Which Broiler Part is the Best Part?

Abstract

Predominance of production and marketing contracts in the broiler industry suggests a traditional analysis of price relationships might no longer be appropriate. In this study, markets for broiler cuts are defined as spatial. Results of VAR analysis of monthly USDA data from 1987-2000 verify the price relationship between white meat and whole broiler prices. Price shocks in the boneless skinless breast market have a greater impact than dark meat shocks, suggesting this market is most important in price transmission. These results will assist industry participants to form more effective marketing and pricing strategies, thus adding efficiency to the market.

Keywords: Broiler markets, market structure, marketing contracts, price transmission

JEL Classification: C4, D4, L1, Q0