Masters Theses

Date of Award

8-1993

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural Economics

Major Professor

Dan L. McLemore

Committee Members

Emmit Rawls, Greg Pompelli

Abstract

Cattle are Tennessee's number one agricultural enterprise in terms of production, accounting for approximately 25 percent of the cash receipts from marketing. The methods available for marketing of feeder cattle have undergone numerous changes.

Studies in 1971 and 1985 indicated that a reduction in the number of Tennessee's weekly auction markets would enhance the efficiency of the state's livestock marketing system. Other recent studies have indicated that the economic advantages of electronic marketing may reduce the importance of traditional marketing methods. However, weekly auctions are still the primary market outlet for Tennessee feeder cattle. Therefore, feeder cattle producers may base their choice of a market on other criteria.

The specific objectives of this study were to determine why producers use or do not use certain types of marketing alternatives, to determine relationships between producer characteristics and amount of cattle sold through each market type, and to determine the relationships between producer characteristics and reasons for the choice of markets. This study was based on survey results from a 1992 mail questionnaire in which producers were asked to rate the level of importance of advantages and disadvantages of weekly auctions, graded sales, video board sales, satellite video sales, and direct selling. Descriptive statistics, regression analysis, and ordered probit models were used to analyze the survey results.

The results indicated that nearly 75 percent of the feeder cattle sold by responding producers were marketed through weekly auction sales. The average number of head sold per year was nearly 30, while the mean number of brood cows and acres of pasture was 39 and 137, respectively.

Producers did not consider tradition or habit to be an important reason for liking a particular type of market. Producers gave highest importance ratings to higher prices, market location, and favorable weighing conditions. Consignment requirements, distance to market, minimum lot size, and possibility of getting a bad check were considered the most important disadvantages of some market types.

Regression analysis showed that as the number of cattle sold increased, the percent sold through weekly auctions decreased and that producers who considered beef cattle to be their principal farm enterprise were more likely to sell a smaller percentage of their cattle through weekly auctions. As the number of head sold at less than 500 pounds increased, the percent of cattle sold through graded sales decreased. As the number of head sold and as the age of the producer increased, the percent sold through video board sales increased. Producers who considered dairy cattle to be their principal farm enterprise sold a larger percent of cattle through video board sales. As the age of the producer increased, the percent of cattle sold through direct sales decreased and producers who considered beef cattle to be the principal farm enterprise sold a larger percent of their cattle through direct sales.

Probit analysis was used to develop relationships between producer characteristics and producer importance ratings of advantages and disadvantages of weekly auctions, graded sales, and direct selling. The results of the probit models failed to indicate significant relationships.

Download
Files over 3MB may be slow to open. For best results, right-click and select "save as..."

Share

COinS