SOUTHERN JOURNAL OF AGRICULTURAL ECONOMICS DECEMBER, 1981 ECONOMIC EVALUATION OF AN ALTERNATIVE MARKETING SYSTEM FOR FEEDER CATTLE IN ALABAMA

The marketing system for cattle in the United high costs and low prices because of thin country States has evolved with shifts from delivery to auction markets, a group of livestock producers large terminal centers, to more decentralized formed a market board association in 1973. The markets. Because of innovations in transporta- objective of the market board was to supply tion and processing technology, these structural healthy, farm-fresh cattle at least cost direct to changes have created a need for greater vertical feedlots. In 1981, 6 market boards, composed of coordination between different stages in the cat- 86 producers, sold cattle valued at approximately tie marketing channels (Rhodes, p. 174; Spor- $7 million. Sales occur during April and May at leder, p. 101). Improved coordination requires locations central to each group of producers. appropriate market information about product Cattle are auctioned by lots, with producers sup-supplies and the form of cattle preferred by buy- plying a description of each lot to the buyers be-ers (Purcell, 1973, 1980). fore a sale. Buyers have the opportunity to visit a Alabama is a major supplier of stocker and farm to inspect the cattle before a sale. After the feeder cattle to feedlots in the Southwest, Mid- sale, the seller and buyer sign a sales contract west, and North Central regions of the United and agree on the form of payment and the tim