An Economic Evaluation of Yield Grade Standards for Canadian Carcass Beef [microform] PDF Download

Author: Dawson, Oliver Glenn
Publisher: Ann Arbor, Mich. : University Microfilms International
ISBN:
Category : Beef cattle
Languages : en
Pages : 286

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Book Description
The basic objective of this thesis was to estimate the economic effects of yield grade standards for carcass beef on the various market sectors of the Canadian beef industry. The adoption of the standards was expected to enhance consumer demand, improve efficiency within the processing and marketing services sectors, and improve resource allocation and revenues of livestock producers. A conceptual model showing the interrelationships among market sectors was developed and formulated into a system of equations for econometric estimation. The model contained variables relating to the supply and demand of market participants affected by the change in grading standards. Measurement of these variables was based on published quarterly data, including four years of yield grading, over the 1961-76 period. The statistical results showed a significant economic variables relating to the supply and demand of market participants affected by the change in grading standards. Measurement of these variables was based on published quarterly data, including four years of yield grading, over the 1961-76 period. Binary variables were incorporated in the model to identify any structural change in the relationships coincident with the grade change. Problems in estimation arose due to the simultaneous nature of the model, and intercorrelation problems involving predicted prices for adjacent market levels in certain structural equations. Two alternative specifications of the processing and marketing services relationships were formulated to address this problem. First, variables relating to demand at the adjacent market level were substituted for the corresponding price. The second method involved the ratio of adjacent market level prices. Both specifications resolved the problem, but in the substitution case intercorrelation was transferred to other variables. Estimates of the parameters of the various equations were obtained by using the two stage least squares regression procedure. The statistical results showed a significant economic impact of yield grades, as measured by the slope and intercept binary variables, in the estimated retailer demand and producer supply equations. But, these results cannot be considered conclusive. A lack of information concerning impact of yield grades, as measured by slope and intercept binary variables, in the estimated retailer demand and producer supply equations. But, these results cannot be considered conclusive. A lack of information concerning historical costs in the processing and marketing sectors necessitated the use of proxy variables which may not have accurately captured the full impact of the grade change. A further problem was that potential yield grade adjustments in carcass weights were dominated by the effects of rapidly rising feed grain prices throughout the grade change period.