Wednesday, November 11, 2009

Lit in Review: Livestock

One of the things I have looked forward to in starting a work blog was writing up brief summaries of some of the research others' have done with comments. In part I hope to provide a service for others, bringing you a summary of recent research. In part though it's a convenient place for me to keep my notes about research I've read so when I scratch my head trying to remember who said what, I've got my notes most readily available and searchable for my own benefit. Please feel free to debate particular papers or to bring more on a particular topic to my attention.

Review of Agricultural Economics Fall 2009: Livestock articles

"The Economics of Dairy Anaerobic Digestion with Coproduct Marketing" by Bishop and Shumway. Descriptive, single firm. One of the solutions to the pollution livestock produce is to install some machines to turn methane into electricity (anaerobic digestion technology). But is this economical? The authors find that the main private benefits in the first two years of operation for dairy farms in Washington state come from producing and selling electricity to public utilities and in receiving payments for turning other people's organic waste [salmon carcasses, cheese whey, inedible eggs] into electricity. Average profits for running these machines were $75k and $140k in year 1 and 2, but they cost $1.1mil to set up. The authors emphasize that location - proximity to coproduct markets - matters. Regulations would need to be changed to synch up the incentives of farm-energy-producers and public utilities. - Note for Chapter 8. (picture: CalPoly anaerobic lagoon, from Wiki)

"Agricultural Trade among NAFTA Countries: A Case Study of US Meat Exports" by Henneberry and Mutondo. Demand analysis, 1995-2005. US meat exports doubled to both Canada and Mexico since NAFTA [correlation is not causation] and account for 40% of beef, 35% of pork, and 17% of US poultry exports 2002-05. This is despite the 2003 BSE outbreak and increased competition from other countries. Poultry and beef from your own country are substitutes if you don't account for country of origin and complements if you do (Yang and Koo, 1994), so the distinction matters in demand analysis. Canadian meat buyers are not very price sensitive to US meat prices, so increasing meat prices likely means increasing revenues from Canada, but the opposite is true for Mexico. - Meatpacking book

"Costs of Adopting a [HACCP] system: Case Study of a Chinese Poultry Processing Firm" by Wang, Yuan, and Gale. Descriptive, single firm - Beijing Dafa. As part of its accession to the WTO, China has pushed to improve exported meat quality since Dec 2001. Setup cost the firm $4.2mil or 2% of gross income, with ongoing monthly costs of $0.3mil - half of that is sanitation. Benefits were characterized as long-term, strategic, and intangible [reduced inferior and adulterated products, improved reputation, consumer loyalty, and product consistency, and increased exports]. The authors are concerned that the costs may be very difficult for small, domestic producers to recoup, who would likely face higher costs and less ability to increase prices to make up for it. - Meatpacking book

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