Agricultural Economics Department


Date of this Version



Published in Cornhusker Economics, 08/31/2005. Produced by the Cooperative Extension, Institute of Agriculture and Natural Resources, Department of Agricultural Economics, University of Nebraska–Lincoln.


Traditionally cattle have been purchased for cash prices on the open market, at livestock auctions or directly from cattle producers. Cattle buyers from meatpackers negotiate with feedlot operators to purchase pens of cattle, attempting to estimate the average quality that the cattle will yield on the spot. Feedlot operators consider bids from competing packers and then decide which offer to accept. Cattle are delivered seven days from the date of the purchase.