Search

The United States Department of Agriculture Agricultural Marketing Service (USDA AMS) began publishing formula base price information in August 2021. Considerable variation in the types of cattle priced via formula has raised questions about the level of base price transparency that can be gleaned from formula base price reports. This study employs 6 years of transactions to estimate hedonic models assessing the capability of existing data to describe variation in formula base prices. Results suggest factors beyond those reported to USDA AMS by packers influence base prices. We offer suggestions for improved data collection to make hedonic modeling of base prices more effective for reporting market information. [ABSTRACT FROM AUTHOR]

• Boxed beef market reports from United States Department of Agriculture Agricultural Marketing Service are the foremost data source for analysis of the US wholesale beef market. • Boxed beef market reporting has remained largely unchanged in two decades as cattle and beef commerce have substantially changed. • A large portion of the rich data collected by United States Department of Agriculture Agricultural Marketing Service is not utilized to inform boxed beef market reports. • Hedonic models offer a means of enhancing boxed beef market reports to utilize more data and report premiums for differentiated products, which are becoming increasingly important to wholesale beef markets. Boxed beef market reports published by USDA AMS provide current US beef supply and demand information and are the foremost data source for private, government, and academic analysis of the US wholesale beef market. Boxed beef market reporting, in its current form, began in 2001 and the structure has remained largely unchanged. Over the same time, beef commerce has undergone substantial shifts in the types of products and product mix produced by beef packers. As a result, trade of many economically important beef products does not inform published composite values and prices. Weekly USDA published composite prices and values commonly rely on less than half the volume of boxed beef traded. To better inform stakeholders, boxed beef reports need to evolve to match modern beef commerce and leverage the rich data already collected by USDA AMS. This study develops and demonstrates a method whereby USDA AMS could produce novel beef market reports. Specifically, we use boxed beef transaction data collected by AMS to specify hedonic models to estimate implicit market premiums for antibiotic-free ribeye and retail-ready strip loin. The technique can be expanded and adapted to enhance boxed beef market reporting. We conclude with guidance for policy makers involved with ongoing policy discussions that structure USDA AMS data collection and public reports. [ABSTRACT FROM AUTHOR]