A Theoretical Analysis of the "Grid Pricing" Structure of the Beef Carcass Market

Michelle Beshear and James Trapp

No 285684, 1981-1999 Conference Archive from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: Carcass prices for varying yield and quality grades of fed cattle were estimated using five years of USDA reported prices for wholesale meat cuts. The estimated carcass prices were analyzed to determine seasonal patterns. Additionally, two samples of individual animal data were obtained to compare grid pricing to live weight pricing. The results show that beef carcass prices do exhibit a seasonal pattern. The seasonal patterns for both choice and select carcass prices follow the seasonal pattern of live fed steer prices. The level of pricing difference between animal values yielded on a live weight pricing system versus a grid pricing system is determined by three key factors identified in the study. Those factors are: quality of the animals in the pen in terms of both yield and quality grade, the time of year, and the contemporary cash market.

Keywords: Marketing (search for similar items in EconPapers)
Date: 1997-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nc8191:285684

DOI: 10.22004/ag.econ.285684

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