the Southern Plains," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(2), pages 480-485.
    5. Ward, Clement E., 1981. "Short-Period Pricing Models For Fed Cattle And Impacts Of Wholesale Carcass Beef And Live Cattle Futures Market Prices," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 13(1), pages 1-8, July.
    6. Ward, Clement E., 1981. "Short-Period Pricing Models for Fed Cattle and Impacts of Wholesale Carcass Beef and Live Cattle Futures Market Prices," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 13(1), pages 125-132, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gyau, Amos & Somogyi, Simon A., 2012. "Exploring the multi-dimensional nature of price satisfaction in business to business suppliers' relationship performance," jbm - Journal of Business Market Management, Free University Berlin, Marketing Department, vol. 5(1), pages 42-53.
    2. Unterschultz, James R., 2000. "New Instruments For Co-Ordination And Risk Sharing Within The Canadian Beef Industry," Project Report Series 24046, University of Alberta, Department of Resource Economics and Environmental Sociology.
    3. Lyford, Conrad P. & Peterson, H. Christopher & Sterns, James A., 2002. "Industry Strategic Planning: Keeping Supply Chains Competitive," Journal of Food Distribution Research, Food Distribution Research Society, vol. 33(2), pages 1-13, July.
    4. Fausti, Scott W. & Wang, Gerald & Diersen, Matthew A. & Qasmi, Bashir A., 2012. "Pricing Fed Cattle on a Grid: An Analysis of the Incentive Mechanism over Time," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119670, Southern Agricultural Economics Association.
    5. Ferguson, Meagan & Anderson, John D., 2001. "Value Of Ultrasound-Based Predictions Of Carcass Quality Grade," 2001 Annual meeting, August 5-8, Chicago, IL 20620, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Ferrier, Peyton & Lamb, Russell, 2007. "Government regulation and quality in the US beef market," Food Policy, Elsevier, vol. 32(1), pages 84-97, February.
    7. Scott W. Fausti & Zhiguang Wang & Bashir A. Qasmi & Matthew A. Diersen, 2014. "Risk and marketing behavior: pricing fed cattle on a grid," Agricultural Economics, International Association of Agricultural Economists, vol. 45(5), pages 601-612, September.
    8. Greer, Heather C. & Trapp, James N., 2000. "Impact Of Alternative Grid Pricing Structures On Cattle Marketing Decisions," 2000 Conference, April 17-18 2000, Chicago, Illinois 18926, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    9. Pierce, Vern L. & Parcell, Joseph L. & Randle, Richard & Patterson, David J., 1999. "Determinants Of Sale Price And Farm Value In The Missouri Show-Me Select Replacement Heifer Program," 1999 Annual meeting, August 8-11, Nashville, TN 21545, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Fausti, Scott W. & Diersen, Matthew A. & Qasmi, Bashir A. & Li, Jing, 2010. "Value-Based Marketing: A Dsicussion of Issues and Trends in the Slaughter Cattle Market," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 27(1-2), pages 1-22.
    11. Anderson, John D. & Zeuli, Kimberly A., 2001. "The Revenue Risk Of Value-Based Pricing For Fed Cattle: A Simulation Of Grid Vs. Average Pricing," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 4(3), pages 1-12.
    12. Feuz, Dillon M., 1999. "Market Signals In Value Based Pricing Premiums And Discounts," 1999 Annual Meeting, July 11-14, 1999, Fargo, ND 35739, Western Agricultural Economics Association.
    13. Parcell, Joseph L. & Dhuyvetter, Kevin C. & Patterson, David J. & Randle, Richard, 2005. "The Value of Carcass Characteristic EPDs in Bred Heifer Price," 2005 Conference, April 18-19, 2005, St. Louis, Missouri 19041, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    14. Ali, Jabir & Kumar, Sushil, 2011. "Information and communication technologies (ICTs) and farmers’ decision-making across the agricultural supply chain," International Journal of Information Management, Elsevier, vol. 31(2), pages 149-159.
    15. Brester, Gary W. & Marsh, John M., 2001. "The Effects Of U.S. Meat Packing And Livestock Production Technologies On Marketing Margins And Prices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(2), pages 1-18, December.
    16. Schroeder, Ted C. & Coffey, Brian K. & Brester, Gary W., 2002. "Estimating The Effects Of Factors Influencing Grid Pricing Revenue," 2002 Annual Meeting, July 28-31, 2002, Long Beach, California 36604, Western Agricultural Economics Association.
    17. Fausti, Scott W. & Qasmi, Bashir A. & Diersen, Matthew A., 2008. "The Efficacy of the Grid Marketing Channel for Fed Cattle," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6884, Southern Agricultural Economics Association.
    18. Fausti, Scott W. & Qasmi, Bashir A. & Diersen, Matthew A., 2008. "The Efficacy of the Grid Marketing Channel for Fed Cattle," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6884, Southern Agricultural Economics Association.
    19. Yanyan Liu & Mary K. Muth & Stephen R. Koontz & John D. Lawrence, 2009. "Evidence of the role of marketing arrangements and valuation methods in improving beef quality," Agribusiness, John Wiley & Sons, Ltd., vol. 25(2), pages 147-163.
    20. Marsh, John M. & Brester, Gary W., 1999. "Technological Change In The U.S. Beef And Pork Sectors: Impacts On Farm-Wholesale Marketing Margins And Livestock Prices," Research Discussion Papers 29242, Montana State University, Department of Agricultural Economics and Economics, Trade Research Center.
    21. Ardian Harri & John Michael Riley & John D. Anderson & Keith H. Coble, 2009. "Managing economic risk in value‐based marketing of fed cattle," Agricultural Economics, International Association of Agricultural Economists, vol. 40(3), pages 295-306, May.
    22. Fausti, Scott W. & Qasmi, Bashir A. & Diersen, Matthew A & Adamson, Bill, 2014. "Grid Valuation of Beef Carcass Quality: Market Power and Market Trends," Economics Staff Papers 171423, South Dakota State University, Department of Economics.
    23. Fausti, Scott W. & Qasmi, Bashir A. & Diersen, Matthew A., 2008. "Grid Marketing and Beef Carcass Quality: A Discussion of Issues and Trends," Economics Staff Papers 37149, South Dakota State University, Department of Economics.
    24. Feuz, Dillon M., 1999. "Market Signals In Value-Based Pricing Premiums And Discounts," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(2), pages 1-15, December.
    25. Ge, Candi & Adam, Brian, 2017. "Value-added Traceability: Using a Whole-Chain Traceability System to Transfer Information about Multiple Attributes along a Multi-Stage Beef Supply Chain," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258278, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ward, Clement E., 2005. "Supply Effects on Price Discovery and Pricing Choice for Fed Cattle," 2005 Conference, April 18-19, 2005, St. Louis, Missouri 19034, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    2. Schroeder, Ted C. & Ward, Clement E. & Mintert, James & Peel, Derrell S., 1998. "Beef Industry Price Discovery: A Look Ahead," Staff Papers 232524, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
    3. Jones, Rodney D. & Schroeder, Ted C. & Mintert, James R. & Brazle, Frank, 1992. "The Impacts Of Quality On Cash Fed Cattle Prices," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 24(2), pages 1-14, December.
    4. Schulz, Lee L. & Schroeder, Ted C. & Ward, Clement E., 2011. "Trade-Related Policy and Canadian-U.S. Fed Cattle Transactions Basis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(2), pages 1-13, August.
    5. Azzam, Azzeddine M., 1998. "Competition in the US meatpacking industry: is it history?," Agricultural Economics, Blackwell, vol. 18(2), pages 107-126, March.
    6. Merle D. Faminow & Monica de Matos & R.J. Richmond, 1996. "Errors in slaughter steer and heifer prices," Agribusiness, John Wiley & Sons, Ltd., vol. 12(1), pages 79-87.
    7. Joseph, Kishore & Garcia, Philip & Peterson, Paul E., 2016. "Does the Boxed Beef Price Inform the Live Cattle Futures Price?," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236166, Agricultural and Applied Economics Association.
    8. Unknown, 1990. "Structural Change in Livestock: Causes, Implications, Alternatives," Research Institute on Livestock Pricing 232728, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
    9. 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.
    10. Marsh, John M. & Brester, Gary W., 1989. "Intertemporal Price Adjustments In The Beef Market: A Reduced Form Analysis Of Weekly Data," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(2), pages 1-11, December.
    11. Esipov Victor & Menkhaus Dale J. & Yakunina Alla, 1999. "Experimental Study of Forward and Spot Markets: Contract Failure as a Contributing Factor of Vertical Integration," EERC Working Paper Series 99-02e, EERC Research Network, Russia and CIS.
    12. Schroeder, Ted & Jones, Rodney & Mintert, James & Barkley, Andrew, 1991. "The Impacts of Captive Supplies on the Fed Cattle Industry," Staff Papers 232404, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
    13. Ward, Clement E., 1987. "Productivity-Concentration Relationship In The U.S. Meatpacking Industry," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 19(2), pages 1-6, December.
    14. Capps, Oral, Jr. & Love, H. Alan & Williams, Gary W. & Adams, Wendi L., 1999. "Examining Packer Choice Of Slaughter Cattle Procurment And Pricing Methods," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 28(1), pages 1-15, April.
    15. Tian Xia & John M. Crespi & Kevin C. Dhuyvetter, 2019. "Could packers manipulate spot markets by tying contracts to futures prices? And do they?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 67(1), pages 85-102, March.
    16. Schroeder, Ted C., 1997. "Fed Cattle Spatial Transactions Price Relationships," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 29(2), pages 347-362, December.
    17. Feuz, Dillon M., 1999. "Market Signals In Value-Based Pricing Premiums And Discounts," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(2), pages 1-15, December.
    18. Ward, Clement E., 2007. "Feedlot and Packer Pricing Behavior: Implications for Competition Research," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 7365, Western Agricultural Economics Association.
    19. Anderson, John D. & Ward, Clement E. & Koontz, Stephen R. & Peel, Derrell S. & Trapp, James N., 1997. "Estimating the Value of Public Information and Public Information Impacts on the Fed Cattle Market," Staff Papers 232521, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
    20. Anderson, John D. & Ward, Clement E. & Koontz, Stephen R. & Peel, Derrell S. & Trapp, James N., 1998. "Experimental Simulation Of Public Information Impacts On Price Discovery And Marketing Efficiency In The Fed Cattle Market," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(1), pages 1-17, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:revage:v:20:y:1998:i:1:p:125-134.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press or Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.