SOUTHERN JOURNAL OF AGRICULTURAL ECONOMICS
JULY, 1974
A NEW LOOK AT BEEF CATTLE PRICE REPORTING CLASSIFICATIONS
Donald C. Huffman and Alvin R. Schupp
Beef production has become a series of highly
specialized enterprises, consistent with technological
and temporal developments throughout
agriculture.Technological developments in forage and
grain production, feed processing, feedlots, and
transportation systems have helped physically
transform the beef production industry and altered
the flow patterns of beef cattle and carcass beef
throughout the United States. A weanling calf
produced in Virginia may be hauled to southern
Georgia or Louisiana to be wintered on pasture,
shipped to a Colorado feedlot for finishing,
slaughtered in Colorado and the carcass shipped to
Pennsylvania to a retail chain which services stores in
Virginia.
Improved transportation facilities also have
increased the importance of market location as a
pricing factor. Sellers, as well as buyers, are no longer
limited to one or two local markets. Market location
effects become especially important for production
planning when animals can be purchased and sold in
different markets.
Farmers with beef production operations and
those considering beef programs are confronted with
many planning and production decisions. Calves can
be sold in September at 370 pounds, in December at
450 pounds or grazed on winter forage and sold in
May at 625 pounds. These production decisions are
important to beef cattle producers with sufficient
flexibility in their farm operations to provide these
alternatives. Decisions about the type of cattle to
purchase for grazing on winter forage or for a feeding
program, whether to purchase cattle in a particular
year and when to buy and sell during the year may be
equally important decisions for the modern farmer.
Price data needed for these kinds of management
decisions must be sufficiently detailed to account for
trends, seasonal variations and the influence on price
of weight and/or type of animal.
LIMITATIONS OF PRICE INFORMATION
Cattle price reporting traditionally has
emphasized the current market situation. While useful
for current marketing decisions, price reporting
categories used in these daily or weekly reports,
which become the recorded (historical) price
information, are inadequate sources of price data for
planning beef cattle production.
Reporting classifications, such as used in the
Louisiana Livestock Market Report [1] (slaughter
calves, slaughter steers and heifers, stocker calves,
stocker steers and stocker heifers), are too broad and
ill-defined to provide price information useful for
planning. Furthermore, reporting personnel are
inconsistent in the interpretation of these
classifications. For example, a 450-pound animal may
be classified as a stocker calf in one auction market
and as a stocker steer in another. Additionally, with
the decline in calf slaughter and the number of
slaughter plants throughout the Southeast, slaughter
classifications for lightweight animals in auction
market reporting are more descriptive of the buyer
than the animal. This is characteristic of areas such as
Louisiana where most cattle under a year old are
purchased for either stocker or feedlot programs.
Recently, some market news reports, such as The
Drovers Journal [2], have included 100-pound weight
intervals in price reporting classifications. While these
Donald C. Huffman and Alvin R. Schupp are associate professors of agricultural economics and agribusiness at Louisiana State
University. The authors acknowledge the contributions of Lonnie L. Fielder and Adolfo Martinez, professor and research
assistant, respectively, who conducted the statistical analysis.
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