Market Study Contract Awarded to Institute

USDA on June 18 announced the Research Triangle Institute (RTI) had been awarded a $4.3 million contract to conduct an extensive study on the livestock and meat marketing complex. The goal is to complete the study by the spring of 2006.

NCBA led the charge to encourage Congress to appropriate the funding for a study of this nature.

According to the Grain Inspection Packers & Stockyards Administration, the study will: (1) identify and determine the use of emerging types of marketing arrangements; (2) determine terms of the marketing arrangements and their availability to entities of different sizes and entities in different geographic locations; (3) analyze short run relationships between captive supplies and spot and non-spot market prices; (4) determine the long run implications of the marketing arrangements on operating costs, animal and meat quality, marketing risks, prices of livestock and meat, and the structure of the livestock and meatpacking industries; and (5) determine the implications of the marketing arrangements for entry conditions, industry concentration, price discovery and thinning spot markets.

RTI, located at Research Triangle Park, North Carolina, is a non-profit independent corporation that conducts scientific research and technology development. The company specializes in bringing team approaches to research projects. A coalition of researchers has been developed by RTI to conduct the study. The coalition includes representatives from Colorado State University, Iowa State University, Kansas State University, Montana State University, North Carolina State University and the Wharton School of Business at the University of Pennsylvania.

NCBA will closely monitor the progress of this study and pass on any information as it becomes available.  USDA says the study will help Congress decide if regulations regarding captive supplies are warranted.

More information about the study can be found on USDA’s Grain Inspection Packer’s and Stockyards Administration’s Web site at www.usda.gov/gipsa.