Economics of Increased Beef Grader Accuracy
Carcass data from more than 38,000 cattle was used to compare the called and measured yield grade in two different periods: before and after the slaughter plant incorporated another grader in the line to improve grading accuracy. The study shows that the graders accuracy significantly increased. The higher accuracy affected all yield grades, but most notably resulted in more called yield grade 4 and 5 carcasses. This analysis will develop insight of what will be the effect of instrument grading that will be more accurate than previously called grades.The results are expressed as the conditional distribution of the called yield grade for a given value of the measured yield grade. The pricing grid currently used by the industry was used to analyze the effect of the graders errors on the expected values of the premiums on both periods and by yield grade. The results show that the company has an incentive to improve accuracy of grading. Simulating the results of measured vs. called yield grade over prices at the time and a standard industry grid showed that the plant can benefit by $1.32 per head by increasing grading accuracy.
|Date of creation:||Apr 2007|
|Date of revision:|
|Contact details of provider:|| Postal: 326 Mumford Hall, MC-710, 1301 West Gregory Drive, Urbana, Illinois, 61801|
Phone: (217) 333-1810
Fax: (217) 333-5538
Web page: http://www.farmdoc.uiuc.edu/nccc134/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hueth, Brent & Marcoul, Philippe & Lawrence, John D., 2007.
"Grader Bias in Cattle Markets? Evidence from Iowa,"
Staff General Research Papers Archive
11465, Iowa State University, Department of Economics.
- Marcoul, Philippe & Lawrence, John D. & Hueth, Brent, 2006. "Grader Bias In Cattle Markets? Evidence From Iowa," 2006 Annual meeting, July 23-26, Long Beach, CA 21123, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Brent Hueth & John D. Lawrence & Philippe Marcoul, 2004. "Grader Bias in Cattle Markets? Evidence from Iowa," Center for Agricultural and Rural Development (CARD) Publications 04-wp355, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Peter Bogetoft & Henrik B. Olesen, 2000.
"Incentives, Information Systems and Competition,"
CIE Discussion Papers
2000-12, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- David A. Hennessy, 1996.
"Information Asymmetry as a Reason for Food Industry Vertical Integration,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 78(4), pages 1034-1043.
- Hennessy, David A., 1996. "Information Asymmetry As a Reason for Food Industry Vertical Integration," Staff General Research Papers Archive 5032, Iowa State University, Department of Economics.
- James A. Chalfant & Richard J. Sexton, 2002. "Marketing Orders, Grading Errors, and Price Discrimination," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 53-66.
When requesting a correction, please mention this item's handle: RePEc:ags:nccsci:37558. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.