The name is absent

pirically estimated in other studies [2, 6, 10].
The equations do serve the intended purpose of
illustrating the point that there is, theoretical-
ly and practically, a high degree of interdepen-
dence among the various beef products in the
determination of both their supply and
demand.

The foregoing model clearly implies that if
all other factors remain constant, increases in
the equilibrium quantity exchanged of ground
beef [(QD_gb, = QS_gbl)<(QD_gb2 = QS_gb2)] necessi-
tate compensating decreases in tbe equilibrium
quantity exchanged of other beef products. Al-
ternatively, increases in the quantity ex-
changed of ground beef can be provided
through increases in the quantities of imported
deboned beef and/or domestic manufacturing
deboned beef and/or beef trim used in the pro-
duction of ground beef. Conversely, if the equi-
librium quantity exchanged of ground beef is
to remain constant given a decrease in the sum
of the quantities of imported beef, domestic
manufacturing beef and beef trim used in the
production of ground beef, beef from the other
beef product categories must be used to make
up the difference.

The substitutability of sources of ground
beef is further complicated by the requirement
that ground beef consist of approximately 25
percent fat and 75 percent lean.⁴ Thus, the pro-
duction of ground beef requires that the
weighted average of all beef used in its produc-
tion be approximately 25 percent fat and 75
percent lean.

LINEAR PROGRAMMING BEEF MODEL

To address the question of what will happen
when cow, bull, and other nonfed beef slaugh-
ter declines by 25 to 30 percent, the authors
first examine the proposed alternative of di-
verting more beef from the block beef trade. To
evaluate this proposal one can represent, in a
simplified form, the beef market for a given
time period by a linear programming model as
shown in Figure 1. The model in Figure 1 is as-
sumed to represent the beef market at the pro-
cessor-wholesaler level. The model allows beef
to be sold in six product categories: ground
beef, which must be 25 percent fat and 75 per-
cent lean; beef loin, rib, round, and chuck
primais, which must be obtained from fed beef
carcasses; and beef trim, which can be sold for
a minimal salvage price if not used to produce
ground beef. Possible sources of meat for
ground beef include the loin, rib, round, and
chuck primais, beef trim from the fed beef car-
casses, imported deboned beef, and domestic
manufacturing (deboned) beef.

In representing the current processor-whole-
saler beef market, the authors assumed, be-
cause of the current consumption levels, that
ground beef sales would represent no more
than 45 percent of the total beef sales (limited
in this model to 1000 lbs. of deboned equiva-
lent beef). Domestic manufacturing and other
nonfed beef currently accounts for 52 percent
of the total source of ground beef and imported
beef accounts for 13 percent. Thus, domestic
manufacturing beef was initially limited to 234
lbs. (.52 x .45 x 1,000) and imported beef was
limited to 59 lbs. (.13 x .45 x 1,000).

All prices in the objective function represent

FIGURE 1. LINEAR PROGRAMMING MODEL OF CURRENT UNITED STATES PRO-
CESSOR-WHOLESALER LEVEL BEEF MARKET.

Activities

⁴The authors recognize that products included in the category “ground beef’ vary significantly in the percentage of fat and lean beef used in their production. A 25
percent fat content, however, is an approximate mean and mode of these products.

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