Impact of Beef Quality on Market Signals Transmitted by Grid Pricing
Value-based marketing is shaping cattle production; however, market signals differ dramatically depending on carcass quality. This study applies a two-stage coefficients of separate determination procedure to four regional fed cattle datasets sorted by grid value and by carcass quality attributes. Weight is the strongest signal sent when higher valued cattle and better quality cattle are sold on a grid. Quality characteristics send stronger signals when lower valued cattle and poorer quality cattle are sold on a grid. Producers of lower quality cattle can potentially gain $52 to $149 per head by improving quality and $113 to $150 per head by adding weight.
Volume (Year): 38 (2006)
Issue (Month): 01 (April)
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- Lawrence, John D. & Forristall, Cody & May, Gary, 2002. "Assessing the Cost of Beef Quality," Staff General Research Papers Archive 10467, Iowa State University, Department of Economics.
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- Greer, Heather C. & Trapp, James N., 2000. "Impact Of Alternative Grid Pricing Structures On Cattle Marketing Decisions," 2000 Conference, April 17-18 2000, Chicago, Illinois 18926, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
- Johnson, Heather C. & Ward, Clement E., 2005. "Market Signals Transmitted by Grid Pricing," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(03), pages -, December.
- Forristall, Cody & May, Gary J. & Lawrence, John D., 2002. "Assessing the Cost of Beef Quality," Staff General Research Papers Archive 2101, Iowa State University, Department of Economics.
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