Estimating the Implicit Prices of Beef Cattle Attributes: A Case from Alberta

Abstract

Pressures on beef producers to provide lean beef of consistent quality have been mounting in recent years. Yet this requires beef breeders to alter and broaden cattle improvement objectives to include carcass merit traits. They need information on heritability and the values associated with genetic traits in order to effectively do this. This study estimates the implicit prices in east‐central Alberta, Canada, for bull attributes using a hedonic pricing model. The results indicate that the most important bull attributes to buyers (breeders) in this region are sale weight, birth weight and scrotal circumference. Also important are ribeye area and average daily gain. Selection of these attributes conforms with expectations because they are moderately to highly heritable and are associated with improved fertility and reproduction, reduced production costs and higher returns. In addition, the results suggest that breeders have been changing selection emphasis away from reproduction traits and toward carcass traits associated with improved production efficiency and consumer demand. Depuis quelques années, les producteurs subissent des pressions grandissantes pour fournir du bœuf maigre de qualité uniforme. Ces pressions contraignent les éleveurs à modifier et àélargir leurs objectifs d'hybridation en y incluant les caractères génétiques qui codent les paramètres de la carcasse. Pour y arriver, les éleveurs ont besoin de renseignements sur l'héritabilité et la valeur des caractères en question. Dans cet article, le prix implicite des attributs des taureaux dans le centre‐est de l'Alberta est estimé selon un modèle hédoniste. Les attributs les plus importants pour les acheteurs (éleveurs) de la région sont le poids à la vente, le poids à la mise bas et la circonférence du scrotum. Comptent aussi pour beaucoup la surface du faux‐filet et le gain quotidien moyen. La sélection de tels attributs est conforme aux prévisions, car il s'agit de caractères très héréditaires qu'on relie à une fertilité accrue et de meilleures aptitudes à la reproduction, done à une réduction des coûts d'élevage et à un rendement plus élevé. Par ailleurs, les résultats de l'analyse laissent croire que les éleveurs ont réorienté leurs programmes de sélection, laissant de côté les aptitudes à la reproduction pour les paramètres de la carcasse associés à un meilleure productivité et à la demande des consommateurs.

An Evaluation of Economic Models to Provide Policy Advice in Response to the BSE Crisis in Canada

“… Note: Brester et al (2002)[BR]; Cranfield and Goddard (1999)[CR]; Curtiss (2000)[CU]; Howard and Cranfield (1995)[HO]; Quagrainie et al (1998)[QU]; Schissel et al (1995)[SC]; Unterschultz et al (1997)[UN]; Walburger (2002)[WA]. …”

“…Cranfield and Goddard (1999) used a simulation model to estimate the impact of advertising on Canadian and U.S. beef demand as well as the impact of advertising funded by Canadian cattle producers. Walburger (2002) used a hedonic pricing model to estimate the implicit prices in east‐central Alberta for bull attributes. Quagrainie et al (1998) investigated the potential effects of identified product and consumer characteristics on the probability of fresh meat product being purchased in four western Canadian provinces.…”

“…Linkages to foreign markets, especially to the United States, were included in studies by Schissel et al (1995), Cranfield and Goddard (1999), and Brester et al (2002). Only Brester et al (2002) and Walburger (2002) analyzed major government programs such as subsidies to specific stages of production.…”

Simulating economic values of a genetic improvement program for Australian farmed saltwater crocodiles*

“…If the value of the breeding animal in production is related to its inherent genetic worth, then improvements should also be reflected in the breeding animal's value (Walburger 2002). By considering derived demand for an input into production as a function of its characteristics, hedonic modelling can be used to measure the implicit values of genetic characteristics for which there is no market.…”

“…Yet, as Kerr (1984) notes, the potential for genetic improvement remains for livestock regardless of whether or not there have been changes in relative factor prices. Moreover, genetic improvement may be driven by demand pressures, reflecting quality concerns in the marketing chain (Walburger 2002).…”