What is pencil shrink?

A percentage taken off the scale weight on paper before the price is applied, to stand in for the weight cattle would lose being hauled to a sale barn. Common on country, direct and video sales, usually 2 to 3%.

Is a 3% shrink the same as 3% off the price?

On the check, yes: $300/cwt with a 3% shrink pays the same as $291 with none. But to make up for a 3% shrink you need a little over 3% more on the price — $309.28, not $309 — because the percentage comes off a bigger number than it is added back to.

Why do buyers ask for a shrink?

Cattle weighed at home off feed and water are heavier than they will be by the time they are hauled and sold. The shrink evens that out so a price at home compares with a price at the barn.

Shrink and pay weight

What a pencil shrink does to the weight you're paid on, to the check, and to the price — and what you'd need to bid up to match a sale with no shrink.

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Scale weight

lb a head

Pencil shrink

%

2–3% is common on country and video sales.

Price

$/cwt

Head

The price is paid on the shrunk weight, the way a contract with a pencil shrink is written.

Pay weight

535.4 lb

a head · the shrink costs $70.08 a head

Check a head: $2,265.87
Check for the load: $135,95360 head
Shrink on the load: $4,205

$423.18 with a 3% shrink pays the same as $410.48 with none.

To match $423.18 with no shrink, you'd need $436.27 with it.

Your numbers, step by step

552 lb × (1 − 3%) = 535.4 lb pay weight; the pencil takes 16.6 lb a head.
535.4 lb × $423.18 ÷ 100 = $2,265.87 a head.
With no shrink it would be 552 × $423.18 ÷ 100 = $2,335.95, so the shrink costs $70.08 a head, and $4,205 on 60 head.
Same check on full weight: $423.18 × (1 − 3%) = $410.48/cwt.
Price needed to make the shrink cost nothing: $423.18 ÷ (1 − 3%) = $436.27/cwt — a little more than 3% on top, because the percentage is taken off a bigger number than it is added back to.

See a mistake, or a number that doesn't look right?

How this is calculated

The formulas

Pay weight: scale weight × (1 − shrink %)
Check: pay weight × price ($/cwt) ÷ 100
What the shrink costs: scale weight × price ÷ 100 − check
Same check, no shrink: price × (1 − shrink %)
Price to make up for it: price ÷ (1 − shrink %)
Not price × (1 + shrink %), which comes up short.

Where the defaults come from, and the limits

The opening price. This week's national Medium & Large 1–2 five-weight steer average from USDA Market News.
2–3% shrink. The range most often written into country and video-sale contracts. Your contract's figure is the one that counts.
Limits. Pencil shrink only. Real shrink — weight actually lost on the truck — depends on haul length, weather and how long they stood without feed and water, and isn't estimated here.

Questions people ask

What is pencil shrink?: A percentage taken off the scale weight on paper before the price is applied, to stand in for the weight cattle would lose being hauled to a sale barn. Common on country, direct and video sales, usually 2 to 3%.
Is a 3% shrink the same as 3% off the price?: On the check, yes: $300/cwt with a 3% shrink pays the same as $291 with none. But to make up for a 3% shrink you need a little over 3% more on the price — $309.28, not $309 — because the percentage comes off a bigger number than it is added back to.
Why do buyers ask for a shrink?: Cattle weighed at home off feed and water are heavier than they will be by the time they are hauled and sold. The shrink evens that out so a price at home compares with a price at the barn.

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