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Pork Quality and the Role of Market Organization

by Stephen Martinez and Kelly Zering

Agricultural Economic Report No. (AER-835) 51 pp, November 2004

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This study addresses changes in the organization of the U.S. pork industry, most notably marketing contracts between packers and producers, by exploring their function in addressing pork quality concerns. A number of developments brought quality concerns to the forefront. These include health concerns and corresponding preferences for lean pork, growing incidence of undesirable quality attributes (e.g., pale, soft, and exudative (PSE) meat, a result of breeding for leanness), heightened concerns over food safety and related regulatory programs, and expansion into global markets. Organizational arrangements can facilitate industry efforts to address pork quality needs by reducing measuring costs, controlling quality attributes that are difficult to measure, facilitating adaptations to changing quality standards, and reducing transaction costs associated with relationship-specific investments in branding programs.

Keywords: contracts, transaction costs, measuring technology, measuring costs, pork, quality, leanness, safety, carcass pricing, vertical integration

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Last updated: Tuesday, December 11, 2012

For more information contact: Stephen Martinez and Kelly Zering

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