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Carcass Quality Volume and Grid Pricing: An Investigation of Cause and Effect

Author

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

Abstract

The relationship between publically reported weekly grid premiums and discounts for specific carcass characteristics and the percentage of those characteristics reflected in total weekly slaughter volume (i.e., proportional slaughter volume) is investigated. Granger Causality and multi-lag VAR models were used to investigate if grid premiums and discounts were efficiently transmitting market signals to producers with respect to carcass quality attributes. The empirical evidence indicates that there is little evidence to suggest that grid prices are providing efficient price signals to buyers and sellers with respect to market valuation of desirable and undesirable beef carcass characteristics.

Suggested Citation

  • Fausti, Scott W. & Qasmi, Bashir A. & Li, Jing, 2009. "Carcass Quality Volume and Grid Pricing: An Investigation of Cause and Effect," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46215, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saeana:46215
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    References listed on IDEAS

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    1. Granger, C. W. J. & Newbold, Paul, 1986. "Forecasting Economic Time Series," Elsevier Monographs, Elsevier, edition 2, number 9780122951831 edited by Shell, Karl.
    2. 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).
    3. 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.
    4. 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), December.
    5. 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. Link, David J. & Almas, Lal K. & Brown, Michael S. & Lawrence, Ty E., 2011. "The Beneficial Impact of Sorting Heavy Cattle at Re-Implant," 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas 98732, Southern Agricultural Economics Association.

    More about this item

    Keywords

    Grid pricing; Granger Causality; slaughter cattle; beef carcass quality; Demand and Price Analysis; Livestock Production/Industries; Marketing; Q11; Q13;

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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