Date Available

4-5-2012

Year of Publication

2011

Degree Name

Doctor of Philosophy (PhD)

Document Type

Doctoral Dissertation

College

Agriculture

Department/School/Program

Agricultural Economics

First Advisor

Dr. Leigh J. Maynard

Abstract

Traditional factors known to affect feeder cattle prices, such as corn prices, have been questioned recently given the volatile nature of agricultural markets and some recent research findings. This work utilizes two very current and unique datasets to examine feeder cattle pricing relationships from Kentucky internet auctions and Certified Preconditioned for Health (CPH) sales. In addition to examining traditional pricing factors, factors that affect feeder cattle basis were also examined. Basis questions are of great interest in the southeast as transportation costs to major cattle feeding areas have been impacted by rising fuel prices and increased market volatility. Finally, price premiums were examined for cattle selling as age and source verified and natural.

Results suggested that traditional factors were still found to influence feeder cattle prices, with some evidence that the magnitude of these effects may be smaller. Basis factors were found to be relevant; specifically fuel price was found to have a negative effect on basis in internet sales. This finding was also consistent with weaker basis in areas further away from the Midwest. Finally, premiums for age and source verification were moderate, roughly $11 per head for age and source verified calves, $17 per head for natural calves, and about $32 per head for cattle with both attributes.

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