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Impact of Beef Quality on Market Signals Transmitted by Grid Pricing

Published online by Cambridge University Press:  28 April 2015

Heather C. Johnson  and
Clement E. Ward
Heather C. Johnson
Affiliation:
Oregon State University
Clement E. Ward
Affiliation:
Oklahoma State University
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Abstract

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.

Keywords

beef cattlecarcass qualitycoefficients of separate determinationincentivesmarket signalsvalue-based marketingQ11Q13
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 38 , Issue 1 , April 2006 , pp. 77 - 90
Copyright
Copyright © Southern Agricultural Economics Association 2006

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