Essays on Economics of Cattle and Beef Traceability PDF Download
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Languages : pt-BR
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The first essay inquires into the economic: value and the optimal expected traceback rate of success for a trace-ability system from the cattle slaughter room through the fabrication floor with a case study of injection-site lesions in fed cattle in the US. The method developed by Grossman and Hart (1983) is adapted to model and solve a Principal-Agent model with beef traceability. By maintaining the identity of the fed cattle suppliers (Agents) and animal ID attached to retail beef cuts with certain probability, a traceability system makes incentive mechanisms feasible. First-best action may be induced by meat packers (Principal) with incentive mechanisms created with a traceability system with a low expected traceback rate of success. This result was not sensitive to changes in the way traceability systems' costs were; estimated. Further, a traceability system may have no value when risk averse feedlot owners can do little to affect the frequency of injection-site lesions in fed cattle. Finally, the Principal-Agent model developed in the present study presents potential to be employed in studying other problems in which identity preservation is a concern. The second essay investigates the economic value of the National Animal Identification System (NAIS) in the US. It is assumed that benefits may come from how the NAIS will affect the final consumer's food safety concerns about eating meat. Generalized almost ideal and quadratic almost ideal demand systems are estimated incorporating food safety indices for beef, pork and poultry. It is found that food safety impacts upon the final demand for meat are small and do not present lagged effects. Three scenarios are constructed on the basis of hypothesized impacts of the NAIS on consumers' food safety concerns about meat. Differences in predicted total revenue for beef, pork and poultry between scenarios are used as gross measures of the benefits of the NAIS. If most benefits with the NAIS are expected to come from demand shifts up, the US government will need to subsidize its implementation and maintenance to make the NAIS economically feasible.
Author: Moisés de Andrade Resende Filho
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Languages : en
Pages : 286
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Author:
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ISBN:
Category :
Languages : pt-BR
Pages :
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Book Description
The first essay inquires into the economic: value and the optimal expected traceback rate of success for a trace-ability system from the cattle slaughter room through the fabrication floor with a case study of injection-site lesions in fed cattle in the US. The method developed by Grossman and Hart (1983) is adapted to model and solve a Principal-Agent model with beef traceability. By maintaining the identity of the fed cattle suppliers (Agents) and animal ID attached to retail beef cuts with certain probability, a traceability system makes incentive mechanisms feasible. First-best action may be induced by meat packers (Principal) with incentive mechanisms created with a traceability system with a low expected traceback rate of success. This result was not sensitive to changes in the way traceability systems' costs were; estimated. Further, a traceability system may have no value when risk averse feedlot owners can do little to affect the frequency of injection-site lesions in fed cattle. Finally, the Principal-Agent model developed in the present study presents potential to be employed in studying other problems in which identity preservation is a concern. The second essay investigates the economic value of the National Animal Identification System (NAIS) in the US. It is assumed that benefits may come from how the NAIS will affect the final consumer's food safety concerns about eating meat. Generalized almost ideal and quadratic almost ideal demand systems are estimated incorporating food safety indices for beef, pork and poultry. It is found that food safety impacts upon the final demand for meat are small and do not present lagged effects. Three scenarios are constructed on the basis of hypothesized impacts of the NAIS on consumers' food safety concerns about meat. Differences in predicted total revenue for beef, pork and poultry between scenarios are used as gross measures of the benefits of the NAIS. If most benefits with the NAIS are expected to come from demand shifts up, the US government will need to subsidize its implementation and maintenance to make the NAIS economically feasible.
Author: Melissa Gale Short McKendree
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Languages : en
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The U.S. beef industry is comprised of multiple, vertically connected segments. Beginning at the cow-calf level, cattle move through the industry to backgrounding/stocker operations, feedlots, and then to beef packers. The beef produced then continues to move through the marketing channel from beef packers to wholesalers and on to multiple final consumer outlets. Each level of the beef industry has both distinct and related economic issues. This dissertation contains three essays on beef cattle economics. Essay 1 focuses on price and animal health risk management at the feedlot level. Essays 2 and 3 explore how upstream demand changes impact primary beef suppliers. The objective of Essay 1 is to determine if feedlot operators manage price risk and animal health risk as two separate and independent risks or if they manage them jointly. The animal health attribute of interest is purchasing feeder steers from a single known source versus an auction with unknown background. The output price risk mitigation tools are futures contracts, forward contracts, other, and accept cash price at time of sale. Primary data is collected using an online survey administered to feedlot operators. Participants are placed in forward looking, decision making scenarios utilizing a split-sample block design. Evidence of a relationship between animal health risk and output price risk management is mixed. Ricardian rent theory (RRT) is tested in Essay 2 to determine if complete pass-through occurs from fed cattle and corn prices to feeder cattle prices. Monthly price data from December 1995 to December 2016 is used. Based on RRT, surplus rents should pass through the market to the holder of the scarcest resource. In cattle markets, feeder calves are the scarcest, widely traded resource and thus gains and losses at the feedlot theoretically pass-through to feeder cattle prices. The hypothesized pass-through rates suggested by RRT is calculated using monthly production data from the Focus on Feedlots data series. The regression pass-through estimates are tested against the hypothesized RRT pass-through. In many models, the estimated pass-through rate is statistically greater than the RRT hypothesized pass-through rate. Thus, when fed cattle or corn prices change, these changes are more than fully passed to cow-calf producers through the feeder cattle price. Evidence is found of asymmetric pass-through during times of herd expansion versus contraction. Essay 3 provides a quantification of how changes in retail and export beef demand are transmitted to different members of the beef industry. Understanding how information is transmitted from primary consumer demand through the supply chain is key for long-term prosperity of the U.S. cattle industry. However, empirical applications quantifying how demand signals are transmitted through vertically connected industries are limited. Using both naïve and forward looking price expectations, a four equation system of inverse demand and supply equations for live and feeder cattle is estimated. Using retail and export beef demand indices, the impacts of 1% change in retail or export demand on live cattle and feeder cattle prices are quantified.
Author: Amber Kate Oerly
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Category :
Languages : en
Pages : 0
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The beef supply chain in the United States consists of many actors from the farm to retail level; with approximately 730,000 beef farms moving cattle to feedlots to slaughter plants and finally to various wholesale, retail, and export channels (USDA NASS, 2017). Thus, the U.S. beef industry is known to be one of the most complex segments of the agricultural sector. Periods of increased volatility and uncertainty related to economic, environmental, and social factors have further highlighted the dynamic nature of the U.S. beef industry and supply chain. This thesis contains two articles. The first article analyzes cowherd supply response in the United States and 14 major cow-calf states in the country. The second article estimates wholesale beef demand parameters. In Article 1, partial-adjustment supply models are estimated to quantify how changes in feeder cattle prices impact beef cow inventories at state and national levels. In Article 2, seeming unrelated regression (SUR) models are estimated to obtain updated wholesale beef demand elasticities. Both Articles 1 and 2 provide updated research related to two current knowledge gaps in the U.S. beef industry. Findings in both articles support the notion that price sensitivity may be decreasing in the U.S. beef-cattle industry.
Author: Chia-Hsing Wang
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Category : Brand name products
Languages : en
Pages :
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Abstract: I simulate growth and quality changes for pens of cattle and derive the value of pre-harvest sorting and genetic selection under grid pricing in a deterministic setting featuring animals with heterogeneous growth and quality maturation paths. The key findings are: 1) both pre-harvest sorting and increased genetic uniformity could substantially affect an individual cattle feeder's net revenues; 2) one could expect higher marginal revenue gains from the genetic uniformity than from pre-market sorting; 3) both methods exhibit diminishing marginal returns and 4) aggregate beef supply may increase as improving uniformity typically leads to later optimal marketing dates and, hence, heavier animals at slaughter. Post-slaughter quality-based pricing of cattle is increasingly common. This quality, however, is dependent upon unobservable quality characteristics of the feeder cattle used as inputs and unverifiable effort exerted by feedlot managers. Through stochastic simulation I construct incentive compatible quality risk-sharing contracts based upon final grid-quality schedules in feeder cattle markets. Darby and Karni suggest branding as means of solving the potential fraudulence problems in the credence good market. Umbrella branding is a common marketing practice to promote new product and bond the product quality to the brand reputation. However, while umbrella branding works well in the experience good market, no evidence shows it would work in the credence good markets. I set up a framework for discussing the effect of umbrella branding on the quality provision of credence good. The results show that brand reputation, product similarity, probability of detection, punishment severity, and exogenous quality noise all play important roles in determining a firm's decision on umbrella branding and fraud.
Author: Lee L. Schulz
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Category : Beef industry
Languages : en
Pages : 448
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"Substantial losses can occur if animal identification systems cannot quickly and adequately identify individual animals, the premises where they were located, and their movements throughout production and processing. This creates a need met by this study in determining how traceability systems should be designed and promoted in order to improve voluntary participation rate. This research utilized a survey of U.S. cow-calf producers to identify cow-calf producer preferences and perceptions regarding voluntary traceability systems and system attributes and in turn determined what type of voluntary traceability systems would receive the greatest support. Meeting this core objective allowed for better identification of the potential success of alternative voluntary traceability systems that could exist in the beef industry. A second tier of research questions included examinations of mandatory vs. voluntary NAIS [National Animal Identification System] preferences, self-revelation of current NAIS participation, and the most current concerns and important issues to cow-calf producers regarding traceability. Results have policy implications as the optimal voluntary traceability system hinges critically upon cow-calf producer perceptions of traceability systems and system attributes. Results indicate the importance of considering producers' perceptions and preferences regarding traceability when designing traceability systems"--Abstract.
Author:
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Category : Economics
Languages : en
Pages : 388
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Author: Lin Yang
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Languages : en
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A mandatory livestock traceability system with three proposed animal movement reporting options is under discussion by the Canadian federal, provincial and territorial governments. This thesis contributes to a better understanding of potential benefits of the enhanced traceability system in case of a foot-and-mouth disease outbreak. For each proposed option, an epidemiological stochastic disease model that simulates a FMD outbreak in Alberta is paired with a partial equilibrium model developed for the Ontario cattle and beef industry to estimate the reduction in trade embargo losses resulting from the disease outbreak compared to the current level of traceability capacity. Results indicate that the potential trade-embargo related benefits of the three proposed options range from $7 million to $15 million on average. However, depending on different disease outbreak scenarios, the benefits can range from $2 million to $51 million.
Author: James L. Mitchell
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Languages : en
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Chapter 1: The Effects of Production Contracts on Biosecurity Adoption by United States Hog Producers. Production contracts play an important role in U.S. livestock production. As their use has grown, so has the need to understand their influence on production practices. Understanding the link between production contracts and health management practices, for example, is crucial to policies and analysis of the preparation for, and potential consequences of larger scale animal disease outbreaks in the United States. The benefits and costs, as well as tolerance for disease risks, are likely different among independent producers and operations utilizing some form of production contracts. Using results from a 2017 survey of U.S. hog producers, we estimate the effects of production contract use on adoption of enhanced biosecurity practices. The main result of this chapter is that contracting producers are more likely to adopt biosecurity. We find evidence that the effect of production contracts is heterogeneous across enterprise types. Chapter 2: The Market for Traceability with Applications to U.S. Feeder Cattle. For voluntary traceability programs, a key interest for program designers and policymakers is how to encourage participation. We contend that participating in voluntary traceability can be viewed as a product characteristic, and thus serves as a source of product differentiation. We study the implicit market for traceability systems for the first known time. In our empirical example, we use stated choice experiments to link feeder cattle sellers and buyers through premiums and discounts for cattle traceability systems. Using results from discrete choice models, we simulate changes in traceability supply and demand in response to prices and policies. We find that cost-share policies might be an effective way of encouraging participation for feeder cattle sellers and could serve as an alternative to mandating traceability. Chapter 3: Cow-Calf Producer Willingness to Report Disease: A Test of Adverse Selection. Animal health agencies' efforts to prevent and control foreign animal disease outbreaks depend on, among other factors, timely livestock producer self-reporting of disease suspicions. Adverse selection applies to disease reporting because livestock producers have private information about their disease status. Policymakers want to know how to set policy variables such that producers reveal private information about disease status, early, before the disease spreads. In this chapter, we study the effects of disease prevalence and indemnity payments on cow-calf producer willingness to report foot-and-mouth disease (FMD) suspicions. A novel test of adverse selection arises because we can determine how the rate of disease reporting adjusts to policy variables evaluated at different disease prevalence rates. Producers that report FMD suspicions do so early such that the effects of policy variables diminish at high prevalence rates.
Author: Diogo Monjardino de Souza Monteiro
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Languages : en
Pages : 0
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Countries have implemented traceability systems, especially after discovery of BSE in cattle, in order to quickly identify hazard sources. We compare the economic impacts of mandatory and voluntary systems in the EU, Japan, Australia, Brazil, Argentina, Canada, and the United States in terms of the systems' breadth, depth, and precision.
