![]() Last week, Superior Livestock Auction sold 66,500 head of cattle in their Corn Belt Classic sale in South Sioux City, Nebraska. Last week gave us a good understanding of what calves and feeders in 2022 are going to be worth - or at least a starting point was established for the rest of the year to work with. For as much as we like to rely on the futures market for forecasting prices, an animal's worth isn't completely known until a hand is shook, the auctioneer cries sold, or a check is signed. Trying to gauge what feeder cattle are going to bring in the year ahead is always a gut-turning, number-racking, anxious and mindboggling venture that can take a turn for North or South without any considerable notice. The RAE is published quarterly.Even though last week's sale was just one test of the market, and thousands of cattle are still left to be sold and marketed in 2022, it's indisputable that a higher tone has set the market's precedent. The Review of Agricultural Economics is published jointly by the Southern Agricultural Economics Association, the Northeastern Agricultural and Resource Economics Association, the Western Agricultural Economics Association, and the American Agricultural Economics Association. The editors take seriously the challenge to evaluate manuscripts for publication based on readability and broad interest to all subscribers. In this regard, this publication is unique among the scholarly agricultural economics journals. Published articles are expected to be valuable to applied economists working in the public, private, and nonprofit sectors, both domestic and international. These areas include extension education, resident instruction, applied economic and policy analysis, and decision-support analysis. The purpose of the Review of Agricultural Economics (RAE) is to provide a forum for the exchange of ideas and empirical findings among those working in various areas of agricultural economics. The system approach used in this study can reduce the confounding influences measured by estimated coefficients in a single-equation approach due to interdependencies among characteristics and resulting collinearity. An implication of the analysis is that feeder cattle sellers must account for the direct, as well as the indirect, impacts of cattle and seller-added characteristics in order to determine buyer preferences. For the seller-added characteristics and market factors, the most influential indirect price impacts occurred via weight. The most prominent estimated indirect price impacts for feeder cattle resulting from a changes in physical characteristics was through the direct impacts on the frame score and weight. Three-stage least squares was used to estimate the model. A probit model was used to generate an Inverse Mill's Ratio for each lot of cattle sold to correct for possible selectivity bias. Data used for the analysis were obtained from Superior Livestock Satellite Video Auction located in Brush, Colorado. The empirical model formulated for feeder cattle in this study includes physical characteristics, market factors, marketing techniques, seller-added characteristics, climate/environment influences, and seller characteristics along with their possible interdependencies. The recognition of the interdependence of selected feeder cattle characteristics results in both indirect and direct influences of characteristics on price. The objectives of this research were to statistically account for selected characteristic interdependencies that may be associated with the pricing decisions of feeder cattle buyers and to determine the magnitudes of direct, total indirect, and total price impacts of selected interrelated and independent factors on the overall price paid for a lot of feeder cattle. Characteristics supplied by a lot of cattle, along with outside market factors and various contractual conditions, contribute to the overall price paid for a particular lot of cattle. ![]()
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