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Determinants of Price Differentials in Oklahoma Value-Added Feeder Cattle Auctions

Author

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  • Williams, Galen S.
  • Raper, Kellie Curry
  • DeVuyst, Eric A.
  • Peel, Derrell S.
  • McKinney, Doug

Abstract

Many value-added practices cannot be observed by feeder cattle buyers. Third-party verification can decrease market inefficiency associated with this asymmetric information. We evaluate the effectiveness of a verification program, the Oklahoma Quality Beef Network, in increasing received prices. We estimate the value of verification, weaning, vaccinating, certification and phenotypic traits of feeder cattle at Oklahoma auctions. Results indicate that the OQBN program adds $2.39 to $5.74/cwt. Vaccinating calves adds $1.44/cwt, and weaning calves adds $2.05/cwt. Differential values for lot size, average weight, hide color, frame size, conditioning, Brahman influence, gender and other characteristics are also reported.

Suggested Citation

  • Williams, Galen S. & Raper, Kellie Curry & DeVuyst, Eric A. & Peel, Derrell S. & McKinney, Doug, 2012. "Determinants of Price Differentials in Oklahoma Value-Added Feeder Cattle Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(1), April.
  • Handle: RePEc:ags:jlaare:122309
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    File URL: http://purl.umn.edu/122309
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    References listed on IDEAS

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    1. Williams, Brian R. & Raper, Kellie Curry & DeVuyst, Eric A. & Peel, Derrell S. & Lalman, David L. & Richards, Chris & Doye, Damona G., 2012. "Demographic Factors Affecting the Adoption of Multiple Value-Added Practices by Oklahoma Cow-Calf Producers," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119743, Southern Agricultural Economics Association.
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    3. Avent, R. Keith & Ward, Clement E. & Lalman, David L., 2004. "Market Valuation of Preconditioning Feeder Calves," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(01), April.
    4. Bulut, Harun & Lawrence, John, 2007. "The Value of Third-Party Certification of Preconditioning Claims at Iowa Feeder Cattle Auctions," ISU General Staff Papers 200701010800001482, Iowa State University, Department of Economics.
    5. DeeVon Bailey & Monte C. Peterson & B. Wade Brorsen, 1991. "A Comparison of Video Cattle Auction and Regional Market Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 465-475.
    6. Avent, R. Keith & Ward, Clement E. & Lalman, David L., 2004. "Market Valuation of Preconditioning Feeder Calves," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 36(01), pages 173-183, April.
    7. Bulut, Harun & Lawrence, John D., 2007. "The Value of Third-Party Certification of Preconditioning Claims at Iowa Feeder Cattle Auctions," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 39(03), December.
    8. McCluskey, Jill J., 2000. "A Game Theoretic Approach To Organic Foods: An Analysis Of Asymmetric Information And Policy," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 29(1), April.
    9. Kalyn T. Coatney & Dale J. Menkhaus & John D. Schmitz, 1996. "Feeder Cattle Price Determinants: An Hedonic System of Equations Approach," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 18(2), pages 193-211.
    10. Dhuyvetter, Kevin C., 2004. "Preconditioning Beef Calves: Are Expected Premiums Sufficient To Justify The Practice?," 2004 Annual Meeting, June 30-July 2, 2004, Honolulu, Hawaii 36196, Western Agricultural Economics Association.
    11. Schroeder, Ted C. & Mintert, James R. & Brazle, Frank & Grunewald, Orlen C., 1988. "Factors Affecting Feeder Cattle Price Differentials," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 13(01), July.
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    Citations

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    Cited by:

    1. Williams, Brian R. & DeVuyst, Eric A. & Peel, Derrell S. & Raper, Kellie Curry, 2014. "The Likelihood of Positive Returns from Value-Added Calf Management Practices," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(01), February.
    2. Thompson, Nathanael M. & Brorsen, B. Wade & DeVuyst, Eric A. & Lusk, Jayson L., 2016. "Random Sampling of Beef Cattle for Genetic Testing: Optimal Sample Size Determination," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229195, Southern Agricultural Economics Association.
    3. Burdine, Kenneth H. & Maynard, Leigh J. & Halich, Greg, "undated". "Factors Affecting Feeder Cattle Prices in the Southeast," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142976, Southern Agricultural Economics Association.
    4. Russell, Levi A. & Anderson, David P. & Bochat, Matthew T. & Yanta, Brian D. & Paschal, Joe C. & Young, Alan, 2014. "Effects of Brahman Influence on Breeding Female Prices in South Texas," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 191036, Southern Agricultural Economics Association.
    5. Blank, Steven C. & Saitone, Tina L. & Sexton, Richard J., 2016. "Calf and Yearling Prices in the Western United States: Spatial, Quality, and Temporal Factors in Satellite Video Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), September.
    6. Schulz, Lee L. & Dhuyvetter, Kevin C. & Doran, Beth, 2014. "Factors Affecting Preconditioned Calf Price Differentials: How much do Market and Sale Conditions Matter?," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170570, Agricultural and Applied Economics Association.
    7. Schulz, Lee L. & Dhuyvetter, Kevin C. & Doran, Beth E., 2015. "Factors Affecting Preconditioned Calf Price Premiums: Does Potential Buyer Competition and Seller Reputation Matter?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(2), May.
    8. Williams, Brian R. & DeVuyst, Eric A. & Peel, Derrell S. & Raper, Kellie Curry, 2014. "Reducing Self-Selection Bias in Feeder Cattle Premium Estimates Using Matched Sampling," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 39(1), April.
    9. Lopez, Jose & Bankole, Taiwo & Wahrmund, Jackie, 2017. "A Hedonic Analysis of Feeder Cattle Auction Prices in Northeast Texas," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252732, Southern Agricultural Economics Association.
    10. Mitchell, James & Peel, Derrell S., 2016. "Price Determinants of Bred Cows in Oklahoma Auctions," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230077, Southern Agricultural Economics Association.
    11. Riley, John Michael & Williams, Brian R., 2013. "Cow-Calf Industry Expansion on the Horizon? Market Signals vs. Outside Factors," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143044, Southern Agricultural Economics Association.
    12. Mallory, Shannon & DeVuyst, Eric A. & Raper, Kellie C. & Peel, Derrell & Mourer, Gant, 2016. "Effect of Location Variables on Feeder Calf Basis at Oklahoma Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), September.
    13. repec:ags:joaaec:163228 is not listed on IDEAS

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