Market functions and the plight of the Northeast livestock auction industry [North Eastern States (USA)]

Extract: The purpose of this paper is to test the hypothesis that auction market costs exceed allowable fees for markets in dairy states. Permissible fees are regulated by the Packers and Stockyards Administration (PandSA) of the U.S. Department of Agriculture in much the same fashion as are public...

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Published inJournal of the Northeastern Agricultural Economics Council Vol. 8; no. 2; pp. 221 - 229
Main Author Lesser, W.H
Format Journal Article
LanguageEnglish
Published 01.10.1979
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Abstract Extract: The purpose of this paper is to test the hypothesis that auction market costs exceed allowable fees for markets in dairy states. Permissible fees are regulated by the Packers and Stockyards Administration (PandSA) of the U.S. Department of Agriculture in much the same fashion as are public utility fees. The results of this study support the hypothesis that the costs of operating auctions in dairy states exceeds permissible service derived revenue for several size categories of markets. The inequality of costs and permissible revenue, known as revenue requirements, is due to the relative costliness of dairy auctions compared to the national average. Thus the future of some of the markets in the principal dairy states in the Northeast and elsewhere is in doubt
AbstractList Most economists characterize spot markets as performing two basic functions: price discovery and locational services (which may be subdivided into assembly and sorting). The livestock auction industry in total does not differ from this general characterization since its basic function is to bring buyers and sellers to the place where the animals are being marketed. Thus whether the principal species and class handled in a particular market is feeder pigs or cull beef cows the functions performed at this level of generality are the same. The marketing procedures used are also highly uniform, consisting principally of unloading, sorting, presentation to buyers and reloading, along with the necessary record keeping. As a result there is a tendendy to view this industry as homogenous with some unit cost differences due principally to variation in size.
Extract: The purpose of this paper is to test the hypothesis that auction market costs exceed allowable fees for markets in dairy states. Permissible fees are regulated by the Packers and Stockyards Administration (PandSA) of the U.S. Department of Agriculture in much the same fashion as are public utility fees. The results of this study support the hypothesis that the costs of operating auctions in dairy states exceeds permissible service derived revenue for several size categories of markets. The inequality of costs and permissible revenue, known as revenue requirements, is due to the relative costliness of dairy auctions compared to the national average. Thus the future of some of the markets in the principal dairy states in the Northeast and elsewhere is in doubt
Author Lesser, W.H
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References S0163548400004878_ref6
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(S0163548400004878_ref1) 1978
S0163548400004878_ref8
Greene (S0163548400004878_ref3) 1978
Yager (S0163548400004878_ref9) 1977
S0163548400004878_ref2
S0163548400004878_ref4
(S0163548400004878_ref7) 1977; XV
References_xml – volume-title: Maximum Likelihood Estimation of Econometric Frontier Functions
  year: 1978
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    fullname: Greene
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  doi: 10.2307/1924032
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– volume-title: Agway
  year: 1978
  ident: S0163548400004878_ref1
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  doi: 10.33915/agnic.606
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  year: 1977
  ident: S0163548400004878_ref7
  publication-title: Packers and Stockyards Administration, Resume
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– volume-title: Feeding and Marketing Strategies for Cull Cows
  year: 1977
  ident: S0163548400004878_ref9
  contributor:
    fullname: Yager
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Snippet Extract: The purpose of this paper is to test the hypothesis that auction market costs exceed allowable fees for markets in dairy states. Permissible fees are...
Most economists characterize spot markets as performing two basic functions: price discovery and locational services (which may be subdivided into assembly and...
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Title Market functions and the plight of the Northeast livestock auction industry [North Eastern States (USA)]
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