Search results

As US beef and pork prices approached record high levels in 2014, industry analysts expressed surprised at consumer response. Because the relative price swings have occurred only recently, traditional approaches to demand analysis that rely on historical data series may be less useful than is typically the case. Employing one of the largest and longest‐running choice experiments, we analyze data on 110,295 choices made by 12,255 consumers observed over a year‐long time period coinciding with historically high meat prices. Our findings reveal nonlinear demands for meat products, with demand being more inelastic at higher prices. Ground beef, steak, and pork chop demands are more sensitive to changes in chicken breast price than the reverse. Moreover, cross‐price elasticities between disaggregate meat products shrink as prices rise. Consumers' incomes significantly affect demand inter‐relationships. Higher income consumers are more likely to choose steak and chicken breasts and are less likely to choose ground beef, chicken wings, and deli ham than are lower income consumers. High‐income consumers tend to be less responsive to own‐price changes and more responsive to cross‐price changes than lower income consumers. This analysis provides estimates of structural demand parameters that help explain current meat expenditure patterns, and the results have implications for the assumption of linearity often invoked in policy analyses.

Abstract
Ethanol is increasingly being used as a gasoline oxygenate and a volume extender in the refinery and blender industry in the U.S. This paper estimates refinery and blender factor demand and evaluates price responsiveness of inputs. The study also tests hypotheses regarding existence of structural change in the industry's demand for inputs. It determines the common shift point and adjustment rate characterizing the transition path of structural change for the set of inputs using gradual switching multivariate regression techniques and maximum likelihood methods. Results suggest structural change in factor demand for inputs in the refinery and blender industry has been initiated in January 2001 at slow adjustment rates. Results also suggest that with the exception of labor and capital, demand responsiveness for inputs to own price changes has decreased over time. The Hicks-Allen cross price elasticity estimates also suggests role-reversal for usage of ethanol in the refinery industry across regimes, with the latter being increasingly used as a substitute than as a complement with time.

AbstractLivestock Mandatory Price reporting, enacted to increase market transparency, has been in place for more than 20 years. However, immense structural change in cattle and beef markets has challenged market information over that time. Large variation present in cattle transaction prices, especially those in the Formula purchases category, on any given day has made traditionally United States Department of Agriculture (USDA)‐reported weighted‐average prices less meaningful. Using nearly 6 years of The Livestock Mandatory Reporting Act of 1999 transactions data from USDA Agricultural Marketing Service (USDA AMS), we demonstrate use of hedonic modeling to facilitate price reporting. While the models show promise to provide useful information, they reveal substantial weaknesses associated with current transaction information collected by USDA from packers. We offer suggestions for improved data collection which would make hedonic modeling of transactions prices a more valuable tool to increase usefulness of reported market prices.

AbstractThis article reports results from four studies determining the US market potential for plant‐based meat alternatives in different contexts and settings. The first study shows that a pair‐wise choice between beef and a plant‐based alternative was not significantly affected by the presence of nutrition facts panels or ingredient lists. A second study, framed as a food service meal choice, reveals that the introduction of a plant‐based burger has roughly the same effect on beef sales as does the presence of a chicken wrap. The final two studies estimate own‐ and cross‐price elasticities of retail demand. We find small cross‐price elasticities between plant‐based patties and ground beef. Each of the aforementioned results varies for regular meat consumers as compared to consumers who self‐identify with an alternative diet such as flexitarian, vegetarian, or vegan. Combined, this study increases understanding of the impact presented by plant‐based offerings in the US protein market.

AbstractCOVID‐19‐related disruptions led to a historic rise in the spread between livestock and wholesale meat prices. Concerns about concentration and allegations of anticompetitive behavior have led to several inquiries and civil suits by the U.S. Department of Agriculture and the U.S. Department of Justice, with increases in price differentials serving as a focal point. This article notes the difference between price spreads and marketing margins, outlines corresponding economic theory, and describes the empirical evidence on wholesale meat and livestock price dynamics in the wake of COVID‐19 disruptions. At one point during the pandemic, beef and pork packers were both operating at about 60% of the previous year's processing volume. We explore how such a massive supply shock would be expected to affect marketing margins even in the absence of anticompetitive behavior. Moreover, we document how margin measurements are critically sensitive to the selection of data and information utilized. Finally, we conclude with some discussion around policy proposals that would pit industry concentration against industry coordination and economies of scale.

AbstractThis article uses two complementary analyses to document consumption of beef and plant‐based proteins along with perceptions held by US consumers. Beef is chosen three times more often than plant‐based proteins and consumers hold a positive image of beef overall. Key differences are outlined between regular meat consumers and those declaring alternative diets. Combined these findings extend understanding in the dynamic situation presented by plant‐based proteins in the US market.

Abstract
Beef food safety events have contributed to considerable market volatility, produced varied consumer reactions, created policy debates, sparked heated trade disputes, and generally contributed to beef industry frustrations. Utilizing data from a total of 4,005 consumers in the United States, Canada, Mexico and Japan in a Double-Hurdle modeling framework, we examine whether consumers altered their beef consumption behavior because of their risk aversion and risk perceptions stemming from information about beef food safety in recent years. Results reveal stark differences in risk perceptions and risk aversion regarding beef food safety across consumers in the four countries and that these differences are revealed through different beef consumption behavior. An improved understanding of food safety perceptions and attitudes will enable policy makers and agricultural industries to better anticipate consumers changing consumption behavior, if a food safety event occurs. Food safety management strategies vary across countries because of identified differences in food safety risk attitudes and risk perceptions.

AbstractA perk of academic employment is the ability to earn additional income from non‐university entities by consulting. Despite the availability of such work, the potential synergies with research, teaching, and extension, and the controversy sometimes surrounding it, there is surprisingly little research on the prevalence of outside consulting, the determinants of consulting, or the response of faculty to specific university consulting policies. To address these issues, this paper utilizes data from a nationwide survey of academic agricultural economists. We find that about 43% of the sample reported consulting activities in the year prior to the survey. Of those who consulted, 12% (or about $34,000) of their total household income on average comes from outside consulting activities. Income from consulting is positively correlated with having a research appointment, income earned from the university, and number of career published papers. We also document extensive heterogeneity across university consulting policies and perceptions of these policies.

AbstractThe 2014 Farm Bill continued the trend towards more risk management‐based support for U.S. farmers. However, it also represents a major departure from previous legislation by introducing multiple program options among which producers had the ability to choose. While allowing producers to have choices creates flexibility, the design of the program required producers to consider potential outcomes for crop prices and production levels in future periods when making their decisions. Experience over the first two years of program implementation suggests that while programs are working as designed, not all producers are fully satisfied with their enrollment decisions. This will lead to proposals for further modification to programs, and to questions about whether program choice should be a component of the next Farm Bill.