How Meatpacker Procurement Policies Impact Producers in the Beef Supply Chain

Producers and policy makers have shared concerns surrounding the competitive landscape of the beef industry in the U.S. for decades. Along with increased ownership concentration, the beef processing industry has also become more vertically integrated and has expanded its use of contracts (also known as alternative marketing agreements). These industry trends make the market for cattle increasingly thinly traded (i.e., few cash transactions). These thin markets are more susceptible to manipulation and easily impacted by market participates (e.g., meat packers).

WVM Blog #2: Value-Added Management Programs

Ranchers marketing their cattle through Western Video Market (WVM) are often at the forefront of the industry, enrolling in and differentiating their cattle on sale day with the newest value-added management and marketing programs available. Using data from WVM's 2017 satellite video auctions allows us to estimate the average premium/discount associated with marketing under each of these programs individually. 

WVM Analysis Overview: What Value-Added Management Programs Really Add Value to Your Cattle?

The ever-expanding suite of value-added management and marketing programs available to cattle ranchers today creates substantial ranch-level complexity. Cattlemen are faced with the challenge of determining which programs will differentiate their cattle on sale day while maximizing the profitability of their operations. Although all of these programs are likely to add costs, the additional income generated from each of these programs is uncertain.