Western Video Market provided us with anonymous information from 1,979 lots of cattle with average weights in the 500- to 625-lb. range sold in video auctions from 1997-2003.

We used data from video auctions because those sales operate much like a traditional auction but have a much larger pool of potential buyers from across the country. Thus, video auction prices are often more indicative of “national” prices than are local cash sale prices.

The cattle were sold from ranches across most Western states. Thus, the data enabled us to analyze sales made at the same time at different locations.

The analysis of price differences across locations was simplified by grouping the sales data into several market regions. The out-of-state regions (Regions 3-6) are large, covering entire states, whereas California was divided into three regions (Regions 10, 15 and 25) to enable detailed analysis of local markets.

The regions were specified to include geographical areas known to be part of common “cattle sheds” — areas from which pooling of cattle occurs during the marketing/production processes. For example, Region 20 covers western Oregon, the extreme northwest corner of Nevada and the extreme northeast corner of California.

Other information available for each of the lots included animal characteristics, such as breed, and details about each sales contract. Using advanced statistical methods enabled us to estimate the effects on the sales price of not only location, but also many other variables that commonly influence cattle prices.

After converting the results into terms showing the differences between average prices in market Region 6 and elsewhere in the Midwest we get the discounts shown in Figure 1.

We acknowledge and appreciate the contributions Shasta Livestock and Western Video Market made to this research.