Carcass Grid Pricing
Harvested cattle prices are typically categorized into three main methods:1. **Live Price:** This method involves selling cattle at their current weight and condition.2. **Dressed Weight or “In the Beef” Price:** In this approach, cattle are sold at their dressed weight, which excludes the hide, bones, and other non-muscular tissue.3. **Carcass Grade and Yield or Grid Pricing:** This method assigns a specific grade to each carcass based on its quality and yield.
Carl D. Fredsti and Christine M. Fredsti, a cattle producer enterprise, prioritize carcass grade and yield or grid pricing as their marketing strategies. Their feeder cattle are marketed through a custom feeder feedlot to a packer.
This is achieved through placement as retained cattle with a Feedlot custom feeder program and direct sale on a hot carcass grid pricing basis to the Packer.
CARCASS GRID PRICING BASIS –
The most critical factors that influence the feeder cattle profitability includes:
- The quality and dressing percent of the produced fed cattle
- Carcass grid Choice-Select spread
- Production and feeding cost differences associated with targeting cattle to a particular price grid or packer
- Knowledge about the price/quality distribution of the cattle and ability to sort cattle to meet the criteria for a particular grid or formula
A carcass grid lists a base price for Choice (base) and assorted premiums and discounts. Grid prices, or value-based marketing, refers to pricing cattle on an individual animal basis. Prices differ according to the underlying value of the beef and by-products produced from each animal.
