Factors affecting price differences of slaughter swine in Texas

Abstract

The intent of this study was to identify the swine producing areas of the state, to determine the paths through which swine move from the producer to the packer and to estimate the effects these factors and animal characteristics have on prices paid for Texas swine. The study included a comparison of Texas prices to those prices at out of state sources from which swine are purchased and slaughtered in Texas. It was anticipated that these estimated values would be of interest to the industry in determining the time and place to market swine and to identify animal characteristics that influence prices. Regression analysis was used to estimate the level of effect that each of the selected factors had on prices. The assumption made regarding anticipated differences in Texas swine prices were: (1) animal characteristics, such as, weight, grade, and market class. (2) non-animal characteristics , such as, market location, size of shipment, season and year. It was also assumed that the price paid in a pork deficit area would be equal to the price paid in a pork surplus area plus handling and transportation charges. Data used in identifying production areas and information related to Texas supply and demand for pork were assembled through regularly published materials supplied by the Texas Department of Agriculture. Data for price comparison between Texas markets and markets in states from which swine are purchased and slaughtered in Texas were assembled from Texas and U.S. Department Livestock Market News Reports. The data used to describe the paths through which Texas swine move from the producer to the packer were tabulated from documents supplied by the U.S. Department of Agriculture. This included about 7,000 lots of swine purchased by eight Texas packets from five different market sources..