Marketing Fed Cattle Based on Expectations of the Underlying Carcass Value Dynamics

Abstract

Fed cattle profitability is determined by complicated dynamic processes of body growth, carcass development, and seasonal prices. A structural model is constructed to contend with all these dynamic processes to predict optimal market timing. Informed simulations are conducted and compared to those observed in the data, as well as to a previous model ignoring the evolution of carcass value. The results indicate that significant improvements to profitability are attainable with the new method. The results also indicate the opportunity cost of not accounting for carcass value, even with error, is more severe than when these dynamics are ignored.

Price predictors in an extended hedonic regression framework: An application to wholesale cattle markets in Ethiopia

“…Although there is a longstanding literature using variants of hedonic price models to examine determinants of price formation or discovery in live cattle markets in the developed world, particularly the large US markets (Avent et al., 2004; Buccola, 1980; Coatney et al., 1996; Dhuyvetter et al., 1996; Fausti & Feuz, 1995; Jones et al., 1992; Mintert et al., 2016; Mitchell et al., 2018; Poss et al., 2021; Tomek, 1980; C. E. Ward et al., 1996), published literature on these issues in developing countries is extremely limited. Relative to previous studies in Ethiopia and elsewhere in developing countries, we believe this study has two important strengths.…”