Calf and yearling prices in California and the western United States

Abstract

This paper investigates spatial, quality and temporal factors impacting the pricing of calves and yearlings in the western United States using data from a satellite video auction and a hedonic regression framework. Results suggest that spatial price discounts received by western ranchers closely match reported shipping costs and, thus, are consistent with free-on-board pricing and competitive procurement. This study also identifies the presence of temporal price premiums, on average, for seller-offered forward contracts at video auctions. With respect to quality attributes, this study provides estimates of the marginal value associated with various quality attributes and management practices, including vaccination protocols, weaning, certified Angus beef candidates, and age and source verification. Finally, we show that the considerable year-to-year variability in estimated valuations for value-added attributes in hedonic regression models of cattle pricing can be linked to the stage of the cattle cycle, with premiums paid by buyers being attenuated when cattle inventories are high.