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Abstract

Price spreads between retail and wholesale markets for beef and pork have shown several distinct increases over the past decade. Both consumers and producers have felt the "middleman" receives too large a share of the consumer's meat dollar. But little has been said concerning the longrun effects of the amount and form of the margin on production and prices. Three sets of alternative margin plans are examined by simulation. One compares the effects of a change in the form of the margin, from fixed to percentage. The two other plans involve changing the levels of the fixed and percentage margins. For each of these margin strategies, prices and production of beef and pork and the size of the domestic beef herd are compared with expected results under the current practices (the base projection) through 1985.

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