Economic Implications of Show List, Pen Level, and Individual Animal Pricing of Fed Cattle

Fed cattle are currently sold on a show list (several pens of market ready cattle), pen by pen, or individual head basis and may be priced using live weight, dressed weight, or grid or formula pricing. Analysis of 85 pens, 5520 head, of fed cattle revealed that marketing level, i.e., show list, pen, or individual, had only limited impact on the variability of revenue on a pen average basis. Moving from live weight to dressed weight pricing did slightly increase the variability of pen average revenue. Revenue variability on an individual head basis increased with grid pricing. In explaining revenue variability, weight explained the majority of the variation in revenue. Marbling difference may account for about 25 percent of the variation, depending upon time period and grid. Fat thickness and ribeye area accounted for less than three percent of the variation in revenue.