Mandatory Livestock Price Reporting, Market Transparency and Grid Price Dispersion

Mandatory livestock price reporting (MPR) was implemented in April 2001. Empirical evidence indicates a significant change in the weekly variability of publicly reported fed cattle grid premiums and discounts occurred after MPR implementation. We evaluated the effect of increased market transparency resulting from implementation of MPR on grid premium and discount dispersion lelvels. Empirical results suggest that increased trransparency is compatible with either an increase or a decrease in dispersion. These results suggest that during the pre-MPR periods, the weekly premium and discount point estimators were derived from a non-representative sample.