Some specific agricultural products markets
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SOME SPECIFIC AGRICULTURAL PRODUCTS MARKETS. Beef and dairy Poultry and eggs Tobacco. Livestock. BREEDING. SLAUGHTER. MEAT PACKAGING. RAISING. MANUFAC- TURING. WHOLESALING. FATTENING. FARM Breeding Raising Fattening. RETAIL. RESTAURANTS AND INSTITUTIONS.

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SOME SPECIFIC AGRICULTURAL PRODUCTS MARKETS

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Some specific agricultural products markets

SOME SPECIFIC AGRICULTURAL PRODUCTS MARKETS

  • Beef and dairy

  • Poultry and eggs

  • Tobacco


Livestock

Livestock

BREEDING

SLAUGHTER

MEAT

PACKAGING

RAISING

MANUFAC-

TURING

WHOLESALING

FATTENING

FARM

Breeding

Raising

Fattening

RETAIL

RESTAURANTS

AND

INSTITUTIONS


Livestock marketing issues

Livestock Marketing Issues

  • Channels are often shorter to preserve freshness  higher cost of distribution

  • Relatively high value-bulk ratio

  • Production concentration in some areas

  • Significant price cycles

    • Stock must actually be held back to increase future production!

  • Growth of feedlots

    • Economies of scale


Meat production

Meat Production

60%

HIGHER VALUE

CUTS

1,000 POUND

STEER

620

POUND

CARCASS

540 LBS.

RETAIL MEAT

40%

HAMBURGER


Price cycles review

Price Cycles (Review)

LAG TIME

HIGHER

PRICES

INVESTMENT

(CAPACITY

ADDED)

LAG TIME

LAG TIME

GREATER

OUTPUT

LOWER PRICES

LAG TIME

DISINVESTMENT

(CAPACITY

LOWERED)

LAG TIME


Consumption over time

Consumption Over Time


Livestock assembly

Livestock Assembly

  • Options

    • Local cooperative associations

    • Country dealers

    • Concentration yards

    • Terminal public markets

  • Move toward decentralized dealings


Meat packaging

Meat Packaging

  • Heavily concentrated industry

  • Vertical integration into processing but not retailing

  • Low traditional margins, due in part to over-capacity


Milk and dairy

Milk and Dairy

  • About 10% of farm sales

  • Products

    • Milk

      • Whole

      • Low-fat

      • Non-fat

      • Cream

    • Yogurt

    • Ice cream

    • Butter

    • Cheese


Poultry

Poultry

  • Large increase in turkey consumption

  • Increased efficiency in chicken production

  • Increase in post-farmer value (e.g., fast food)

  • Processing is very labor intensive  shift of production to low wage areas


Poultry prices

Poultry Prices

Prices adjusted for inflation in 1993 dollars


Chicken as healthy food

Chicken as Healthy Food

  • Kentucky Fried Chicken is now known as KFC

  • Chicken first entered fast food menus mostly as

    • Fried chicken

    • Fried chicken sandwiches

    • Nuggets

  • Broiled chicken sandwiches are increasingly available

    • More delicate and more perishable

    • Less convenient to eat

    • Less of a fried taste


Chicken exports

Chicken Exports

  • Increasing demand for meat in expanding economies

  • WTO calls for opening of agricultural markets

  • Exports of lower value dark meat from U.S. markets

  • History of heavy export subsidies


Tobacco

Tobacco

  • High value crop but decreasing proportion of farm cash receipts

  • Large economies of scale in cigarette manufacturing and strong brand differentiation

  • Supply control program (since 1933) with allocation to eligible farmers


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