The purpose of this paper is to reveal the actual condition of the linked price system and the grading price system through the survey on the actual condition to obviate the irrationality of the beef price formation and thereby to understand the probl...
The purpose of this paper is to reveal the actual condition of the linked price system and the grading price system through the survey on the actual condition to obviate the irrationality of the beef price formation and thereby to understand the problems and present reasonable price system.
1. It appears that the breeding size of cattle in Korea is still small but the scale is expanding increasingly. And as the role of cattle is changed, the form of the raising farm household is specialized to the fatting farm household and the breeding farm household.
2. Because the competitive structure of the retail market of beef forms the regional oligopoly, the retail price is almost hard to change.
3. The current linked price system is to determined the retail price of beef as the farm price and the wholesale price change, but the problems appear as follows.
a) It causes price formation to confuse because the farm price and the wholesale price don't have any mutual automatic linkage with the retail price.
b) The carcass price of wholesale market shows wide gap according to the quality and breed of beef. But the boneless price of retail market is unified price.
c) There exists the time lag between the change of the wholesale price and the change of the retail price.
4. The butcher shops practicing the grading price system are imposing higher price on special grade beef and superior beef. But the inferior beef below middle grade beef is not sold at lower price but sold at the same price that of the middle grade beef, so it shows irrelevance of the grading price system.
5. The gravity of custom transaction of the butcher's that investigated is considerably high.
6. The degree of preference for sirloin which has a small portion of beef is revealed so high that the effectiveness of the grading price system is decreasing and the butchers may any probable excessive profit.
7. Whether the butchers are practicing the grading price system or not depends on the consumer's responses.
Under these circumstances which the consumer doesn't understand fully the grading price system and the irrationality of marketing structure is existent, it must satisfy prerequisite as follows.
a) The strengthening of competitive structure of the butcher's and the transformation to synthesis food store.
b) The standard establishment and magnification of the grading system.
c) The magnification and settlement of the selling business of packaging beef.
d) The government must strengthen the consumer's understanding concerning the grading system by the publicity through mass media, consumer education etc.