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Impact Of Corn Prices On Beef Product Mix And Prices

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  • Ospina, Enrique
  • Shumway, Richard

Abstract

The impact of corn price on composition and prices of slaughter beef is examined using an annual disaggregated econometric model of the U.S. livestock industry. Major attention is given to the implications of the reduced form model. The ceteris paribus effects of a 1% change in corn price on beef supply are greater than the effects of 1% change in all beef prices. The quality composition and relative prices of slaughter beef categories change dramatically in response to corn price changes. This is true both of current-year and long term effects. The greatest relative current-year impacts of an increase in corn price are decreases in choice beef slaughter and utility beef price. In the long run, a sustained corn price increase has its greatest influence in increasing utility beef slaughter, decreasing choice beef slaughter, and decreasing utility beef price. The use of corn price as a potential policy instrument for increasing the supply of lean beef or stabilizing producer incomes is also investigated.

Suggested Citation

  • Ospina, Enrique & Shumway, Richard, 1980. "Impact Of Corn Prices On Beef Product Mix And Prices," 1980 Annual Meeting, July 27-30, Urbana-Champaign, Illinois 278917, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea80:278917
    DOI: 10.22004/ag.econ.278917
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    References listed on IDEAS

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    1. Arzac, Enrique R., 1979. "An Econometric Evaluation Of Stabilization Policies For The U.S. Grain Market," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 4(1), pages 1-14, July.
    2. J. W. Freebairn & Gordon C. Rausser, 1975. "Effects of Changes in the Level of U.S. Beef Imports," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(4), pages 676-688.
    3. Nelson, Kenneth E., 1977. "Economic Effects of the 1976 Beef Grade Changes," Technical Bulletins 157855, United States Department of Agriculture, Economic Research Service.
    4. Arzac, Enrique R. & Wilkinson, Maurice, 1979. "Stabilization policies for united states feed grain and livestock markets," Journal of Economic Dynamics and Control, Elsevier, vol. 1(1), pages 39-58, February.
    5. Shuib, A.B. & Menkhaus, Dale J., 1977. "An Econometric Analysis Of The Beef-Feed Grain Economy," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 1(1), pages 1-5, June.
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    7. Ospina, Enrique & Shumway, C. Richard, 1979. "Disaggregated Analysis Of Short-Run Beef Supply Response," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 4(2), pages 1-18, December.
    8. Shlomo Reutlinger, 1966. "Short-Run Beef Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 48(4_Part_I), pages 909-919.
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