Abstract: Source-verified (SV) feeder cattle auctions were held in Bloomfield, Iowa, each October, November, and December from 1997-2000. This study compares price data from these SV auctions to traditional auctions at the same location to determine whether a premium exists for SV feeder cattle. Hedonic pricing models were estimated to evaluate the price effects of lot characteristics, market forces, and type of market (SV versus regular sale). The SV cattle were sorted and pooled into large lots. The larger lot size, consistent with early research, earned large price premiums. After accounting for lot size, the SV premium for lighter cattle (< 650/600-pound steers/heifers) was estimated at $1.30/cwt, and was significant. The SV premium over and above lot size was not significant for heavier feeder cattle.
Key Words: auction, cattle, hedonic pricing model, markets, source-verified auction
Contact Author:
John D. Lawrence
Dept. of Economics
468 Heady Hall
Iowa State University
Ames, IA 50011-1070
Phone: (515) 294-6780
Fax: (515) 294-1700
Abstract: As agricultural commodity industries strategically plan for their future, they need to consider the systemic and synergistic effects of such factors as changing government regulations, demand expansion or contraction, globalized markets, increased competitive pressures, and greater customer quality requirements. This article discusses a framework developed to help industries strategically plan within the context of these dynamic factors. This framework, based upon relevant theory and an accumulation of experiences with this type of strategic planning, provides one possible approach for addressing the strategic needs of an entire industry. In this way, a commodity industry as a whole can identify and address key industrywide strategic issues to maintain and enhance its competitiveness, profitability, or at the very least, its survival in increasingly global markets.
Key Words: framework, industry, strategic planning
Contact Author:
Conrad P. Lyford
Dept. of Ag. & Applied Econ.
Box 42132
Texas Tech University
Lubbock, TX 79409-2132
Phone: (806) 742-2821
Fax: (806) 742-1099
Abstract: In 1998, the Sara Lee Corporation implemented a corporate strategy of deverticalization. Bil Mar Foods, Inc., a subsidiary of Sara Lee responsible for the processing of packaged meat products, followed the strategy by shutting down its turkey slaughter facility in Zeeland, Michigan. As a consequence, turkey growers in Michigan were left with no viable outlet for live bird slaughter and the potential end of live bird production in the region. This study analyzes the economic impact associated with the cessation of live bird slaughter at the Bil Mar Foods plant. The economic consequences may be as high as an $81 million loss in total industry output, a $29 million loss in income, and a total employment loss of nearly 800 jobs. Faced with these economic consequences, turkey growers in the region joined forces to form a valued-added cooperative.
Key Words: impact analysis, plant closure, turkey industry
Contact Author:
Laura M. Cheney
Dept. of Ag. Economics
Agricultural Hall
Michigan State Unversity
East Lansing, MI 48824-1039
Phone: (517) 432-0089
Fax: (517) 432-1800
Abstract: The Hennessy and Wahl model of optimal grain blending and segregation (GBS) is extended to the case where it is not possible to separate components within a load. Analytical solutions are not available when segregation is the optimal strategy, and so solutions are obtained with nonlinear optimization. The model is then used to determine the optimal sorting of hard red winter wheat by protein content. Most of the benefits from sorting can be obtained with only two bins.
Key Words: blending, grain, segregation
Contact Author:
B. Wade Brorsen
Dept. of Ag. Economics
308 Ag Hall
Oklahoma State University
Stillwater, OK 74078-6026
Phone: (405) 744-6157
Fax: (405) 744-8210
Abstract: This study empirically compares the level of importance assigned to the knowledge, skills, and experiences of applicants for entry-level positions by members of the agribusiness community and how these criteria were perceived by chairpersons of departments of agricultural economics. Chairpersons had a good understanding of criteria important to employers in evaluating applicants and how they prioritize these criteria. Communication and interpersonal skills were ranked as the most important criteria by both groups. Industry members assigned lower levels of importance for formal international training, an attribution largely shared by academic counterparts.
Key Words: agribusiness, agricultural economics, curriculum, international education, international exchanges
Contact Author:
Cheryl J. Wachenheim
Dept. of Ag. & Applied Economics
P.O. Box 5636
North Dakota State University
Fargo, ND 58105-5636
Phone: (701) 231-7441
Fax: (701) 231-7400
Abstract: This paper presents a case study of an organic vegetable farm, designed for a senior undergraduate farm business management or agribusiness course, and is accompanied by a teaching note which includes suggested analysis. Phil Foster is the owner and manager of Phil Foster Ranches, a 252-acre organic vegetable, fruit, and nut farm in the Central Coast Valley of California. Until the last few years, most of the sales were to a number of produce brokers who sold the produce for Phil in the wholesale market on a commission basis. Believing he could get better prices by selling direct to retailers, two years ago Phil started a local delivery route to small grocery stores wishing to sell organic produce. The delivery route has enjoyed success, but now requires significant additional investment of both time and money if it is to be maintained and expanded. Phil Foster must now decide if expanding the local delivery route will be worth the investment cost and effort. Through situation analysis, this case study examines Phil's decision-making options.
Key Words: case study, farm financial management, marketing, organic
Contact Author:
William J. Brown
Dept. of Ag. Economics
51 Campus Drive
University of Saskatchewan
Saskatoon, SK S7N 5A8
Phone: (306) 966-4008
Fax: (306) 966-8413
