Theses and Dissertations at Montana State University (MSU)
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Item A dynamic price and supply model of the U.S. beef industry : an interfacing of the market levels(Montana State University - Bozeman, College of Agriculture, 1982) Brester, Gary WayneItem A dynamic model of prices, supplies, and revenue adjustments in the U.S. beef market : emphasis on changing feed costs(Montana State University - Bozeman, College of Agriculture, 1989) Phillips, Stanley Storey; Chairperson, Graduate Committee: John M. Marsh.Results of past beef research lack concurrence with respect to the effects of federal grain programs and grain market prices on the beef cattle market. This study examines the impact that changes in exogenous factors, particularly feed prices, have on cattle prices and supplies over time. A dynamic econometric model of the.U.S. fed and nonfed beef cattle market is formulated using quarterly data from 1973 to 1987. Price and supply equations were estimated for fed cattle, cull cows, nonfed steers and heifers, and feeder cattle placements. The equations were estimated within a rational distributed lag framework characterized by nonstochastic difference equations and autoregressive-moving average error terms. Solved reduced form coefficients were used to calculate short run and long run percentage price and supply responses. In addition, percentage responses were used to simulate revenue adjustments in the beef industry resulting from changes in corn price and the corn loan rate. The largest short run percentage price and supply responses were associated with by-product value except in the case of cull cow supply where corn price dominated. By-product value generated the largest long run percentage responses in all but the feeder sector and the total nonfed cattle supply sector where corn price demonstrated the larger effects. Interest rate was associated with the smallest short run percentage responses in all cases and the smallest long run responses in all but total nonfed cattle supply. All prices responded inversely to changes in corn price as did fed cattle supply and feeder cattle placements. Cull cow supply, nonfed steer and heifer supply, and total nonfed cattle supply responded positively to changes in corn price. Fed cattle and feeder cattle sector gross revenues were inversely related to changes in corn price and the corn loan rate, while gross revenues in the nonfed steer and heifer sector and cull cow sector were positively related. The results emphasize the importance of resource trade-offs between cattle finishing and nonfed cattle production; however, they must be interpreted carefully in light of recent structural changes in meat packing.Item The effects of domestic and trade policy variables on the U.S. beef wholesale and slaughter markets(Montana State University - Bozeman, College of Agriculture, 1990) Jeong, Kyeong-Soo; Chairperson, Graduate Committee: John M. Marsh.Trading in beef products has been increasing during the 1980's and its impact on the U.S. beef industry has become an important issue for various interest groups. Particularly, U.S. by-product exports have become a large value item in U.S. beef product exports and contribute greatly to meat packer returns and Japanese beef import quotas have become less stringent. The main objective of this study is to develop a dynamic structural model of the U.S. wholesale carcass and slaughter cattle industry. The model incorporated pertinent domestic variables and foreign trade variables such as imports and exports of beef and veal, live cattle imports, and by-product exports. The econometric model explicitly includes U.S. carcass demand and supply, U.S. slaughter demand and supply, beef and veal import demand and supply, beef and veal export demand and supply, live cattle import demand and supply, and foreign trade in farm level by-products. The empirical model was estimated within a rational distributed lag framework, using instrumental variables with either the maximum likelihood or ordinary least squares procedure depending upon the nature of the stochastic error terms. The short-run and long-run impacts of the exogenous variables on the dependent variables are calculated using sequential partial derivatives involving the difference equation coefficients and slope parameters. The distributed lag impacts of trade shocks on the U.S. beef prices are calculated using reduced form coefficients specific to selected exogenous and predetermined variables combined with price transmission effects between market levels. The empirical results show that most of the foreign trade variables were statistically significant and demonstrated theoretically correct signs. The long-run impacts of foreign trade in beef products were generally small but were large enough to suggest that incorporating foreign market arguments in the framework of dynamic analysis is important in a U.S. beef market analysis. However, the use of monthly or quarterly data and disaggregate price and quantity data for the trade variables would be more desirable in order to reduce aggregation bias.Item The causes of protection in the Japanese beef industry(Montana State University - Bozeman, College of Agriculture, 1986) Lloyd, Roger Edwin; Chairperson, Graduate Committee: Michael D. Frank; Merle Faminow (co-chair)Recently, Japan's markets have received considerable attention in the United States concerning their degree of protection. This study analyzes the degree and underlying causes of protection in the Japanese beef industry from 1963-1983. The Japanese beef industry was chosen due to its high trade barrier visibility and its importance in United States-Japan trade negotiations. Effective protection rates are applied as a measure of protection. Five economic regulation models are developed as possible explanations for the level of protection. An empirical analysis is conducted to determined which model best explains actual levels of protection. Protection in the Japanese beef industry appears to be directly related to the share of farm population and inversely related to farm income levels. This result implies that current levels of protection are likely to decrease if certain demographic trends in Japan, e.g., declining farm population and declining farm income, continue.Item Health (cholesterol) information and economic effects on the U.S. beef industry(Montana State University - Bozeman, College of Agriculture, 2005) Holzer, Brett Matthew; Chairperson, Graduate Committee: John M. Marsh.The objectives of this thesis were to econometrically estimate and test the impacts of health (cholesterol) information as an exogenous shifter of retail beef demand, and to translate these shifts to structural inverse demands and supplies of the boxed beef, slaughter cattle, and feeder cattle sectors. Given the theoretical model, the empirical work consisted of three stages. First, shifts in retail beef demand were estimated through a retail beef demand index equation by OLS. Second, the system of inverse demand and supply equations for all beef industry sectors was estimated using a full information systems estimator (3SLS) to identify relationships, which were used to calculate reduced form, equilibrium multipliers. The last stage was to calculate long term impacts of health information on the beef industry sectors via a combination of beef demand index elasticities and system equilibrium multipliers. The majority of the model estimates were statistically significant. The health (cholesterol) information elasticity of the retail beef demand index was estimated to be -0.322. Based on equilibrium multipliers, the 1970-2000 trend in the retail demand index decreased revenues in the boxed beef, fed slaughter cattle, non-fed slaughter cattle, and feeder cattle sectors by 2.6%, 1.1%, 1.3%, and 1.7% annually (as a percent of the sample mean). Cholesterol information, as a driver of the retail demand index, was responsible for 1.6%, 0.7%, 0.8%, and 1.1% decreases in total revenues of the boxed beef, fed slaughter cattle, non-fed slaughter cattle, and feeder cattle sectors annually. Combined, the beef industry sectors experienced a real total revenue reduction of $727 million annually due to the negative long run effects of cholesterol information. Impacts of shifts in retail demand are distributed across all sectors of the beef industry, albeit somewhat unevenly. Implications are that beef industry revenues can be increased by positive information concerning health effects of beef consumption.