ABSTRACT
This chapter discusses several aspects of livestock prices beginning with reported prices for the world and the United States (US). Then, prices are broken down along several lines including seasonality, factors affecting prices, and pricing efficiency. The chapter also discusses the one major aspect that determines the effective price for producers: shrink and its components. In a world of instant communication, with farm prices and Wall Street quotes beamed virtually instantaneously on teletypes and over the radio, it is tempting to think in terms of one world price for cattle, hogs, and sheep. The effective (net) price to the producer is also affected by weight loss or shrink. There are three major forms: live weight shrink, tissue shrink, and "pencil shrink." The packer buyer is more concerned with tissue shrink, the loss of carcass weight. Animals sold off the farm or out of the feedlot suffer no shrink.
