Business / Agriculture / Value-Based Pricing: Packers are increasingly using this method of determining how much to pay cattle and hog producers for animals. Rather than simply paying a fixed rate based on the weight of the animals, value-based pricing attempts to establish the individual merits of each animal (or lot) purchased, factoring quality characteristics such as yield, fat thickness, likely grade (such as choice, select, etc.) Into a formula to arrive at the price that will be paid. Under this system, the producer assumes the financial responsibility that the animals, once slaughtered, will meet these criteria. In traditional pricing methods, it is the packer that bears the greater financial risks associated with the uncertain quality of the animals purchased.
Business / Agriculture / Multiple Component Pricing: The practice of valuing farm milk according to the value of its protein, fat, and mineral content. This practice has been adopted by many regions for federal milk marketing orders. Historically, milk MORE
Business / Finance / Pricing Efficiency: Also called external efficiency; a market characteristic that prices at all times fully reflect all available information that is relevant to the valuation of securities. MORE