Contract Pricing and Packer Competition in Fed Cattle Market

We use a game-theoretical framework to analyze the coexistence of spot and contract markets in the cattle industry. A duopsony scenario with two packers and N feeders is used to reflect the reality in the cattle industry. Our main contribution is to incorporate the risk components and the pricing of hedonic attributes of cattle quality. Our preliminary results show that packers have an incentive to transform bidding strategies in spot markets when a series of hedonic characteristics play some significant roles in establishing cattle prices in contract market. That is, we will show that the effectiveness of contract with TOMP clauses on packer competition in a spot market depends on whether there is a correlation between spot price and hedonic characteristics. The results may shed light on understanding potential effects of captive supplies on market power and may aid in the assessment of the policies designed to enhance competition in the cattle industry.Marketing,

The Impacts of Animal Disease Crises on the Korean Meat Market

Employing the error correction method and historical decomposition with direct acyclic graphs, we quantify the impacts of domestic and oversea animal disease crises on the Korean meat markets. We find that (a) the market partially recovered 16 months after the foot-and-mouth outbreak in 2000, and 13 months after the avian influenza and the U.S. BSE incidents in 2003; (b) animal disease outbreaks have differentiate impacts by disease type and supply chain level. Retailers likely to have windfall profits as the retail price margin increased relative to the farm and wholesale levels; and (c) disease outbreaks affect dynamic price interdependence.Animal disease outbreak, Error correction model, Direct acyclic graphs, Korean meat market, Historical Decomposition, Price margins, Livestock Production/Industries, C32, Q11, L11,

The Effect Of Corporate Governance On Unfaithful Disclosure Designation And Unfaithful Disclosure Penalty Points

This paper investigates the relation between Unfaithful Disclosure Corporations (“UDC”) and corporate governance using listed firm (KOSPI and KOSDAQ) data in Korea. Prior literature reports that corporate governance has an impact on the level of disclosure and the quality of disclosure provided by companies. However, it is hard to find the studies about corporate governance and UDC at the term of disclosure quality. Compare to some financially advanced countries, Korea established corporate governance in a relatively short period of time; hence concerns have been raised the corporate governance have not played effective role to monitor management. We question how corporate governance affects companies’ unfaithful disclosure by using several corporate governance proxy variables and UDC data which is unique system in Korea. From the empirical tests, we find a negative association between the proportion of outside directors, an indicator of the board’s independence, and UDC designation, among companies listed on both KOSPI and KOSDAQ. On the other hand, there is a significant positive association between the proportion of outside directors and UDCs’ imposed and accumulated penalty points among KOSDAQ-listed companies. This implies that outside director system effectively play a monitoring role however due to different natures of members included in outside directors, the system often fails to control regarding based reasons for penalty points imposition. In addition, we find the percentage of foreign equity ownership showed statistically significant positive association with UDC designation and a significant positive association with the imposed and accumulated penalty points among KOSPI-listed companies. We interpret this results that foreign investors with a short-term investment propensity may not enough to play a proper monitoring role in Korea and thereby they cannot effectively control the disclosure quality provided by the management. We also find that there is a significant positive association between the percentage of managerial ownership and UDC designation in the KOSDAQ market.   This study will contribute to academics and disclosure-related practitioners by documenting about corporate governance and its impact on unfaithful disclosure corporations

Economic analysis of the meat supply chain

Recently, the meat supply chain has undergone a number of structural changes including increased concentration and a greater degree of quasi-vertical integration coordinated through contract procurement. The effects these changes have had on the meat supply chain, arranged as a complex array of producers, processors, distributors, and retailers, are not yet known. This study investigates the motives for, and consequences of, recent changes in the meat supply chain. The first essay examines causality among variables in the U.S. cattle supply chain using temporal and contemporaneous causality methodologies. Tests for structural changes reveal a likely structural change between later 1996 and early 1997 that was likely induced by the turnaround of the U.S. cattle inventory accompanied with severe droughts in Midwest. Results suggest that overall temporal causalities in the U.S. cattle supply chain become weaker after the structural change, though relatively strong causalities are found in pre-break periods. In contrast, strong contemporaneous causal relationships are founded in post-break periods. One conclusion is that recent structural changes in the industry are resulting in more rapid transmission of information through the supply chain. Causal evidence also suggests that the direction of information transmission has changed in recent times from moving generally downstream to moving generally upstream. This might be the result of increased concentration at the packer and retail levels giving rise to increased ability to “set” prices. The second essay develops a theoretical model to investigate the dynamic effects of the contract procurement on packer competition in the spot market with general contract pricing scheme. Results indicate that packers have an incentive to consider the effects of spot market purchases on contract procurement even after accounting for hedonic characteristics of live cattle and risk aversion in cattle feeding operations. The third essay investigates the impacts of domestic and overseas animal disease outbreaks on the Korean meat supply chain. Market impacts are investigated using both forecasts and historical decomposition of price innovations based on an error correction model (ECM) of the Korean meat sector. Results indicate that while the affected markets suffered significantly from the outbreaks, the impacts seem temporary and substitute meat markets benefited significantly

Measurement of Planetary Boundary Layer Winds with Scanning Doppler Lidar

The accurate measurement of wind profiles in the planetary boundary layer (PBL) is important not only for numerical weather prediction, but also for air quality modeling. Two wind retrieval methods using scanning Doppler light detection and ranging (lidar) measurements were compared and validated with simultaneous radiosonde soundings. A comparison with 17 radiosonde sounding profiles showed that the sine-fitting method was able to retrieve a larger number of data points, but the singular value decomposition method showed significantly smaller bias (0.57 m s(-1)) and root-mean-square error (1.75 m s(-1)) with radiosonde soundings. Increasing the averaging time interval of radial velocity for obtaining velocity azimuth display scans to 15 min resulted in better agreement with radiosonde soundings due to the signal averaging effect on noise. Simultaneous measurements from collocated wind Doppler lidar and aerosol Mie-scattering lidar revealed the temporal evolution of PBL winds and the vertical distribution of aerosols within the PBL