Determinants of Price Differentials in Oklahoma Value-Added Feeder Cattle Auctions

Many value-added practices cannot be observed by feeder cattle buyers. Third-party verification can decrease market inefficiency associated with this asymmetric information. We evaluate the effectiveness of a verification program, the Oklahoma Quality Beef Network, in increasing received prices. We estimate the value of verification, weaning, vaccinating, certification and phenotypic traits of feeder cattle at Oklahoma auctions. Results indicate that the OQBN program adds $2.39 to $5.74/cwt. Vaccinating calves adds $1.44/cwt, and weaning calves adds $2.05/cwt. Differential values for lot size, average weight, hide color, frame size, conditioning, Brahman influence, gender and other characteristics are also reported.
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Williams, Galen S.; Raper, Kellie Curry; DeVuyst, Eric A.; Peel, Derrell S.; McKinney, Doug, Determinants of Price Differentials in Oklahoma Value-Added Feeder Cattle Auctions, Journal of Agricultural and Resource Economics, Volume 37, Issue 1, April 2012, Pages 114–127

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