California Agriculture

We analyzed video auction sales in the western United States from 1997 to 2003, in an attempt to answer two long-standing questions about the economics of cattle ranching in California. First, as expected, ranchers received lower prices for cattle sold here compared to prices received by ranchers in the Midwest; this is due to the cost of transporting cattle to Midwestern feedlots. Second, some (but not all) “value-adding” production and marketing practices — such as preconditioning, Quality Assurance Programs and natural beef production — did raise prices received by ranchers. We report on the average location discounts and quality premiums for several market regions.