Estimated Value of Increased Pricing Accuracy for Fed Cattle

Posted: 9 Aug 2000

See all articles by Ted C. Schroeder

Ted C. Schroeder

Kansas State University - Department of Agricultural Economics

Jennifer L. Graff

Chicago Mercantile Exchange

Abstract

Grid pricing of fed cattle has gained popularity as one way to try to improve vertical coordination of the beef marketing system. Grid pricing eliminates much of the subsidization by producers with high quality cattle to those with low quality cattle when fed cattle are sold on an average live weight method. This study estimates this subsidy to be around $30/head. Therefore, fed cattle market efficiency can be substantially improved through the use of grid pricing systems.

JEL Classification: Q12, Q13

Suggested Citation

Schroeder, Ted C. and Graff, Jennifer L., Estimated Value of Increased Pricing Accuracy for Fed Cattle. Available at SSRN: https://ssrn.com/abstract=236855

Ted C. Schroeder (Contact Author)

Kansas State University - Department of Agricultural Economics ( email )

Manhattan, KS 66506-4001
United States
785 532-4488 (Phone)

HOME PAGE: http://www-personal.ksu.edu/~tcs/

Jennifer L. Graff

Chicago Mercantile Exchange ( email )

Chicago, IL 60606
United States
312-930-4579 (Phone)

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