Marketing agreements between meatpacking and cattle feeding firms have crea
ted concerns about their effects on fed cattle prices. Profit-sharing marke
ting agreements were imposed onto a simulated fed cattle market. Price leve
l and variability differences with and without agreements, between agreemen
t participants and nonparticipants, during agreement and nonagreement perio
ds, and between participants receiving and not receiving a monetary incenti
ve were evaluated. Prices and variability for nonagreement cattle were high
er during the agreement periods. Marketing agreement participants realized
lower, less variable prices than nonparticipating firms. Monetary incentive
s did not affect price levels but increased price variability.