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Factors That Affect Feeder Cattle Prices
Production of feeder cattle requires long range planning in selecting and developing an efficient herd. It is critical in the planning process to have good estimates of the market value of different characteristics of the product of the herd. Feeder cattle are an intermediate product, and the one many ranchers depend on for their income. There are a wide variety of factors that affect the price of feeder cattle. It is clearly evident supply and demand dictates the price level of feeder cattle. In addition to supply and demand there are a number of non-animal characteristics including weather conditions, feed and grain prices, interest rates, season of the year, etc. For the purpose of this paper, we will assume supply and demand encompasses the effect on price from these non-animal characteristics, and these remain constant on a given market day. This will facilitate the evaluation of the effects of certain animal characteristics on price. A research project was developed to determine how each of the following factors, for a specific time, affect price: weight, sex, frame score, muscle score, condition (finish), degree of fill, breed composition, and age. The project was also designed to analyze the factors that correlate with today's industry as compared to the previous Texas A&M University research by James and Farris in 1971. The specific objectives of this study are: (1) To document the effect of certain animal characteristics on price. Demonstration of these effects will enable producers to consider the possibility of changing these animal characteristics so that prices received for his product will be favorably influenced. Thus, he can alter his sire selection, his breeding, and his production strategies to take full advantage of these effects. (2) To illustrate the effects of these characteristics on price based on current grade standards and market desirability of different breeds of cattle. Previous research at Texas A&M University (James and Farris, 1971) compared prices using the "old" grading standards and only considered English beef breeds and "Okies." In addition, there have been significant changes in the industry that may alter previous effects of these characteristics on price. Shifts in major cattle feeding areas may have influenced factors such as breed. Certain areas of the country have developed special markets and have a need for special types of cattle (for example, the light heifer market in south Texas.) The results of this research should aid ranchers in production and marketing decisions.
Undergraduate thesis written for [Program year: 1984/1985]
Digitized from print version held at Pickle Center High Density Storage, barcode 24829728
[University Undergraduate Fellows], sponsored by Animal Science Department.