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Wholesale-Retail Marketing Margin Behavior in the Beef and Pork Industries

Author

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  • Marsh, John M.
  • Brester, Gary W.

Abstract

An econometric model is used to estimate real wholesale-retail marketing margins for beef and pork. From 1970 to 1998, these margins increased by 27% and 149%, while farm-wholesale margins declined. Wholesale-retail (WR) marketing margin increases have caused livestock producers to focus on the retail sector as a contributor to declining real livestock prices. Increases in WR margins may be related to increased demand and costs of value-added food products/services as well as increased market concentration in the retail grocery sector. Results indicate that retail factors, and to a lesser extent meat processing factors, significantly increased WR margins and decreased livestock prices.

Suggested Citation

  • Marsh, John M. & Brester, Gary W., 2004. "Wholesale-Retail Marketing Margin Behavior in the Beef and Pork Industries," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(01), April.
  • Handle: RePEc:ags:jlaare:31139
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    File URL: http://purl.umn.edu/31139
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    References listed on IDEAS

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    1. Hahn, William F. & Green, Richard D., 2000. "Joint Costs In Meat Retailing," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(01), July.
    2. Rigoberto A. Lopez & Elena Lopez, 2003. "The impact of imports on price-cost margins: An empirical illustration," Empirical Economics, Springer, vol. 28(2), pages 403-416, April.
    3. John R. Schroeter & Azzeddine M. Azzam, & Mingxia Zhang, 2000. "Measuring Market Power in Bilateral Oligopoly: The Wholesale Market for Beef," Southern Economic Journal, Southern Economic Association, vol. 66(3), pages 526-547, January.
    4. Ward, Clement E., 2002. "A Review of Causes for and Consequences of Economic Concentration in the U.S. Meatpacking Industry," CAFRI: Current Agriculture, Food and Resource Issues, Canadian Agricultural Economics Society, issue 03.
    5. A. M. Azzam & E. Pagoulatos, 1990. "Testing Oligopolistic And Oligopsonistic Behaviour: An Application To The Us Meat-Packing Industry," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(3), pages 362-370.
    6. Azzeddine M. Azzam & John R. Schroeter, 1995. "The Tradeoff between Oligopsony Power and Cost Efficiency in Horizontal Consolidation: An Example from Beef Packing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(4), pages 825-836.
    7. Ronald W. Cotterill, 1999. "Continuing Concentration in the U.S.: Strategic Challenges to an Unstable Status Quo," Food Marketing Policy Center Research Reports 048, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    8. Elitzak, Howard, 1999. "Food Cost Review, 1950-97," Agricultural Economics Reports 34053, United States Department of Agriculture, Economic Research Service.
    9. A. M. Azzam, 1992. "Testing The Competitiveness Of Food Price Spreads," Journal of Agricultural Economics, Wiley Blackwell, vol. 43(2), pages 248-256.
    10. Kaufman, Phillip R. & Newton, Doris J. & Handy, Charles R., 1993. "Grocery Retailing Concentration in Metropolitan Areas, 1954-82," Technical Bulletins 157042, United States Department of Agriculture, Economic Research Service.
    11. Bryan E. Melton & Wallace E. Huffman, 1995. "Beef and Pork Packing Costs and Input Demands: Effects of Unionization and Technology," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 471-485.
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    Cited by:

    1. Brester, Gary W., 2006. "Research and Publishing: Relevance and Irreverence," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(03), December.
    2. Maples, Joshua G. & Harri, Ardian & Riley, John Michael & Tack, Jesse B., 2013. "Marketing Margins and Input Price Uncertainty," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150604, Agricultural and Applied Economics Association.

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