Big shift towards ‘formula’ pricing in US feedlot cattle

BIG changes have occurred over the past decade in the way the US beef industry sells feedlot cattle, US economist Ted Schroeder told yesterday’s Australian Meat Processor Corporation conference in Sydney. As the accompanying graph shows, so-called ‘formula’ price arrangements(green line), involving longer-term supply agreements of some kind for finished cattle sold by feedlots to packers, has grown from around 30 percent of total fed cattle sales in 2007, to around 60pc today. The discussion was one of numerous references made during the AMPC conference about the need for greater value-chain integration across the red meat industry. Prof Schroeder said…

Source: Beef Central
Big shift towards ‘formula’ pricing in US feedlot cattle