The term "base price" refers to the amount paid for livestock when it is delivered to a packing plant. This price is determined before any additional premiums or discounts are applied. It is typically expressed in dollars per hundred pounds of hot carcass weight, which is the weight of the animal after it has been slaughtered and processed, but before any further processing or trimming.
Base price is commonly used in the agricultural sector, particularly in the context of livestock marketing and sales. It plays a crucial role in the pricing and reporting of livestock transactions under regulations set by the Agricultural Marketing Service. This term is relevant for farmers, livestock producers, and packing plants, and it may involve various legal forms and procedures that can be managed using templates available from US Legal Forms.
Here are a couple of examples of abatement:
For instance, if a farmer delivers 1,000 pounds of livestock to a packing plant and the base price is set at $150 per hundred pounds, the farmer would receive $1,500 for the livestock before any additional premiums or discounts are applied. (hypothetical example)
Base price is defined under the Agricultural Marketing Act of 1946 and is regulated by the Agricultural Marketing Service as outlined in 7 CFR 59.30. This regulation governs the mandatory reporting of livestock prices to ensure transparency and fairness in the market.
| Term | Definition | Difference |
|---|---|---|
| Market Price | The current price at which livestock is being bought and sold in the market. | Base price is fixed at delivery, while market price can fluctuate based on demand. |
| Premium | An additional amount added to the base price for superior quality or specific attributes. | Premiums are added after the base price is established. |
If you are involved in livestock sales, understanding the base price is essential for accurate financial planning. You may want to consult with agricultural marketing professionals or use US Legal Forms to access templates that can help you document transactions properly. If your situation is complex, consider seeking legal advice to ensure compliance with relevant regulations.
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| Attribute | Details |
|---|---|
| Typical Fees | Varies by market and livestock type. |
| Jurisdiction | Federal regulations under the Agricultural Marketing Service. |
| Possible Penalties | Non-compliance with reporting regulations may result in fines. |
Base price is fixed at the time of delivery, while market price can change based on supply and demand.