Pricing Efficiency of the Cattle Industry in Batangas

Date

2007

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Abstract

The general objective of the study was to determine the pricing efficiency of the cattle industry in selected towns of Batangas. Specifically the study aimed: 1.) to trace the marketing channel for the cattle industry in Batangas; 2.) to describe the marketing operations and practices done by the intermediaries in Batangas; 3.) to determine the pricing efficiency of the traders in the cattle industry under LOM; and 4.) to be able to identify existing problems in the cattle industry and be able to suggest possible solutions and recommendations. This study addressed problems in marketing inefficiency and aimed to benefit the following: farmers, middlemen and consumers and also to inspire the country’s policy makers into creating better policies to improve the industry of beef. This study evaluated the pricing efficiency through the used of marketing margins, marketing costs and return on investment. It was found out that the assembler- wholesalers had the highest capital investment which amounted to an average of P250,000. The wholesaler retailer came next with an average investment of P 200,778 and lastly the retailer who had an average investment of P 27,908. The study also showed that the assembler-wholesaler incurred the highest marketing cost which amounts to P 4.97 per kilogram liveweight. The assembler-wholesaler is followed by the wholesaler-retailer who incurred an average marketing cost of P 4.27 per kilogram liveweight and finally the retailer who incurred an average marketing cost of P 3.79 per kilogram liveweight. On a per kilogram basis, traders who obtained their cattle in the auction market acquire the following profits: for the assembler-wholesalers it amounted to P14.03 per kilogram liveweight and for the wholesaler-retailers it amounted to P6.73 per kilogram liveweight. It was found out from the study that the traders who sold in non-auction markets acquired the highest profit at P 15.03 per kilogram liveweight. The wholesaler- retailers acquired a profit of P7.73 per kilogram liveweight. The difference in their profits was attributed to the low buying prices of the traders who bought from backyard farms. The retailer incurred a profit of P11.01 per kilogram dressed weight. The profitability analysis showed that the traders who made use of the auction market had a relatively lower ROI than that of the traders who sourced their cattle directly from the cattle raisers. This showed that the presence of the auction market made the system more price efficient. Based on the results, it can be concluded that venturing in beef marketing is very profitable. However, the marketing system was found to be inefficient. This could mean that the raisers received very low prices for their animals while the consumers purchased beef cuts at high selling prices.

Language

English

LC Subject

Cattle trade, Pricing

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2007 A14 B38

Notes

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Document Type

Thesis

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