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Evolving Producer-Packer-Customer Linkages in the Beef and Pork Industries

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  • John D. Lawrence
  • Ted C. Schroeder
  • Marvin L. Hayenga

Abstract

The U.S. pork and beef sectors are rapidly moving from traditional cash markets to formal vertical linkages. In 1999, 27% of hogs and 65% of cattle were traded in the cash market and packers owned 18% of hogs and 5% of cattle; the rest were procured via marketing contracts. Contrary to popular opinion that plant efficiency is the impetus for the change, packers clearly identified quality concerns as the dominant reason for using marketing contracts or self-production. Quality standards and procurement systems to achieve them will increase in importance with the introduction of more branded pork and beef products.

Suggested Citation

  • John D. Lawrence & Ted C. Schroeder & Marvin L. Hayenga, 2001. "Evolving Producer-Packer-Customer Linkages in the Beef and Pork Industries," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 23(2), pages 370-385.
    • Handle: RePEc:oup:revage:v:23:y:2001:i:2:p:370-385.
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    File URL: http://hdl.handle.net/10.1111/1467-9353.00067
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    1. Ruiz, Josh & Ahern, James, 2004. "Optimal Fresh-Produce Packaging: Cost/Production Analysis Of Packing Styles In The Salinas Valley," Journal of Food Distribution Research, Food Distribution Research Society, vol. 35(1), pages 1-7, March.
    2. Yanguo Wang & Edward C. Jaenicke, 2006. "Simulating the Impacts of Contract Supplies in a Spot Market-Contract Market Equilibrium Setting," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 1062-1077.
    3. Ollinger, Michael & Moore, Danna L. & Chandran, Ram, 2004. "Meat And Poultry Plants' Food Safety Investments: Survey Findings," Technical Bulletins 33559, United States Department of Agriculture, Economic Research Service.
    4. MacDonald, James M. & Perry, Janet E. & Ahearn, Mary Clare & Banker, David E. & Chambers, William & Dimitri, Carolyn & Key, Nigel D. & Nelson, Kenneth E. & Southard, Leland W., 2004. "Contracts, Markets, and Prices: Organizing the Production and Use of Agricultural Commodities," Agricultural Economic Reports 34013, United States Department of Agriculture, Economic Research Service.
    5. Martinez, Stephen W. & Zering, Kelly D., 2004. "Pork Quality And The Role Of Market Organizaton," Agricultural Economic Reports 33973, United States Department of Agriculture, Economic Research Service.
    6. Miroslava BAVOROVÁ, 2010. "Structural changes in the German agri-food complex: the end of small and medium enterprises?," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 56(12), pages 591-600.
    7. Theuvsen, L. & Peupert, M., 2004. "Total Quality Management und Lebensmittelqualität," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 39.
    8. Deimel, Mark & Theuvsen, Ludwig & Ebbeskotte, Christof, 2008. "Von der Wertschöpfungskette zum Netzwerk: methodische Ansätze zur Analyse des Verbundsystems der Veredelungswirtschaft Nordwestdeutschlands," DARE Discussion Papers 0810, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    9. Reimer, Jeffrey J., 2004. "A Theory Of Packer Self Production In The Swine Industry," 2004 Annual meeting, August 1-4, Denver, CO 19936, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Preckel, Paul V. & Boehlje, Michael & Gray, Allan W. & Kim, Sounghun, 2004. "Vertically Aligned Vs. Open Market Coordination: Dominance Or Co-Existence?," 2004 Annual meeting, August 1-4, Denver, CO 20099, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Hueth, Brent & Ligon, Ethan & Dimitri, Carolyn, 2007. "AJAE Appendix: Agricultural Contracts: Data and Research Needs," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 89(5), pages 1-7, December.
    12. Jaenicke, Edward C. & Shields, Martin & Kelsey, Timothy W., 2007. "Food Processors' Use of Contracts to Purchase Agricultural Inputs: Evidence from a Pennsylvania Survey," Agricultural and Resource Economics Review, Cambridge University Press, vol. 36(2), pages 213-229, October.
    13. Hegde, S. Aaron, 2004. "An Economic History Of The Failure Of Broiler Futures," 2004 Annual meeting, August 1-4, Denver, CO 20397, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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