USDA Releases Final Livestock and Meat Marketing Report
News Date February 20, 2007
USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA) released the "GIPSA Livestock and Meat Marketing Study," last week. The report reviewed the use and impacts of marketing arrangements in the livestock and meat industries. Overall, the report found that alternative marketing arrangements (AMAs) increase the economic efficiency of the cattle, hog, and lamb markets, and that these economic benefits are distributed to consumers, as well as to producers and packers who use AMAs.
The study, mandated by Congress in 2003, assesses the effects on the market of packer ownership of livestock more than 14 days in advance of slaughter and examines alternative methods to procure and transfer livestock from farm to retail. GIPSA contracted with RTI International to conduct an extensive study of the economic effects of AMAs on beef, pork, and lamb marketing channels. AMAs are methods by which livestock and meat are transferred through successive stages of production and marketing, and include forward contracting, packer ownership, and marketing agreements. The final report: (1) addresses the extent of AMA's use; (2) analyzes price differences and short-run market price effects of AMAs; (3) measures and compares costs and benefits associated with spot or negotiated marketing arrangements and AMAs; and (4) analyzes the implications of AMAs for the livestock and meat marketing system.
The final report, including peer reviewers' comments, and additional information about the study are available on GIPSA's website at http://www.gipsa.usda.gov and then link to ''Marketing Study.'' (Contact: Jennifer Yezak)