Producer prices, carcass classification and consumers’ willingness to pay for different sheep meat grades: an experimental auction approach

Abstract

ABSTRACT South African sheep farmers receive different prices for animals of different age, carcass form and fat level. Older animals trade at a substantive discount to the younger animals due to the perceived tenderness and juiciness of the younger animal. There is however a question whether the size of the discount is warranted given that certain cuts from older animals are preferred by consumers for specific purposes. This paper applies an experimental auction combined with sensory tests to establish the consumers’ willingness to pay for sheep meat products from carcasses with different age categories. In this way the paper endeavours to test whether the price differentiation in the mind of the consumer (through its perceived intrinsic value) corresponds with the price differentiation at the abattoir level. Consumers’ sensory assessment results and average bid prices via the experimental auction indicated a difference in preference towards the three age classes for the stew meat, loin, and leg cuts respectively. The results validate previous results with trained panels and confirm the specific consumer preferences for specific cuts of different age categories. It was also found that the difference in the bids for different age categories was far smaller than the difference in abattoir prices for the different age categories.