Selling cattle well in advance of their delivery date, or forward contracting, is a marketing option available to beef producers. Such a transaction requires the seller to estimate the weight of the cattle prior to delivery. Weights estimated at the time of sale and those recorded upon delivery often differ. Therefore, to ensure fair market value upon delivery, an adjustment of the sale price is often necessary.

The “slide” is a predetermined adjustment in the sale price of cattle and is included in the contract (forward contracting) or in the description of the cattle (video or Internet marketing) being offered for sale. It is based on the difference between the weight estimated prior to consignment or contracting and the actual pay weight. Pay weight is the actual live weight of the cattle upon delivery minus a “pencil” shrink. This pencil shrink is negotiable and normally ranges from 2 to 4 percent.

Lets use the following example:

You have a set of 65 feeder heifers that weighed 52325 lbs (average 805 lbs) delivered to the scales. The whole load was sold with a 3% pencil shrink and a 5¢ slide on weight above 725 lbs for $87.50 per cwt.

The slide actually worked to your advantage in that you were able to sell heavier calves and not have to give the extra weight away.

Here is how it worked for your calves:
slide = $5/cwt
slide weight = 725 lbs.
shrink = 3%
sale price = $87.50/cwt
delivered weight = 805 lbs

The slide will be exercised because the cattle were heavier than expected at delivery.
shrink = 805 lbs. x 3% = 24.15 or 24 lbs.
pay weight = 805 lbs. – 24 lbs. = 781 lbs.
weight subject to slide = 781 – 725 = 56 lbs.
56 lbs. = 0.56 cwt
0.56 cwt x $5/cwt = $2.80/cwt
$87.50/cwt – $2.80/cwt = $84.70/cwt

Instead of selling the calves for the base weight (725 lbs @ $87.50 = $634.38), you took less per lb (781 lbs @$84.70 = $661.50) but made $27.12 more per head.

The slide actually worked to your advantage in that you were able to sell heavier calves and not have to give the extra weight away.