Analysis of the Physical and Market Factors Influencing the Relationship Between Slaughter Cattle Weight and Price: An Application of Experimental Economics

The relationship between slaughter cattle weight and price is generally understood in the cattle industry but has not been rigorously studied. The primary reason this relationship has not been studied is a lack of detailed data regarding slaughter weight and associated ices received. Spot market price data for beef slaughter cattle are reported in terms of the average price received over at least a 100 pound weight range. Monthly average prices and average slaughter weights are reported, but this type of time series does not provide the proper basis to examine the critical question producers have regarding the slaughter weight/price relationship. That question is, "What can be expected to happen to price as slaughter cattle are held to heavier and heavier weights?” To answer this question both cross section and time series data are needed on individual pens of cattle sold at various eights. A precise answer to and question and an understanding of what causes price received to change with slaughter weight is critical-marketing decisions.