Cattle Buyers’ Assessment of the Value of Seller Reputation

The poster objective is to assess market premium assigned to various levels of reputation and preconditioning by cattle buyers. The market value of seller reputation in cattle markets is discussed anecdotally as an important component of the price paid by the buyer, but has not been observable with standard market data. A positive reputation may be built over time by marketing cattle that perform well for buyers’ needs. That performance is linked to a host of things, including calf management practices and cattle genetics. Likewise, a negative reputation is possible as well. When sellers do not have an established reputation, it is possible that third-party certification of management practices at least partially substitutes for an established reputation regarding market value. This study is currently being conducted during Fall 2015 using an electronic survey administered to cattle buyers at live cattle auctions across Oklahoma to assess the contribution of seller reputation to market price for feeder cattle. The results will benefit cattle producers as the relative value of establishing a reputation or substituting third-party verification for reputation determines the incentives for adopting and/or certifying recommended management and marketing practices.