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Grader Bias In Cattle Markets? Evidence From Iowa

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  • Hueth, Brent
  • Lawrence, John D.
  • Marcoul, Philippe

Abstract

Participants in U.S. markets for live cattle increasingly rely on federal grading standards to price slaughtered animals. This change is due to the growing prominence of grid pricing mechanisms that specify explicit premiums and discounts contingent on an animal's graded quality class. Although there have been recent changes in the way cattle are priced, the technology for sorting animals into quality classes has changed very little: human graders visually inspect each slaughtered carcass and call a quality and yieldgrade in a matter of seconds as the carcass passes on a moving trolley. There is anecdotal evidence of systematic bias in these called grades across time and regions within U.S. markets, and this paper empirically examines whether such claim is supported in a sample of loads delivered to three different Iowa packing plants during the years 2000-02.

Suggested Citation

  • Hueth, Brent & Lawrence, John D. & Marcoul, Philippe, 2004. "Grader Bias In Cattle Markets? Evidence From Iowa," Hebrew University of Jerusalem Archive 18474, Hebrew University of Jerusalem.
    • Handle: RePEc:ags:hebarc:18474
    DOI: 10.22004/ag.econ.18474
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    References listed on IDEAS

    as
    1. 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(01), pages 1-10, April.
    2. Whitley, John E., 2002. "The political economy of quality measurement: a case study of the USA slaughter cattle market," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(4), pages 1-24.
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