Factors Affecting Preconditioned Calf Price Premiums: Does Potential Buyer Competition and Seller Reputation Matter?

Abstract

Feeder-calf prices are determined by the interaction of many factors. This study uses transaction data from Iowa preconditioned and regular feeder-calf auction sales to quantify the impact of a wide variety of factors, several of which have not been used in previous studies on feeder-calf prices. Notably, market premiums for preconditioned sales versus regular sales, feedlot capacity utilization, and seller reputation are found to be significant factors affecting feeder-calf prices. Estimated coefficients are then used to predict prices to demonstrate how this information can be used in making management and marketing decisions.

Keywords

• feeder calves
• feedlot capacity
• hedonic model
• preconditioning
• price analysis
• price differentials
• seller reputation