exam 1: Marketing Flashcards
what are the two types of marketing
public marketing
direct marketing (most common)
main types of public markets are __________ and __________.
stockyards
auctions
today, less than ___% of nations hogs are sold through public markets
5%
the major disadvantage of public markets
markets price hogs only on a live weight basis
direct marketing
when producers negotiate the sale of their own hogs
over ______% of hogs are direct marketed
80%
examples of direct marketing
sales to packing plants
packer-owned buying stations
order buyer
independent buying stations
how are direct market hogs sold
live weight basis
carcass weight basis (more popular)
what are the three selling types
live pricing
carcass weight pricing
carcass merit pricing
live pricing
buyers use visual inspection to assess the value of the hog
reputation bids based on carcass traits of previous marketing
most rare, not beneficial
advantages of live pricing
easy for the seller to understand
price is multiplied by the weight of the hogs to calculate value/producer knows income
disadvantages of live pricing
difficult for buyers to accurately determine group of hogs value before slaughter
tendency to underprice hogs with heavy muscled, lean carcasses and overprice hogs with light muscle, fat carcasses
carcass weight pricing is also known as
hot carcass weight
carcass weight pricing
producers are paid based on the pigs carcass weight
under carcass weight pricing, dressing % is the most important factor
Dressing % is affected by the
Amount of fill, fat, muscle, and carcass trimming
advantages of carcass weight pricing
more accurate than live pricing
rewards heavy muscled, lean carcasses
disadvantages of carcass weight pricing
producer assumes the risk of trimming and condemnation losses
carcass merit pricing (lean value pricing)
major method for pricing hogs
also referred to as lean value pricing OR fat-free lean
Individual hog carcasses are evaluated as they pass from kill floor to the chill room in attempt to measure % lean of % fat free lean
What are the two main factors used in the evaluation process of carcass merit pricing
carcass weight
amount of backfat
_________ or _______ from a base price are computed for each carcass to determine the final value of the hog when using carcass merit pricing
price premiums
discounts
advantages of carcass merit pricing
more accurately reflects the hog carcass than live pricing
buyers send seller a report so they can use it as a guide in management decisions like selecting breeding stock
disadvantages of carcass merit pricing
Carcass measurements are taken after the producer has left so if errors are made, the seller assumes the loss
each packer uses a different technique
procedures for estimating pork carcass composition
ribbed carcasses (ruler and grid)
unribbed carcasses (ruler)
Fat-o-meter
animal ultrasound system
Carcasses measured with the animal ultrasound system
scans carcass to measure fat and muscle suing actual images of the LEA to determine the average loin muscle depth
- measures average fat spanning last rib to tenth rib
-no cutting required
are animal ultrasound systems used often to measure carcasses
no because they are expensive
but very accurate
carcasses measured with the fat-o-meter
an optical probe is used to detect white fat and red/darker lean
no cutting required
hot carcass weight, fat depth, and loin muscle depth between 3 and 4 rib are needed
unribbed carcasses (ruler)
hot carcass weight and last rib backfat thickness are combined to estimate pounds of fat free lean
no cutting required
unribbed carcasses (ruler): last rib carcass back fat thickness is determined by
measuring midline fat thickness, including skin, at the last rib
ribbed carcasses (ruler and grid)
hot carcass weight, tenth rib fat thickness over loin, and loin muscle area at the tenth rib are measured to predict pounds of fat free lean
** not frequently used
does using the ribbed carcasses (ruler and grid) require cutting
yes
Loin muscle can be measured on a hanging carcass by cutting through the backbone and loin muscle between the 10th and 11th rib perpendicular to backbone
how do packers determine carcass value
each carcass is evaluated and priced independently by the packer (establish own price)
how do packers determine their base price
base it on:
publicly reported cash market trades
future market price
publicly reported feed/plant averages
are all carcasses USDA inspected?
yes but not normally USDA graded
what are the two ways to determine carcass value
fixed premium/discount (known dollar amount)
Relative premiums/discounts (percent adjustment)
