If you sell cattle at auction then you don't have to worry much about setting prices. The market created when several buyers bid against each other in open competition does that for you. However, if you sell most of your cattle at private treaty you don't have this advantage, or disadvantage, as the case may be. Ask too much, and you discourage the customer, ask too little, and you short-change yourself.
Most business people figure cost of production and mark it up by a percentage.
In this situation selling price is geared to cost of production. It seems a fair and logical way to price cattle, but it probably is not. First, it means that the more efficient the breeder, the less profit made per animal. This doesn't make sense. On the other hand an inefficient producer who placed what seemed like a reasonable markup on his cattle might actually be pricing himself out of the market.