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1 September 2017 Hedonic Pricing of Grass-Fed Cattle in Uruguay: Effect of Regional Resource Endowments
Bruno A. Lanfranco, José P. Castaño
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Abstract

A hedonic model of feeder and replacement cattle prices in Uruguay was specified to include both permanent agroecological factors (soil productivity and water holding capacity [WHC]) and nonpermanent factors (season, available soil moisture, and pasture conditions) as explanatory variables. Results indicate that predominant agroecological endowments (soil characteristics, water availability, and average seasonal climatic conditions) determine geographic price patterns for cattle produced under extensive production systems. In addition, weather variability and especially extreme events have an important impact on short-run cattle markets. As pasture conditions improve or precipitation increases (e.g., both soil moisture and surface runoff), livestock prices tend to fall, ceteris paribus. A cattle price gap between different regions of Uruguay based on permanent resource endowments (e.g., soil productivity and WHC) and temporary agroecological conditions exists and is illustrated using a series of iso-price maps. The hedonic price model also included various cattle characteristics and marketing conditions as explanatory variables. Grass-fed cattle in Uruguay are not a homogeneous commodity; video auction prices incorporate information about a range of agroecological factors that influence cattle production, marketing patterns, as well as perceived and actual cattle quality and performance.

© 2017 The Society for Range Management. Published by Elsevier Inc. All rights reserved.
Bruno A. Lanfranco and José P. Castaño "Hedonic Pricing of Grass-Fed Cattle in Uruguay: Effect of Regional Resource Endowments," Rangeland Ecology and Management 70(5), 549-559, (1 September 2017). https://doi.org/10.1016/j.rama.2017.04.001
Received: 23 March 2016; Accepted: 1 April 2017; Published: 1 September 2017
KEYWORDS
agroecological conditions
cattle prices
grass-fed
hedonic model
provenance
resource endowment
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