Doctoral Dissertations

Date of Award

12-1971

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Agricultural Economics

Major Professor

Irving Dubov

Committee Members

James Snell, Luther Keller, Hans Jensen

Abstract

The objectives of this study were: (1) to estimate the cutout characteristics of U.S.D.A. Grades 1, 2, and 3 hogs at different weight intervals; (2) to determine the gross margin differentials^ among these animals and to identify variables affecting this margin; (3) to use cutout characteristics established in Objective I to calculate GMD's for a different sample of animals, taking into account differences that may be attributable to both season and procurement method; and (4) to determine relationships that may exist between physical characteristics and wholesale values per hundredweight of hot carcasses under different situations of wholesale cut prices. The facilities and records of a large, federally inspected meat packing company were made available to this researcher and provided the primary data source. Cutout data were gathered on 180 animals. Sixty of these animals were from U.S.D.A. Grade 1, while U.S.D.A. Grades 2 and 3 provided 70 and 50 animals, respectively. They fell into 18 categories of 10 animals each, based on liveweight and grade. Cutout data from these 180 animals were used to attain Objective I. Linear multiple regression equations were used to test relationships among variables included in the last three objectives. Analysis for Objective II revealed that increases in hot carcass weights and increases in liveweight prices were associated with lower GMD's. Lower GMD's were also associated with Grade 3 animals. However, as weights increased within this grade, GMD's increased. Results of the analysis for Objective III also showed negative relationships between GMD's and increases in hot carcass weights, and increases in liveweight prices. Animals procured through order buyers, and animals purchased on a carcass basis had significantly lower GMD's than animals purchased on a direct liveweight basis. The GMD's for the second, third, and fourth quarter of the year were significantly higher than those for the first quarter. Results revealed also that GMD's for Grades 2 and 3 were significantly higher than those for Grade 1. Analysis for Objective IV revealed that the degree of association between physical characteristics and wholesale values varied, depending on the wholesale cut prices used to estimate carcass values. The magnitude of the b coefficient varied widely for the variable hot carcass weight. Results indicated that there would be no advantage to using more than one backfat measure in carcass buying models. Assuming that the proper muscling score or grade would be given, results of the equations in each of the pricing situations for wholesale cuts indicate that carcass buying programs including grade or muscling as variables along with hot carcass weights would be as accurate as those using backfat measurements. Several sources of potential inaccuracies in the buying practices of the firm were revealed in this study. One source may be a failure to discount properly for the heavier weights of some animals. Another may stem from a failure of the liveweight pricing system to reflect value differences between grades. The GMD's received by a packer could be affected by the methods of procurement used (this may be only for the short run). Many carcass buying models are based on systems of premiums and discounts based on the associations present between physical characteristics and wholesale values. Results would lead one to conclude that there are factors other than physical characteristics which are associated with change in wholesale values of animals. An example would be inconsistencies from one season to another in differences between prices of light and heavy hams or other wholesale cuts.

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