Concerns over the total costs assessed to the beef industry from the
implementation of mandatory country-of-origin labeling (COOL) regulations warranted
an investigation into the estimation and distribution of marketing and marginal costs of
production for retail chain stores and distributors, meat packers and processors, cattle
feedlots, cattle backgrounding yards and cow-calf producers. Furthermore, it is thought
the implementation of COOL will impose severe market and social welfare effects on
the participants in the beef industry.
This research focused on two main objectives. The first objective is to provide a
full beef industry cost assessment for implementing COOL regulations based on the
preliminary guidelines for COOL as published by the United States Department of
Agriculture in the proposed rule in October of 2003. Financial and production data was
collected and used from U.S. retail chain stores and distributors, meat packers and
processors, cattle feedlots, and cattle backgrounding yards and stockers. The second
objective was to use the weighted average cost estimates calculated from the data to
determine the magnitude of increases in the demand for retail beef, wholesale beef, fed
cattle, and feeder cattle needed to negate the increase in costs of implementing
mandatory COOL regulations.
An equilibrium displacement model was used to demonstrate the supply and
demand functions and relationships for retail beef, wholesale beef, fed cattle, and feeder
cattle. Estimated elasticities for retail beef, wholesale beef, fed cattle and feeder cattle
were used to calculate the relative changes in price and quantity in response to the
COOL-induced supply and demand shifts. The quantity intercepts from the estimation
of the linear parameters can be used to calculate the increases in consumer demand
needed to negate the increases in costs estimated from the survey results for the retail,
wholesale, fed cattle, and feeder cattle sectors of the beef industry.
A significant cost burden to the beef industry was shown by the weighted
average estimates calculated from the research. Retail chain stores and distributors,
meat packers and processors, cattle feedlots and cattle stockers are expected to see an
increase in marketing and marginal costs of production as a result of implementing
COOL.
| Identifer | oai:union.ndltd.org:tamu.edu/oai:repository.tamu.edu:1969.1/3242 |
| Date | 12 April 2006 |
| Creators | Hanselka, Daniel David |
| Contributors | Davis, Ernest E. |
| Publisher | Texas A&M University |
| Source Sets | Texas A and M University |
| Language | en_US |
| Detected Language | English |
| Type | Book, Thesis, Electronic Thesis, text |
| Format | 687354 bytes, electronic, application/pdf, born digital |
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