Three articles concerning risk management in the meat industry

Formulating strategies to mitigate price risk has become a major concern for meat industry managers. Increased price volatility and the demand for fixed price commitments from large buyers present wholesalers with growing challenges to remaining both competitive and profitable;The first two articles examine cross-hedging as a potential means to hedge price risks for beef and pork products (respectively) which do not have a corresponding futures contract. Hedging ratios are developed using simple linear regression techniques for a variety of commonly purchased meat products. An estimation and description of the basis risk involved in hedging these products is also presented. Finally, examples of typical cross-hedging strategies using the results obtained in each article are developed and discussed;The third article incorporates profit target motives and meat industry manager\u27s feelings regarding deviations from these targets into the formulation of purchasing and inventory strategies. A risk-return model of purchase strategy is developed such that risk is measured with reference to expected outcomes below target, and return is measured with reference to expected outcomes above target

DEVELOPING REGIONAL INPUT-OUTPUT MODELS FROM THE U.N. FORMAT ADOPTED BY THE U.S. IN THE NEW 1972 INPUT-OUTPUT MODEL

International Relations/Trade,

E-COMMERCE IN AGRICULTURE: DEVELOPMENT, STRATEGY, AND MARKET IMPLICATIONS

Marketing,

Hedging Pork Products Using Live Hog Futures: A Feasibility Analysis

The increased volatility of commodity market prices in the 1970\u27s and early 1980^s has sharply increased the risks associated with commodity procurement and inventory management in most food processing and distribution firms. Many firms dealing in commodities which have futures markets can use the futures markets as procurement or inventory management tools, but many commodities have no viable futures market. For example, most wholesale meat products (with the exception of pork bellies, boneless beef, and iced broilers) are traded only on cash markets, so hedging pork loins, hams, and most other beef and pork products cannot be done in a directly comparable futures market..

Economic Issues and Analyses in Biotechnology

Although the evolution of the food and agricultural system in developed countries seems to be progressing at an ever-increasing rate, in reality this trend has largely been realized as small bursts of progress followed by relatively dormant periods until another break-through is achieved. These break-throughs occur in a variety of ways, including the scientific, such as the development of new hybrids and genetic lines, useful chemicals etc., the political, such as the opening of trade with China and other communist countries, and the behavioral changes such as the shift toward leaner meats, more natural food products, and more highly processed heat and serve preferences among consumers

Economic Evaluation of Parasite Control in Swine A Case of Ivomec

Economic losses, increased cost and/or decreased revenue, associated with disease outbreaks or parasites in swine are significant [2, 3 and 4]. Knowledge of economic implications of disease presence is needed in making hog production health management decisions. The adverse economic and production effi^ts of internal and external parasitism. in swine are well-recognized. In the. past, data limitations have made it difficult to quantify the effect of parasite control on grow-finish and reproduction performance in swine. Average daily gain decreases from 5-15% from mange infestations have been reported by several, researchers. Similarly, internal parasitism has been demonstrated to cause substantial economic losses without precipitating significant clinical disease or death of affected swine. These insidious losses cause millions of dollars in losses to the United States and world swine industry each year

Transforming Commodity Animal Agriculture : How Easy?

Relentless technological change and intermediate market failure are re-shaping the supply chain for fresh meat. Investment over the last twenty years has primarily been in fixed assets that lower the shutdown price point and lead to structuralized overproduction of commodities. To avoid the non-sustainable approach of a single minded strategy focused on cost reduction, firms are focusing on value-added and branding approaches which present problems with search costs and supply risk. A coordination phase is emerging where firms are experimenting with both contractual and integrated approaches to acquire large supplies of raw materials that support branding attributes. Information sharing is crucial to overcome these problems but oligopoly competitors resist it due to the potential for competitive disadvantage. A new supply chain is beginning to emerge, focused on consumer demand but its implementation is proceeding slowly.Includes bibliographical referenc

Three articles concerning risk management in the meat industry

Formulating strategies to mitigate price risk has become a major concern for meat industry managers. Increased price volatility and the demand for fixed price commitments from large buyers present wholesalers with growing challenges to remaining both competitive and profitable;The first two articles examine cross-hedging as a potential means to hedge price risks for beef and pork products (respectively) which do not have a corresponding futures contract. Hedging ratios are developed using simple linear regression techniques for a variety of commonly purchased meat products. An estimation and description of the basis risk involved in hedging these products is also presented. Finally, examples of typical cross-hedging strategies using the results obtained in each article are developed and discussed;The third article incorporates profit target motives and meat industry manager's feelings regarding deviations from these targets into the formulation of purchasing and inventory strategies. A risk-return model of purchase strategy is developed such that risk is measured with reference to expected outcomes below target, and return is measured with reference to expected outcomes above target.</p

New Developments in Contract Relationships in the Swine Industry (Power Point Presentation)

Livestock Production/Industries,