A Comparison of Carcass Value Pricing Systems of Southeast Hog Plants

David Kenyon and John McKissick

No 285631, 1981-1999 Conference Archive from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: Carcass value pricing systems of six Southeast U.S. plants were analyzed. All plants measured hot carcass traits with Fat-O-Meater. Base live prices were derived by formula from various combinations of Midwest prices. One plant starts with a base carcass price. Standard yield varies substantially across plants. Base carcass price is base live price divided by standard yield except for the plant starting with carcass price. All plants but one applies minimums and discounts to base carcass price. One plant makes adjustments to live price. The desired carcass weight is 172 to 194 pounds. Discounts are larger for lighter weights than for equivalent increases in heavier weights. Backfat premiums are given by all plants starting at 25 mm or less. Loin depth premiums and discounts are relatively small compared to weight sortbkfjIJ195, from $50.68 to $52.93 cwt. After adjusting for premiums and discounts, the adjusted carcass price 49.97 to $52.73 cwt. for a typical carcass. The price spreads among plants were greater for light compared to heavy carcasses. The price differences between some plants is costs. The price difference between a typical and ideal carcass is approximately $14. The carcass value pricing system is sending producers a strong signal to , uniform, leaner, and wel-muscled hogs. Given the wide diversity of methods used in determining live price, carcass price, yield, and premiums and discounts associated with backfat, and loin depth, it is diffcult for producers to compare prices received from the six systems.

Keywords: Marketing (search for similar items in EconPapers)
Date: 1995-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nc8191:285631

DOI: 10.22004/ag.econ.285631

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