Interpretations of Price Spreads for Eggs and Poultry

Excerpts: Information on marketing margins serves a useful function in: (1) Enabling the consumer to understand where his food dollar goes, and (2) helping the producer to understand the extent of marketing charges represented in the farm-retail spread. These margins in the United States, when compared with those in other countries, show that our marketing system is highly efficient. In addition, our continuing series of margins data make it easier to spot trends, places, and times where price spreads may get out of line. When these data are compared with the findings of cost and efficiency studies, opportunities for further cost reductions may show up. The remainder of this paper will be concerned with some interpretations of concepts and variations of price spreads for eggs and poultry. Most of the emphasis will be on price spreads for eggs. I will discuss my topic in terms of: (1) The concept of price spreads, (2) the background for price spread studies in the U. S. Department of Agriculture, (3) the kind and sources of information used to determine price spreads, and (4) some price spread variations among cities.