How does an AGEX auction work and how are cattle priced?
Prices are set in a number of ways, usually the Affiliate (perhaps with some input from the Seller) sets a starting bid along with a reserve price. AGEX does not PO cattle, but instead uses the reserve as a way to provide sellers some reasonable expectation of the outcome. The reserve also lets buyers know what it takes to get something bought without wasting their time. The reserve amount is not visible to buyers, but an auction itself will be marked as to whether or not the reserve is met. The pricing itself is based on a number of factors just like cattle have always been priced (e.g. the quality of the cattle, location/logistics, current market, current CME contract trading, weather, etc.). If an auction for some reason does not meet the reserve, the seller has the option of accepting or rejecting the leading bid within a limited timeframe.