Hedonic modeling to facilitate price reporting and fed cattle market transparency

Livestock Mandatory Price reporting, enacted to increase market transparency, has been in place for more than 20 years. However, immense structural change in cattle and beef markets has challenged market information over that time. Large variation present in cattle transaction prices, especially tho...

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Bibliographic Details
Published in:Applied economic perspectives and policy 2023-09, Vol.45 (3), p.1716-1733
Main Authors: Schroeder, Ted C., Coffey, Brian K., Tonsor, Glynn T.
Format: Article
Language:English
Subjects:
Cattle
Data collection
fed cattle
hedonic models
Livestock
market information
Modelling
Price reporting
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Summary:Livestock Mandatory Price reporting, enacted to increase market transparency, has been in place for more than 20 years. However, immense structural change in cattle and beef markets has challenged market information over that time. Large variation present in cattle transaction prices, especially those in the Formula purchases category, on any given day has made traditionally United States Department of Agriculture (USDA)‐reported weighted‐average prices less meaningful. Using nearly 6 years of The Livestock Mandatory Reporting Act of 1999 transactions data from USDA Agricultural Marketing Service (USDA AMS), we demonstrate use of hedonic modeling to facilitate price reporting. While the models show promise to provide useful information, they reveal substantial weaknesses associated with current transaction information collected by USDA from packers. We offer suggestions for improved data collection which would make hedonic modeling of transactions prices a more valuable tool to increase usefulness of reported market prices.
ISSN:2040-5790
2040-5804
DOI:10.1002/aepp.13324