Establishing a Market Value

The U.S. pork producer formerly marketed livestock on a live-weight basis, a concept that has all but vanished as packers shift to utilization of carcass merit pricing grids to establish an animal's monetary value. Currently, vast arrays of electronic grading equipment are at the disposal of the packer. These pieces of electronic carcass-grading equipment are capable of objectively measuring fat and muscle depth and predicting yield estimates for bone-in, closely trimmed retail cuts of the ham, loin, picnic shoulder, and Boston butt. Examples of carcass-grading equipment include but are not limited to the: 1) Fat-O-Meater (SFK; Peosta, IA); 2) UltraFOM 300 (SFK; Peosta, IA); 3) AutoFOM (SFK; Peosta, IA); 4) CVT1 with a 5049 transducer (Animal Ultrasound Services; Ithaca, NY); 5) CVT2 with a 5011 transducer (Animal Ultrasound Services; Ithaca, NY); and 6) Hennessy Optical Grading Probe (Hennessy; Auckland, NZ).

On April 2, 2001, the USDA Agriculture Marketing Service established the Livestock Mandatory Price Reporting System to ensure that market data be reported in an accurate and timely fashion to the public. The USDA Carlot report provides daily price information for various pork primal and subprimal cuts at different levels of bonein or boneless status and various external fat-trim levels. Given that different pork-packing plants employ dissimilar cutting strategies and different electronic grading equipment, the USDA and Agriculture Marketing Service are continuously working on a statistically based method of standardizing data from specified pork carcass assessment equipment at a common end point, facilitating the consistent reporting of pork-pricing data.

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