Beef packer conduct, alternative approaches to price discovery, and success factors for new generation cooperatives

Scope and method of study. The purpose of the first chapter was to use concepts from game theory to discover the patterns of packer behavior in an experimental market for fed cattle. Switching regressions were used to evaluate packer conduct at the industry level, and reaction functions were used to test for collusive behavior at the firm level. The purpose of the second chapter was to present and empirically test two alternative theoretical models for livestock price discovery. The two alternatives were a derived demand model and a partial adjustment/market efficiency model. Data from an experimental market for fed cattle was used in the empirical applications. The purpose of the third chapter was to discover those factors that are most important to the success of value-added New Generation Cooperatives. A survey of the managers of fifty such enterprises was conducted. Respondents were asked to rate the relative importance of five factors in each of ten categories. A weighted ranking for each factor overall and within common commodity cooperative groups was then calculated.; Findings and conclusions. Results of the first chapter were that evidence of collusion was discovered at both the industry and firm levels. It was further found that the imposition of marketing agreements in the experimental market and the withholding of information to market participants both affect the level of collusion that packers are able to maintain. This could have important implications for the discussions of mandatory price reporting in the real market. Results of the second chapter were that the partial adjustment/market efficiency model outperforms the derived demand model according to model selection criterion, but that model choice should be driven by theory and the objectives of the researcher. Results of the third chapter were that the most important success factors vary by commodity/activity of the New Generation Cooperative, but that across all such enterprises, those factors relating to planning and development, as well as financing and costs are the most important.