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Future Directions for the Alberta Sheep Industry

Author

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  • Ryan, M.M.
  • Hawkins, M.H.

Abstract

The primary focus of this study is to examine the short term, medium term and long term supply response for lamb, wool and cull sheep for the Alberta sheep industry. The sensitivity of supply to changes in market prices in estimated using two alternative analytical techniques. The first technique used is the repressentative farm linear programming procedure. This technique involves the estimation of medium term supply response fro the three products from farm level information. The industry level supply response is then derived by summation of the individual farm level supply estimates. The alternative procedure relates to the estimation of short-run and long-run supply response directly from industry level data using an econometric procedure. The results from both procedures indicate that lamb supply is sensitive to changes in market prices in the medium and long term, but that the supply of wool and cull sheep are relatively stable over large price ranges. Furthermore, the stability of the sheep industry is examined using a Markov chain process. This analytical technique examines the movement of farms between different size groups over a thirty-five year period from the early 1950s to the mid 1980s. The results indicate that there is a trend toward increased concentration in the industry with medium and large size sheep producers accounting for an ever increasing share of the industry. Small sheep producers over the same time period however, have shown a dramatic decline in terms of absolute number and industry share. A minor focus of this tudy involves a preliminary analysis of the demand for fresh and frozen lamb in Alberta. The empirical estiamtes of demand indicate that the price may not be as important a variable in fluencing the demand for lamb as is the case with other red meats. This may be attributed to the special characteristics of the lamb market. These characteristics relate to the low volume, low frequency and seasonality associated with lamb consumption. In general, kamb is regarded as a speciality mean with peak consumption occurring at Easter and Christmas. For lamb, demographic and socioeconomic variables are key variables in terms of influencing aggregate demand. The marketing strategies available to the sheep industry include demand expansion programs, supply management boards and centralized selling agencies. A centralized selling agency could have a significant positive impact on the industry in terms of increasing operational efficiency and perhaps pricing efficiency. Finally, a strategically oriented demand expansion program may be a mroe useful approach to increasing the aggregate demand for lamb.

Suggested Citation

  • Ryan, M.M. & Hawkins, M.H., 1990. "Future Directions for the Alberta Sheep Industry," Project Report Series 232114, University of Alberta, Department of Resource Economics and Environmental Sociology.
  • Handle: RePEc:ags:ualbpr:232114
    DOI: 10.22004/ag.econ.232114
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    References listed on IDEAS

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    1. Powell, Alan A. & Gruen, Fred H.G., 1967. "The Estimation Of Production Frontiers: The Australian Livestock/Cereals Complex," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 11(1), pages 1-19, June.
    2. Hall, Nigel H. & Menz, Kenneth M., 1985. "Product Supply Elasticities for the Australian Broadacre Industries, Estimated with a Programming Model," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 53(01), pages 1-8, April.
    3. Richard H. Day, 1963. "On Aggregating Linear Programming Models of Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 45(4), pages 797-813.
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    Cited by:

    1. Faminow, Merle D., 2012. "Presentation By The Manitoba Red Meat Forum To The Wdo Steering Committee," Research Bulletins 124308, University of Manitoba, Department of Agribusiness and Agricultural Economics.

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