daily gain, total gain, net profit, gross revenue, and annual costs per acre varied among range condition classes. Net income for low-fair range condition ($11.18 per acre) and good range condition ($11.86 per acre) were not different, but both were greater (P < 0.01) than excellent range condition ($ 9.31 per acre). Over the life of the study, real profit (adjusted for inflation) steadily increased (P < 0.01) for the low-fair and good treatments while it remained level for the excellent treatment. Neither drought nor wet springs impacted profit differently for the three treatments. These results support generally observed rancher behavior regarding range condition: to maintain their rangeland in a lower range condition than would be normally recommend by rangeland professionals. Ecosystem goods and services of increasing interest to society and associated with high range condition, such as floristic diversity, hydrologic function, and wildlife cover, come at an opportunity cost to the rancher.

The Livestock Mandatory Reporting Act (MPR) of 1999 was implemented in April 2001. Empirical evidence indicates a significant change in intra-week price dispersion associated with publicly reported fed cattle grid premiums and discounts occurring after MPR implementation.The research objective is to evaluate the effect of increased market transparency resulting from implementation of MPR, on grid intra-week premium and discount dispersion levels. Empirical results suggest that increased transparency is compatible with intra-week dispersion levels increasing. Increased dispersion suggests that during the pre-MPR period weekly premium and discount data may have been drawn from a non-representative sample. From the empirical evidence, it is concluded that reform of the livestock price-reporting system appears to have been necessary in the case of publically reported grid premiums and discounts.

Legislative authorization for the Livestock Mandatory Reporting Act of 1999 was renewed in October of 2006. One of the cited justifications for implementing mandatory reporting was that the voluntary reporting system for the slaughter cattle cash market was unable to provide accurate and timely market information. We extend the spatial market analysis literature by developing a methodology for detecting distortions in spatial relationships across related price series. Using spatially linked regional markets, we compare state-level mandatory price-reporting data to the U.S. Department of Agriculture voluntarily reported state data to determine if the spatial relationship between price-reporting mechanisms was disrupted by market distortions prior to implementation of federal mandatory price reporting. We found no empirical evidence of system failure; therefore, we conclude that market thinning or noncompetitive behavior had not reached the level necessary to disrupt the ability of the voluntary price-reporting system to provide timely and accurate price information.

This study analyzes implications of a random quality factor, vomitoxin, on spatial flows and merchandising risk. Vomitoxin poses major risks for grain traders because of contract specifications, regulatory limits, sampling difficulties, and imprecise measurement. The effect of these were analyzed using crop quality and market data for the U.S. spring wheat crop, which has been severely affected by vomitoxin infestations during the 1990s. The analysis was structured as a blending problem with the objective of maximizing the net value of wheat sales. Relationships among market price spreads and contract specifications are interesting and their effects are demonstrated through simulations. I n many grain markets, price relationships, merchandising strategies, and spatial flows are influenced by quality factors. This is caused by the diverse quality requirements of foreign and domestic end users and variation in quality characteristics across producing regions. Heterogeneity in supply and demand for characteristics is a critical feature of grain handling and merchandising. Elevators segregate grain based on quality factors and enhance margins through blending and conditioning activities. Traders assemble grain from different producing regions with different quality characteristics to satisfy needs of individual buyers and to capture price premiums.However, quality variability creates uncertainty and risk for grain merchandisers. Interest on this topic was heightened by experiences during the 1990s in the spring wheat and barley markets. Weather conditions in 1993 led to a severe

A seven-year comparative study of grid pricing versus average pricing of slaughter cattle was conducted to evaluate carcass quality market signals. The primary objectives of the study are to determine: (1) if market signals sent through the grid pricing system indicate an improvement in the grid incentive mechanism over time, (2) how changes in the grid premium and discount structure associated with carcass quality affect the market risk premium, and (3) if changes in price risk (variance) affect producer marketing decisions. An Exponential-Autoregressive-Conditional-Heteroskedasticity-in-Mean (EARCH-in-Mean) modeling procedure was adopted. Empirical results suggest that the grid premium and discount structure is slowly adjusting carcass quality market signals to encourage marketing on a grid and discourage marketing by the pen. The inclusion of the conditional variance in the empirical model indicates that variance associated with the carcass quality risk premium adds financial risk associated with the adoption of grid pricing.JEL classifications: C20, D81, Q13