Effects of increased transportation costs on spatial price differences and optimum locations of cattle feeding and slaughter

A least-cost multiproduct transshipment model is developed to evaluate the impact of changes in interregional relationships in the cattle feeding|fed-beef economy as a result of increased transportation costs. Results indicate that Southern and Central Plains and Corn Belt cattle feeders would continue to account for nearly 85% of all cattle fed in the US in the short run. Slaughter generally was shown to remain production oriented as slaughter firms locate near concentrated sources of fed slaughter cattle. Results suggest that cattle feeders in the Southern and Central Plains may be faced with less favorable competitive positions when competing with western Corn Belt feedlots if transportation costs increase more than 50% relative to other input costs. Future increases in placements of feeder cattle would likely occur to a greater degree in the Corn Belt and to a lesser extent in the South.