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Grid Pricing For Fed Cattle: An Empirical Analysis

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  • Fausti, Scott W.
  • Qasmi, Bashir A.
  • Wittig, T.

Abstract

Weekly grid premium and discount price date for fed cattle have been collected over a 3-year period. The grid price data are combined with carcass data (2590 South Dakota slaughter steers) to investigate the variability in the average weekly carcass premium is affected by changes in packer-determined grid premiums and discounts on a weekly basis. The three-stage recursive model is then estimated using an autoregressive procedure. The results of the empirical analysis indicated that among all grid premiums and discounts, it is the choice-select discount that plays the dominant role in determining weekly changes in the average weekly carcass premium (discount).

Suggested Citation

  • Fausti, Scott W. & Qasmi, Bashir A. & Wittig, T., 2001. "Grid Pricing For Fed Cattle: An Empirical Analysis," 2001 Annual meeting, August 5-8, Chicago, IL 20615, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea01:20615
    DOI: 10.22004/ag.econ.20615
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    References listed on IDEAS

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    1. Purcell, Wayne D., 1998. "A Primer on Beef Demand," Staff Papers 232526, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
    2. Fausti, Scott W. & Feuz, Dillon M. & Wagner, John J., 1998. "Value Based Marketing For Fed Cattle: A Discussion Of The Issues," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 1(1), pages 1-18.
    3. Dillon M. Feuz & Scott W. Fausti & John J. Wagner, 1993. "Analysis of the efficiency of four marketing methods for slaughter cattle," Agribusiness, John Wiley & Sons, Ltd., vol. 9(5), pages 453-463.
    4. Scott W. Fausti & Dillon M. Feuz, 1995. "Production Uncertainty and Factor Price Disparity in the Slaughter Cattle Market: Theory and Evidence," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 533-540.
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