Virginia feeder cattle basis by season, location, sex, breed, weight and USDA grade differentials

Explanatory feeder cattle basis models were developed for 16 different Virginia markets by season, futures contract month, weight, lot size, sex, breed and USDA grade differentials. The models are more disaggregated and explain up to 80 percent more of feeder cattle basis variation than any previous research. Since the variables in these explanatory models are all known in advance, these basis models are also predictive. Basis estimates from these models make it possible for a Virginia feeder cattle forward pricing agency to offer forward price and minimum price contracts to small size operators.