Factors Influencing Marketing Decisions in the Cash Market for Slaughter Cattle

A questionnaire was mailed to 225 participants of the South Dakota Retained Ownership Demonstration (Wagner, et al., 1991-95) to gather data. A probit model was used to determine which factors significantly influence the decision to market slaughter cattle dressed-weight and grade. Four factors were found to be significant: 1) the number of slaughter cattle raised, 2) whether or not the producer participates in cooperative extension programs, 3) the producer\u27s level of risk aversion, and 4 ) the age of the producer. Three hypotheses we retested: 1) A time lag between the sale of, and payment for, slaughter cattle marketed dressed-weight and grade significantly influences cash marketing decisions. 2) Producers\u27 distrust of USDA graders significantly influences cash marketing decisions for slaughter cattle. 3) Producers\u27 levels of risk aversion significantly influence cash marketing decisions for slaughter cattle. Empirical evidence supports the risk aversion explanation for the coexistence of three cash marketing alternatives for slaughter cattle. The time lag between sale and payment under dressed-weight and grade, and distrust of USDA graders were both rejected as factors explaining the coexistence of the three cash marketing methods