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Table 3. Mean rating of factors affecting whether or not to use grid pricing, by extent of grid pricing
in 2003 (NE, CO, KS, TX, OK, NM)
Grid Pricing Groups
50% or less of More than 50% of
Factor______________________________________________________Marketings___________Marketings
|
(Mean response) | ||
|
Price and Market Conditions | ||
|
Favorable base price |
3.20 |
3.67 |
|
Upward trending market |
4.44 |
4.36 |
|
Tight supplies (fewer days of feed) |
5.20 |
5.07 |
|
Wide Choice-Select price spread |
3.61 |
3.07 |
|
Wide YG4-YG5 price spread |
4.96 |
4.50 |
|
Cattle Characteristics | ||
|
Quality grade well (percent Choice or better) |
2.76 |
2.86 |
|
Yield grade well (percent YG1-2) |
3.53 |
3.05 |
|
Dress well (high dressing percent) |
3.43 |
2.88 |
|
Cattle expected to fit a specific grid |
3.13 |
2.71 |
|
Futures Market Conditions | ||
|
Relatively stable prices* |
3.89 |
4.43 |
|
Relatively stable, predictable basis |
4.21 |
4.69 |
|
Other Factors | ||
|
Favorable expected profit margins |
4.14 |
4.12 |
|
Marketing with an agreement, contract |
4.00 |
3.56 |
|
or through an alliance or cooperative | ||
|
Favorable recent experience with |
3.38 |
2.93 |
grid pricing
* Different means at 0.10 significance, with equal variances