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Issues to Consider When Selling Cattle on a Grid or Formula

Summary

Recently there has been a much greater emphasis on improving the quality and consistency of beef. Cattle producers, breed associations, feed suppliers and beef packers have initiated value based pricing methods. Grid pricing, formula pricing, and strategic alliances are examples of these new value based pricing methods. While these pricing methods may differ substantially in the carcass and management traits they seek to reward or penalize, they all have one common feature: price is established on each individual animal.