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In modelling retail meat demand and supply equations it is difficult to identify close substitutes or competing products. However, close substitutes can be identified through a comparison of meat attributes, especially cooking method and sensory attributes. The Meat Standards Australia (MSA) grading system can be used to identify primals (whole muscles) with similar attributes. The MSA system is based on carcase attributes, cooking methods and sensory properties and it allocates 3, 4 or 5 stars to beef primals. Prices for different star grades are affected by the quantity of meat allocated into each grade and this is determined by cooking method, which is dependent upon season. Estimating demand and supply by MSA grades and cooking methods requires fewer variables and therefore reduces multicollinearity and increases model efficiency.

Identification of substitute groups for retail beef demand and supply equations