Determinants of Wholesale Beef-Cut Prices

Abstract

Key determinants of monthly wholesale prices for 12 beef cuts include the quantity of the specific cut, stickiness in prices, marketing costs, quantities of pork and chicken, and seasonality. Seasonal patterns across the respective cuts are very different. Relative to the price in December, prices at the wholesale level in other months can be as much as 6 percent lower to as much as 21 percent higher.

Cattle cycles, heterogeneous expectations and the age distribution of capital

“…First, the demand estimates imply price elasticities that are generally inelastic over the sample period for the fed and non-fed retail markets, respectively. 13 Previous studies also tend to ÿnd that the demand for retail beef is inelastic (Capps et al, 1994;Lesser, 1993;Smallwood et al, 1989;Wohlgenant, 1989). Second, the estimates for the markup parameters appear reasonable when compared to the historical retail-farm level price spread (Mathews et al, 1999).…”

Seasonality effects on consumers' preferences over quality attributes of different beef products

“…One context that has been recognized as important by the econometricians is modelling seasonality effects on customer demand for goods and services (Lusk, Marsh, Schroeder, & Fox, 2001;Moskowitz & Beckley, 2009). Studies have looked at the importance of seasonality as a factor in beef purchasing habits, such as the seasonality effect on beef price (Capps, Farris, Byrne, Namken, & Lambert, 1994), quality grade cues (Farris & Holloway, 1990;Hogan Jr & Ward, 2003;Lusk et al, 2001), and hedging wholesale beef cuts (Namken, Farris, & Capps Jr, 1994;Schroeder & Yang, 2001). However, there has been no systematic analysis of the effect seasonality has on purchasing behaviour and preference for different beef cuts.…”

Characteristics and hedonic pricing of differentiated beef demands

“…In most studies addressing beef demand, beef is considered an undifferentiated commodity (Hahn, 1988; Alston and Chalfant, 1993; Brester and Wohlgenant, 1993; Eales and Unnevehr, 1993; Kesavan et al, 1993; Eales, 1994; Eales and Unnevehr, 1994; Hahn, 1994). In addition, a number of studies recognize that, in reality, beef quality varies greatly (Eales and Unnevehr, 1988; Heien and Pompelli, 1988; Brester and Wohlgenant, 1991; Capps et al, 1994; Huang and Hahn, 1995). Among these studies, some divide beef into basically two or more categories, especially hamburger and other cuts of beef (Huang, 1985; Eales and Unnevehr, 1988; Brester and Wohlgenant, 1991; and Huang and Hahn, 1995).…”

“…In addition, at least three studies use micro‐level or scanner data to look at demand for specific cuts of beef: Heien and Pompelli (1988) use survey data and Capps (1989) and Capps et al (1994) use supermarket scanner data to analyze separate cuts and categories of beef. Unfortunately, these studies are concerned exclusively with beef purchased for home consumption, which differs in many respects from hotel, restaurant, and institutional consumption.…”

“…Again, while these studies provide evidence of structural shifts in the demand for meats, they inadequately characterize these shifts because they generally address only single shifts in data series or adopt linear specifications for shifts. Others (Heien and Pompelli, 1988; Capps, 1989; Capps et al, 1994) use data from relatively short time periods, which severely limits their ability to characterize longer‐term shifts in tastes or consumption patterns.…”