Factors Affecting Preconditioned Calf Price Premiums: Does Potential Buyer Competition and Seller Reputation Matter?

• Main Authors: Lee L. Schulz, Kevin C. Dhuyvetter, Beth E. Doran
• Format: Article
• Language: English
• Published: Western Agricultural Economics Association 2015-05-01
• Series: Journal of Agricultural and Resource Economics
• Subjects: feeder calves; feedlot capacity; hedonic model; preconditioning; price analysis; price differentials; seller reputation
• Online Access: https://ageconsearch.umn.edu/record/206594
• ISSN: 1068-5502; 2327-8285

Feeder-calf prices are determined by the interaction of many factors. This study uses transaction data from Iowa preconditioned and regular feeder-calf auction sales to quantify the impact of a wide variety of factors, several of which have not been used in previous studies on feeder-calf prices. Notably, market premiums for preconditioned sales versus regular sales, feedlot capacity utilization, and seller reputation are found to be significant factors affecting feeder-calf prices. Estimated coefficients are then used to predict prices to demonstrate how this information can be used in making management and marketing decisions.