Usage Determinants of Fed Cattle Pricing Mechanisms

Matthew A. Diersen and Scott W. Fausti

No 285771, 2012 Conference, April 16-17, 2012, St. Louis, Missouri from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: Proposed cattle slaughter facilities in the upper Midwest have renewed interest among feedlot operators in the most appropriate mechanism to use when selling cattle. Buyers are also interested in the mechanisms that may have different benefits and seasonal patterns based on established behavior of other buyers in the region. In this paper we model the shares of fed cattle traded using different pricing mechanisms. The intent is to build a forecasting model of shares considering fundamental factors and seasonality. There is regional variation in the use of mechanisms. A Seemingly Unrelated Regression estimation procedure was used to analyze market shares. More variability of forward pricing and negotiated live pricing methods was explained compared to formula pricing and grid pricing methods.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2012-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:n13412:285771

DOI: 10.22004/ag.econ.285771

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