Price-Weight Relationship for Feeder Cattle: An Updated Dairy-Beef Assessment
Feeder cattle prices depend on the weight of cattle and it is well recognized that prices per hundredweight (cwt) normally decrease as cattle weights increase. Not only do prices vary across cattle weights, but the magnitude of price differences depend on the weight of cattle. This price differential, more commonly known as a price slide, is a reflection of the costs to add weight to an animal (i.e., cost of gain). Because costs of gain ($/cwt) are generally lower than the price of cattle ($/cwt), lighter weight cattle have higher prices than heavier weight cattle and the price slide exists.
This article is published as Schulz, L.L., B.L. Boetel, and K.C. Dhuyvetter. 2018. Price–Weight Relationships for Feeder Cattle: An Updated Dairy-Beef Assessment. Western Economics Forum 16(2): 42-54. Posted with permission.