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Evidence of the Role of Marketing Arrangements and Valuation Methods in Improving Beef Quality

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  • Muth, Mary K.
  • Liu, Yanyan
  • Koontz, Stephen
  • Lawrence, John D.

Abstract

Low and inconsistent beef quality has been blamed by some for the losses of beefï¾’s share of total meat consumption. Tighter vertical coordination through use of alternative marketing arrangements and more precise price signaling through use of different cattle valuation methods may help improve beef quality because these mechanisms facilitate information exchange enabling producers to respond better to consumer demand. For the congressionally mandated Livestock and Meat Marketing Study, we modeled differences in levels and variances of cattle quality associated with particular marketing arrangements and valuation methods using fed cattle purchase data from 29 large U.S. beef packing plants for October 2002 through March 2005. Results indicate fed cattle procured through marketing agreements and packer ownership had higher and more consistent quality compared to other types of arrangements. Auction market cattle quality was the most inconsistent. Fed cattle valued using carcass weight with a grid were associated with higher and more consistent quality.

Suggested Citation

  • Muth, Mary K. & Liu, Yanyan & Koontz, Stephen & Lawrence, John D., 1009. "Evidence of the Role of Marketing Arrangements and Valuation Methods in Improving Beef Quality," Staff General Research Papers Archive 13021, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:13021
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    1. Raper, Kellie Curry & Black, J. Roy & Hogberg, Michael & Hilker, James H., 2005. "Assessing Bottlenecks in Vertically Organized Beef Systems," Journal of Food Distribution Research, Food Distribution Research Society, vol. 36(1), pages 1-5, March.
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    4. 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.
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    Cited by:

    1. Soler, Louis-Georges & Thomas, Alban, 2020. "Is there a win–win scenario with increased beef quality and reduced consumption?," Review of Agricultural, Food and Environmental Studies, Institut National de la Recherche Agronomique (INRA), vol. 101(1), July.
    2. 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.
    3. 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.

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    More about this item

    Keywords

    alternative marketing arrangements; fed cattle; beef quality; grid pricing;
    All these keywords.

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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