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Effects of increased transportation costs on spatial price differences and optimum locations of cattle feeding and slaughter

Author

Listed:
  • Gregory M. Clary

    (Assistant Professor in the Agricultural Economics and Rural Sociology Department of Clemson University, Clemson, South Carolina)

  • Raymond A. Dietrich

    (Professor in the Agricultural Economics Department of Texas A&M University, College Station, Texas)

  • Donald E. Farris

    (Professor in the Agricultural Economics Department of Texas A&M University, College Station, Texas)

Abstract

A least-cost multiproduct transshipment model is developed to evaluate the impact of changes in interregional relationships in the cattle feeding|fed-beef economy as a result of increased transportation costs. Results indicate that Southern and Central Plains and Corn Belt cattle feeders would continue to account for nearly 85% of all cattle fed in the US in the short run. Slaughter generally was shown to remain production oriented as slaughter firms locate near concentrated sources of fed slaughter cattle. Results suggest that cattle feeders in the Southern and Central Plains may be faced with less favorable competitive positions when competing with western Corn Belt feedlots if transportation costs increase more than 50% relative to other input costs. Future increases in placements of feeder cattle would likely occur to a greater degree in the Corn Belt and to a lesser extent in the South.

Suggested Citation

  • Gregory M. Clary & Raymond A. Dietrich & Donald E. Farris, 1986. "Effects of increased transportation costs on spatial price differences and optimum locations of cattle feeding and slaughter," Agribusiness, John Wiley & Sons, Ltd., vol. 2(2), pages 235-246.
    • Handle: RePEc:wly:agribz:v:2:y:1986:i:2:p:235-246
    DOI: 10.1002/1520-6297(198622)2:2<235::AID-AGR2720020208>3.0.CO;2-#
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    References listed on IDEAS

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    1. Donald L. Byrkett & Richard A. Miller & E. Paul Taiganides, 1976. "Modeling the Optimal Location of the Cattle Feeding Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 58(2), pages 236-244.
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    Cited by:

    1. Blank, Steven C. & Saitone, Tina & Sexton, Richard & Kalotia, Kabir & Forero, Larry & Nader, Glenn, 2011. "Location and distance effects on western calf and yearling prices," 2011 Annual Meeting, June 29-July 1, 2011, Banff, Alberta,Canada 291744, Western Agricultural Economics Association.
    2. Tilley, Daniel S., 1989. "Value-Added Activities As A Rural Development Strategy: Discussion," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 21(1), pages 1-4, July.
    3. Blank, Steven C. & Saitone, Tina L. & Sexton, Richard J., 2014. "Seller-Offered Forward Contracts: An Additional Benefit to Cattle Producers from Satellite Video Auctions," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162323, Southern Agricultural Economics Association.

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