Factors that influence the price of cattle in livestock auctions: the case of the stockyard of Melipilla (Chile)
This study aims to weigh the influence of observable traits on live cattle prices, i.e., the percent impact on the final price of various physical characteristics. These characteristics are those that commonly are published in auction catalogues, as is the case of: average lot weight, lot size, age, breed and corporal condition. In addition, the influence of seasonality and business cycles were also explored. Using the data collected from the records of El Tattersall S.A., a hedonic price function was fitted. The results showed that the most influential variables with respect to the price of beef cattle, in decreasing order, are as follows: 'condition', 'breed', 'quarter of sale' and 'year', which are followed far behind by 'lot size' and 'average weight'. The market pays a premium for Red Friesians, Crossbreds and Herefords and punishes the price of Holstein Friesians. Additionally, higher prices are paid in the last two quarters of the year than in the first two, and the third quarter is preferable to the fourth. Finally, the average lot weight and lot size are variables that have a positive, but small, influence on the price of cattle.