exam 1: Marketing

Question 1

what are the two types of marketing

Answer 1

public marketing
direct marketing (most common)

Question 2

main types of public markets are __________ and __________.

Answer 2

stockyards
auctions

Question 3

today, less than ___% of nations hogs are sold through public markets

Answer 3

5%

Question 4

the major disadvantage of public markets

Answer 4

markets price hogs only on a live weight basis

Question 5

direct marketing

Answer 5

when producers negotiate the sale of their own hogs

Question 6

over ______% of hogs are direct marketed

Answer 6

80%

Question 7

examples of direct marketing

Answer 7

sales to packing plants
packer-owned buying stations
order buyer
independent buying stations

Question 8

how are direct market hogs sold

Answer 8

live weight basis
carcass weight basis (more popular)

Question 9

what are the three selling types

Answer 9

live pricing
carcass weight pricing
carcass merit pricing

Question 10

live pricing

Answer 10

buyers use visual inspection to assess the value of the hog

reputation bids based on carcass traits of previous marketing

most rare, not beneficial

Question 11

advantages of live pricing

Answer 11

easy for the seller to understand

price is multiplied by the weight of the hogs to calculate value/producer knows income

Question 12

disadvantages of live pricing

Answer 12

difficult for buyers to accurately determine group of hogs value before slaughter

tendency to underprice hogs with heavy muscled, lean carcasses and overprice hogs with light muscle, fat carcasses

Question 13

carcass weight pricing is also known as

Answer 13

hot carcass weight

Question 14

carcass weight pricing

Answer 14

producers are paid based on the pigs carcass weight

under carcass weight pricing, dressing % is the most important factor

Question 15

Dressing % is affected by the

Answer 15

Amount of fill, fat, muscle, and carcass trimming

Question 16

advantages of carcass weight pricing

Answer 16

more accurate than live pricing

rewards heavy muscled, lean carcasses

Question 17

disadvantages of carcass weight pricing

Answer 17

producer assumes the risk of trimming and condemnation losses

Question 18

carcass merit pricing (lean value pricing)

Answer 18

major method for pricing hogs

also referred to as lean value pricing OR fat-free lean

Individual hog carcasses are evaluated as they pass from kill floor to the chill room in attempt to measure % lean of % fat free lean

Question 19

What are the two main factors used in the evaluation process of carcass merit pricing

Answer 19

carcass weight
amount of backfat

Question 20

_________ or _______ from a base price are computed for each carcass to determine the final value of the hog when using carcass merit pricing

Answer 20

price premiums
discounts

Question 21

advantages of carcass merit pricing

Answer 21

more accurately reflects the hog carcass than live pricing

buyers send seller a report so they can use it as a guide in management decisions like selecting breeding stock

Question 22

disadvantages of carcass merit pricing

Answer 22

Carcass measurements are taken after the producer has left so if errors are made, the seller assumes the loss

each packer uses a different technique

Question 23

procedures for estimating pork carcass composition

Answer 23

ribbed carcasses (ruler and grid)

unribbed carcasses (ruler)

Fat-o-meter

animal ultrasound system

Question 24

Carcasses measured with the animal ultrasound system

Answer 24

scans carcass to measure fat and muscle suing actual images of the LEA to determine the average loin muscle depth

• measures average fat spanning last rib to tenth rib

-no cutting required

Question 25

are animal ultrasound systems used often to measure carcasses

Answer 25

no because they are expensive but very accurate

Question 26

carcasses measured with the fat-o-meter

Answer 26

an optical probe is used to detect white fat and red/darker lean no cutting required hot carcass weight, fat depth, and loin muscle depth between 3 and 4 rib are needed

Question 27

unribbed carcasses (ruler)

Answer 27

hot carcass weight and last rib backfat thickness are combined to estimate pounds of fat free lean no cutting required

Question 28

unribbed carcasses (ruler): last rib carcass back fat thickness is determined by

Answer 28

measuring midline fat thickness, including skin, at the last rib

Question 29

ribbed carcasses (ruler and grid)

Answer 29

hot carcass weight, tenth rib fat thickness over loin, and loin muscle area at the tenth rib are measured to predict pounds of fat free lean ** not frequently used

Question 30

does using the ribbed carcasses (ruler and grid) require cutting

Answer 30

yes Loin muscle can be measured on a hanging carcass by cutting through the backbone and loin muscle between the 10th and 11th rib perpendicular to backbone

Question 31

how do packers determine carcass value

Answer 31

each carcass is evaluated and priced independently by the packer (establish own price)

Question 32

how do packers determine their base price

Answer 32

base it on: publicly reported cash market trades future market price publicly reported feed/plant averages

Question 33

are all carcasses USDA inspected?

Answer 33

yes but not normally USDA graded

Question 34

what are the two ways to determine carcass value

Answer 34

fixed premium/discount (known dollar amount) Relative premiums/discounts (percent adjustment)