Monthly Price Premiums and Discounts between Steer Calves and Yearlings

Distributed lags are used to estimate monthly prices and price premiums and discounts between steer calves and steer yearlings. The statistical results show that premiums and discounts are not highly seasonal but are affected by expected changes in fed slaughter prices and cost of gain in the feedlot. The effects of these variables are sensitive to time, thus the latter should be taken into account for future marketing decisions. Also, price flexibility coefficients indicate that profitability risk in cattle finishing is shifted more to price-weight differences of cattle placed on feed than to changes in the individual prices themselves.