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

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  • Schulz, Lee L
  • Dhuyvetter, Kevin C.
  • Doran, Beth E.

Abstract

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.

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  • Schulz, Lee L & Dhuyvetter, Kevin C. & Doran, Beth E., 2015. "Factors Affecting Preconditioned Calf Price Premiums: Does Potential Buyer Competition and Seller Reputation Matter?," ISU General Staff Papers 201505010700001051, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201505010700001051
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    1. Williams, Brian R. & DeVuyst, Eric A. & Peel, Derrell S. & Raper, Kellie Curry, 2014. "The Likelihood of Positive Returns from Value-Added Calf Management Practices," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(1), pages 1-14, February.
    2. Ward, Clement E. & Lalman, David L., 2003. "Price Premiums From A Certified Feeder Calf Preconditioning Program," 2003 Conference, April 21-22, 2003, St. Louis, Missouri 18973, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
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    6. Jones, Rodney & Turner, Tyler & Dhuyvetter, Kevin C. & Marsh, Thomas L., 2008. "Estimating the Economic Value of Specific Characteristics Associated with Angus Bulls Sold at Auction," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(1), pages 315-333, April.
    7. Kalyn T. Coatney & Dale J. Menkhaus & John D. Schmitz, 1996. "Feeder Cattle Price Determinants: An Hedonic System of Equations Approach," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 18(2), pages 193-211.
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    9. Williams, Galen S. & Raper, Kellie Curry & DeVuyst, Eric A. & Peel, Derrell S. & McKinney, Doug, 2012. "Determinants of Price Differentials in Oklahoma Value-Added Feeder Cattle Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(1), pages 1-14, April.
    10. repec:ags:jrapmc:122309 is not listed on IDEAS
    11. repec:cup:jagaec:v:40:y:2008:i:1:p:315-333_17 is not listed on IDEAS
    12. Zimmerman, Lance C. & Schroeder, Ted C. & Dhuyvetter, Kevin C. & Olson, K.C. & Stokka, Gerald L. & Seeger, Jon T. & Grotelueschen, Dale M., 2012. "The Effect of Value-Added Management on Calf Prices at Superior Livestock Auction Video Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(1), pages 1-16, April.
    13. Athanasios G. Chymis & Harvey S. James & Srinivasa Konduru & Vern L. Pierce & Robert L. Larson, 2007. "Asymmetric information in cattle auctions: the problem of revaccinations," Agricultural Economics, International Association of Agricultural Economists, vol. 36(1), pages 79-88, January.
    14. repec:ags:joaaec:163228 is not listed on IDEAS
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    Cited by:

    1. Holst, Gesa Sophie & Musshoff, Oliver & Vollmer, Elisabeth, 2018. "How does the Risk Attitude affect the Bidding Behavior of Farmers? Results of an Experimental Auction," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 67(1), March.
    2. Mallory, Shannon & DeVuyst, Eric A. & Raper, Kellie C. & Peel, Derrell & Mourer, Gant, 2016. "Effect of Location Variables on Feeder Calf Basis at Oklahoma Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-13.
    3. Andreas Tsakiridis & Michael Wallace & James Breen & Cathal O'Donoghue & Kevin Hanrahan, 2021. "Beef quality assurance schemes: Can they improve farm economic performance?," Agribusiness, John Wiley & Sons, Ltd., vol. 37(3), pages 451-471, July.
    4. Leslie J. Verteramo Chiu & Loren W. Tauer & Yrjo T. Gröhn, 2022. "Pricing efficiency in livestock auction markets: A two‐tier frontier approach," Agricultural Economics, International Association of Agricultural Economists, vol. 53(S1), pages 139-151, November.
    5. Blank, Steven C. & Saitone, Tina L. & Sexton, Richard J., 2016. "Calf and Yearling Prices in the Western United States: Spatial, Quality, and Temporal Factors in Satellite Video Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-23.
    6. Calil, Yuri Clements Daglia & Ribera, Luis A. & Anderson, David P. & Koury Filho, William, 2022. "Pure-bred Nellore Prices in Brazil: Morphological, Genetic, Physical, and Market Factors in Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(3), September.
    7. Allan F. Pinto & Brittney K. Goodrich & William Kelley & Max Runge, 2023. "Price determinants of bred heifers: Do reputations matter?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 71(1), pages 5-23, March.

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