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Short-Term Variability in Grid Prices for Fed Cattle

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  • Ward, Clement E.
  • Lee, Jong-In

Abstract

This research examined variability in grid prices that can occur within a given day or week for a given set of cattle. Data for one day's slaughter from four plants revealed considerable variation in cattle brought to slaughter by cattle feeders. Several sources of variation were found. Base prices varied $2/dressed cwt., or $15/head, whether using plant averages or formulas tied to reported cash-market prices. Prices across grids added another $2-4/cwt. of variation, another $15 to 30/head. Variation in carcass characteristics contributed significantly to the variation in grid pricing, especially discounted characteristics such as Select and Standard carcasses, Yield Grade 4-5 carcasses, light and heavy carcasses, and non-conforming or "out" carcasses.

Suggested Citation

  • Ward, Clement E. & Lee, Jong-In, 1999. "Short-Term Variability in Grid Prices for Fed Cattle," 1981-1999 Conference Archive 285757, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    • Handle: RePEc:ags:nc8191:285757
    DOI: 10.22004/ag.econ.285757
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    File URL: https://ageconsearch.umn.edu/record/285757/files/confp5-99.pdf
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    References listed on IDEAS

    as
    1. Dillon M. Feuz & Scott W. Fausti & John J. Wagner, 1993. "Analysis of the efficiency of four marketing methods for slaughter cattle," Agribusiness, John Wiley & Sons, Ltd., vol. 9(5), pages 453-463.
    2. Ward, Clement E. & Feuz, Dillon M. & Schroeder, Ted C., 1999. "Formula Pricing and Grid Pricing Fed Cattle: Implications for Price Discovery and Variability," Staff Papers 232528, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
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