Price determinants of a graded feeder cattle sale

Abstract

Objective: The objective of this study was to deter- mine how numerous factors, including USDA muscle score, affect auction sale prices for feeder cattle in the US South- east. Materials and Methods: Data came from a monthly feeder cattle sale in Tennessee from 2019 to 2021, and a hedonic pricing model was estimated that considered how average lot weight, lot size, sex, breed, weaning manage- ment, and corn price influence feeder cattle price. Results and Discussion: The model shows that aver- age lot weight, total head per lot, corn price, lots with weaned cattle, sex, and breed affected the feeder cattle prices as expected based on the literature. A muscle score of 1 increased the sale price feeder cattle by US$9.51 per hundredweight relative to muscle score 2, which is a key finding of this study. Implications and Applications: This extends the lit- erature by considering the impact of USDA muscle score on feeder cattle prices for cattle in the Southeastern Unit- ed States. This paper also builds on the growing literature examining how various factors affect Southeastern feeder cattle prices. This estimation is useful to help small and medium-sized producers identify optimal management de- cisions to increase the value of their calves. Additionally, this study demonstrates to producers the added value of grades for cattle.