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Value-Based Marketing: A Dsicussion of Issues and Trends in the Slaughter Cattle Market

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  • Fausti, Scott W.
  • Diersen, Matthew A.
  • Qasmi, Bashir A.
  • Li, Jing

Abstract

Pricing and technological innovation are discussed within the context of the beef industry’s value-based marketing initiative. Cash and contract marketing practices for fed cattle are addressed with respect to slaughter volume and pricing methods (live, dressed, and grid). A methodology for estimating grid market share of weekly slaughter volume, based on USDA market reports (2004–2009), is introduced. Weekly grid market shares for the cash and contract markets are derived. Summary statistics indicate that grid pricing has become an important pricing mechanism, but has not surpassed average pricing with respect to slaughter volume market share.

Suggested Citation

  • Fausti, Scott W. & Diersen, Matthew A. & Qasmi, Bashir A. & Li, Jing, 2009. "Value-Based Marketing: A Dsicussion of Issues and Trends in the Slaughter Cattle Market," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 28(2).
  • Handle: RePEc:ags:jloagb:127768
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    References listed on IDEAS

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    1. Ted C. Schroeder & Clement E. Ward & James R. Mintert & Derrell S. Peel, 1998. "Value-Based Pricing of Fed Cattle: Challenges and Research Agenda," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 20(1), pages 125-134.
    2. Koontz, Stephen R. & Hoag, Dana L. & Brethour, John R. & Walker, Jodine, 2008. "Production Inefficiency in Fed Cattle Marketing and the Value of Sorting Pens into Alternative Marketing Groups Using Ultrasound Technology," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(03), pages 895-912, December.
    3. Yanyan Liu & Mary K. Muth & Stephen R. Koontz & John D. Lawrence, 2009. "Evidence of the role of marketing arrangements and valuation methods in improving beef quality," Agribusiness, John Wiley & Sons, Ltd., vol. 25(2), pages 147-163.
    4. Fausti, Scott W. & Qasmi, Bashir A., 2002. "Does The Producer Have An Incentive To Sell Fed Cattle On A Grid?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 5(01).
    5. repec:oup:revage:v:25:y:2003:i:1:p:203-217. is not listed on IDEAS
    6. Fausti, Scott W. & Feuz, Dillon M. & Wagner, John J., 1998. "Value Based Marketing For Fed Cattle: A Discussion Of The Issues," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 1(01).
    7. Jayson L. Lusk & Randall Little & Allen Williams & John Anderson & Blair McKinley, 2003. "Utilizing Ultrasound Technology to Improve Livestock Marketing Decisions," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(1), pages 203-217.
    8. Lusk, Jayson L., 2007. "Economic Value of Selecting and Marketing Cattle by Leptin Genotype," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 32(02), August.
    9. Ward, Clement E., 2005. "Beef Packers’ Captive Supplies: An Upward Trend? A Pricing Edge?," Choices, Agricultural and Applied Economics Association, vol. 20(2).
    10. Koontz, Stephen R. & Hoag, Dana L. & Brethour, John R. & Walker, Jodine L., 2008. "Production Inefficiency in Fed Cattle Marketing and the Value of Sorting Pens into Alternative Marketing Groups Using Ultrasound Technology," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(03), December.
    11. Feuz, Dillon M., 1999. "Market Signals In Value-Based Pricing Premiums And Discounts," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(02), December.
    12. Scott W. Fausti & Dillon M. Feuz, 1995. "Production Uncertainty and Factor Price Disparity in the Slaughter Cattle Market: Theory and Evidence," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 533-540.
    13. Anderson, John D. & Zeuli, Kimberly A., 2001. "The Revenue Risk Of Value-Based Pricing For Fed Cattle: A Simulation Of Grid Vs. Average Pricing," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 4(03).
    14. Dillon M. Feuz & Scott W. Fausti & John J. Wagner, 1993. "Analysis of the efficiency of four marketing methods for slaughter cattle," Agribusiness, John Wiley & Sons, Ltd., vol. 9(5), pages 453-463.
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    Cited by:

    1. Scott W. Fausti & Zhiguang Wang & Bashir A. Qasmi & Matthew A. Diersen, 2014. "Risk and marketing behavior: pricing fed cattle on a grid," Agricultural Economics, International Association of Agricultural Economists, vol. 45(5), pages 601-612, September.
    2. Fausti, Scott W. & Qasmi, Bashir A. & Diersen, Matthew A. & Li, Jing & Lange, Brent, 2011. "The Affect of Animal Gender on Fed Cattle Producer Marketing Behavior," 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas 98541, Southern Agricultural Economics Association.
    3. Fausti, Scott & Diersen, Matthew & Qasmi, Bashir & Adamson, Bill, 2015. "The Influence of Market Power and Market Trends on Grid Market Signals," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(1), January.
    4. Fausti, Scott W. & Wang, Gerald & Diersen, Matthew A. & Qasmi, Bashir A., 2012. "Pricing Fed Cattle on a Grid: An Analysis of the Incentive Mechanism over Time," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119670, Southern Agricultural Economics Association.
    5. Fausti, Scott W. & Qasmi, Bashir A. & Diersen, Matthew A. & Stockton, Matthew C. & Adamson, Bill, 2013. "The Effect of Carcass Quality on the Grid versus Dressed Weight Carcass Revenue Differential," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142983, Southern Agricultural Economics Association.
    6. Thompson, Nathanael M. & DeVuyst, Eric A. & Brorsen, B. Wade & Lusk, Jayson L., 2016. "Using Genetic Testing to Improve Fed Cattle Marketing Decisions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(2), May.

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