By Kenny Burdine, University of Kentucky
Everyone who buys or sells feeder cattle regularly understands that in most markets the price per pound decreases as cattle get heavier. This can create a challenge for pricing cattle in situations where weight is not known with certainty. This applies to forward contracts, internet sales and cattle that are sold off the farm but are hauled to another location to determine pay weight. In these situations, cattle are often sold with a base weight, and a price slide is utilized to adjust price as the weight of the cattle exceeds that base weight.
As an…
