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Market Valuation of Preconditioning Feeder Calves

Author

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  • Avent, R. Keith
  • Ward, Clement E.
  • Lalman, David L.

Abstract

Preconditioning calf programs, while not new, are becoming more prevalent. They provide benefits to cow-calf producers while adding value for feeder cattle buyers. However, questions remain regarding the economic costs and returns of such programs. A model was estimated with data from three consecutive-day sales, to determine the value that buyers place on preconditioning programs and related feeder cattle traits. Our results indicate that price premiums, although evident, appear to be insufficient by themselves to cover the marginal costs of preconditioning.

Suggested Citation

  • 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(1), pages 1-11, April.
    • Handle: RePEc:ags:joaaec:42894
    DOI: 10.22004/ag.econ.42894
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    References listed on IDEAS

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    1. Langemeier, Michael R. & Schroeder, Ted C. & Mintert, James R., 1992. "Determinants Of Cattle Finishing Profitability," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 24(2), pages 1-7, December.
    2. McDonald, R. Allen & Schroeder, Ted C., 2003. "Fed Cattle Profit Determinants Under Grid Pricing," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 35(1), pages 1-10, April.
    3. Steven C. Turner & John McKissick & Nancy S. Dykes, 1993. "Reputation Selling in Feeder Cattle Teleauctions," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 15(1), pages 9-19.
    4. Steven T. Buccola, 1980. "An Approach to the Analysis of Feeder Cattle Price Differentials," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 574-580.
    5. Jan Chvosta & Randal R. Rucker & Myles J. Watts, 2001. "Transaction Costs and Cattle Marketing: The Information Content of Seller-Provided Presale Data at Bull Auctions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 286-301.
    6. John M. Marsh, 1985. "Monthly Price Premiums and Discounts between Steer Calves and Yearlings," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(2), pages 307-314.
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    Citations

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    Cited by:

    1. Vestal, Mallory K. & Ward, Clement E. & Doye, Damona G. & Lalman, David L., 2006. "Beef Cattle Production and Management Practices and Implications for Educators," 2006 Annual meeting, July 23-26, Long Beach, CA 21426, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. 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.
    3. 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), pages 1-15, April.
    4. repec:ags:jrapmc:122309 is not listed on IDEAS
    5. Elliott, Lisa M. & Parcell, Joe L. & Patterson, David J., 2013. "Determination of the Value of Minimum Sire Accuracy Traits," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 45(2), pages 259-275, May.
    6. repec:ags:joaaec:163228 is not listed on IDEAS
    7. Doye, Damona & Popp, Michael & West, Chuck, 2008. "Controlled versus Continuous Calving Seasons in the South: What’s at Stake?," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2008, pages 1-14.
    8. 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), pages 1-14, April.
    9. 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.
    10. Fantu Bachewe & Derek Headey & Bart Minten, 2023. "Price predictors in an extended hedonic regression framework: An application to wholesale cattle markets in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 54(2), pages 289-306, March.
    11. Andreas Tsakiridis & Michael Wallace & James Breen & Cathal O'Donoghue & Kevin Hanrahan, 2021. "Beef quality assurance schemes: Can they improve farm economic performance?," Agribusiness, John Wiley & Sons, Ltd., vol. 37(3), pages 451-471, July.
    12. Schumacher, Stephanie & Peel, Derrell S. & Raper, Kellie Curry, 2013. "Non-Adoption of Best Management Practices: Demographics and Adoption Constraints of Oklahoma Cattle Producers," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143094, Southern Agricultural Economics Association.
    13. Lanfranco, Bruno A. & Castano, Jose Pedro, 2010. "Incidence of Agro-Climate Variability over Grass-Fed Cattle Markets," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61182, Agricultural and Applied Economics Association.
    14. 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, Cambridge University Press, vol. 39(3), pages 625-640, December.
    15. Schumacher, Tucker & Schroeder, Ted C. & Tonsor, Glynn T., 2012. "Willingness-to-Pay for Calf Health Programs and Certification Agents," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 44(2), pages 191-202, May.
    16. 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.
    17. Johnson, Myriah, 2008. "The Profitability of Preconditioning Calves in Oklahoma Over 10 Years," SS-AAEA Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 2008, pages 1-13.
    18. Blank, Steven C. & Saitone, Tina L. & Sexton, Richard J., 2014. "Seller-Offered Forward Contracts: An Additional Benefit to Cattle Producers from Satellite Video Auctions," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162323, Southern Agricultural Economics Association.
    19. 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.

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