Agricultural Economics Department

 

Date of this Version

July 2006

Comments

Selected Paper prepared for presentation at the American Agricultural Economics Association Annual Meeting, Long Beach, California, July 23-26, 2006. Copyright 2006 by Dillon M. Feuz, Matt C. Stockton and Suparna Bhattacharya. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies.

Abstract

What is the price relationship between a cull cow in San Angelo, Texas, Sioux Falls, South Dakota and other major U.S. cull cow markets and those in Ontario or Alberta Canada? How are these prices impacted by the price for lean beef trimmings or the price of imported lean beef from Australia or New Zealand? What impact did the discovery of bovine spongiform encephalopathy (BSE) in North America in 2003 have on these price relationships? Answers to these and other questions are the purpose of this paper.

Numerous market and price analysis studies exist on the fed cattle and feeder cattle markets in the U.S. However, there have been only a few recent studies on the U.S. cull cow market. Yager, Greer and Burt, 1980, and Tronstad and Gum, 1994, looked at optimal culling and marketing decisions, but neither of these two studies compared markets over time. While only limited research has been done on this market, it is an important part of the total U.S. beef market. Ground beef represents about 44% of all retail beef purchased and 59% of all fresh beef consumed in U.S. households. The cull cow market is a major supplier of lean beef and trimmings for the grinding industry. Beef from cull cows is also used for the low-end steak houses, for many of the thinly sliced deli beef products and for some of the other pre-cooked and further processed beef products for sale in retail grocer stores.

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