Optimal Beef and Pork Marketings

A multi-equation model of the beef-and-pork sector of the economy was used to determine quarterly marketings of beef or pork that would have maximized annual gross farm income from beef and pork each year during 1950-1961. Fixing beef marketings at their actual levels, we find that pork producers could have increased their annual gross incomes an average of 45 percent if they had reduced marketings by an average of 35 percent. Fixing pork marketings at their actual levels, we find that beef producers could have increased their gross incomes an average of 25 percent by reducing marketings an average of 30 percent. Several other constrained and unconstrained maximum solutions were computed. Cross-effects were evaluated. Effects on retail prices of reductions in farm marketings and compensating variations in consumer incomes required to offset these retail-price increases were computed.