Calf Breed/Color and Sale Prices

[MikeC]

In the News - July 2006
Factors affecting the selling price of feeder cattle
LITTLE ROCK – A survey of auction barns in 2005 reveals that the factors that affect the selling price of lightweight calves (less than 500 pounds) are different than the factors that play a part in the selling price of heavier cattle (greater than 550 pounds).

The survey, at 15 auction barns, was used to determine the factors that impact feeder cattle prices. It was conducted by the University of Arkansas Cooperative Extension Service and USDA's Livestock Market News to help producers understand more about calf quality and factors that affect discounts.

The survey shows that breed and color are important factors in determining the price of lightweight cattle, but as cattle weights increase, breed and color play an insignificant role in selling price. This indicates that buyers use breed and calf color to help them predict future performance, but when cattle weight increases, the buyer can see performance rather than having to predict it.

If a producer sells the breeds or breed types that are discounted as lightweight cattle, he or she would be better off keeping those cattle until they weigh over 600 pounds.

Color discounts were also noted in the survey.

For lightweight cattle, grey white-faced, red, red white-faced, white, and spotted or striped colors were discounted. As calf weight increased, only the spotted and striped cattle were discounted.

This means that if cattle producers were selling calves with these colors, they would be better off selling them when they're 650 pounds or more. At heavier weights, cattle are not discounted because of color or breed, but they may be discounted because of frame or muscle.

For all but one weight category (400 to 449 pounds), the selling price between large- and medium-framed calves across all weight groups was the same. Regardless of selling weight, small-framed cattle were heavily discounted. The selling price between large- and medium-framed calves did not differ across months.

Muscle was a major factor that affected selling price regardless of calf weight. The selling price of muscle scores 1 versus 2 calves weighing 300 to 349 pounds was $16 per hundredweight (cwt).

Also, muscle score 2 cattle were discounted from a low of $7 in June to a high of $10 in January, February, March and April. The discount between 1s and 2s was $8 to $9 in the fall. This indicates that muscle thickness is an important factor in determining the selling price of all calves.
The selling price difference (per cwt) between bulls and steers remained constant as calf weight increased.

The selling price difference between bulls and steers for 300 to 349-pound calves was $8 per cwt. The selling price difference between bulls and steers for 700 to 749-pound calves was $8 per cwt. It's thought that there is a smaller discount between light-weight bulls and steers compared to heavy-weight bulls and steers. This data doesn't support that.

The selling price between bulls and steers ranged $5 to $8 cwt across all weight groups. Even though the price per cwt remained fairly constant, the discount per head increased greatly as calf weight increased.

The discounts for bulls increased during the spring, compared to the fall. Bulls sold for $4 to 5 cwt less than steers in February and March. During the fall (September, October and November), discounts increased to $6 to $8 per cwt.

For more information about cattle production, contact your county extension agent or visit http://www.uaex.edu. The Cooperative Extension Service is part of the U of A Division of Agriculture.

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[dun]

The only question that this calls to mind is what area the data was drawn from. Only AR or nationwide?

dun

 

[CowpokeJ]

Here, in Southeast Texas, the blacks and charolais cross sell the best across the board. Providing the only difference being color.

 

[cfpinz]

The only question that this calls to mind is what area the data was drawn from. Only AR or nationwide?

dun

I'm wondering the same thing. Around here, if it's not black, it gets docked no matter what the weight. But you don't see as many heavy calves around here, most are sold as 6 weights and below. From looking at USDA reports, it seems that 7 weight steers and above are cheaper here than in areas west of here - feedlot proximity, maybe? I'd like to see every calf leave my farm at 695 lbs., personally.

cfpinz

 

[MikeC]

More info from same research:

Still Picking Cherries

By Alan Newport

Aug 1, 2006 12:00 PM


If ever there was a time cattle buyers would be forced to take what they could get, it was during the past two or three years. However, it seems the buyers didn't see it that way.


A study of 105,542 cattle passing through 15 Arkansas sale barns in 2005 shows, when the chips were down and supplies were tight, cattle buyers still did the equivalent of picking cherries and throwing out the bad apples.

"When supplies are tight and prices are high, a lot of people have the perception discounts narrow or even disappear. We found that wasn't true," says Tom Troxel, University of Arkansas Extension beef cattle specialist.

Troxel, the project's lead researcher, says a similar study of year 2000, when supplies weren't nearly as tight, showed nearly identical pricing patterns for most traits buyers esteem or eschew.

Muscle matters


Muscle thickness is a prime example, Troxel says. Cattle buyers paid an even larger premium for No.-1 muscled cattle in 2005 — $2.58/cwt. — than in 2000, when they only paid 2¢ above average. The average price was $118.32 in 2005, $92.91 in 2000.

Buyers discounted cattle with No.-2 muscling by $2/cwt. below average in 2005, and paid statistically the same discounts for No.-3 and -4 cattle as five years earlier, when there was a more bountiful supply. These trends held true regardless of calf size.

Specifically, buyers discounted No. 2s by $9/cwt. in 2000, and $8.70 in 2005. In 2000, they hit No.-3 and -4 cattle with respective discounts of $21.32 and $33.82, when compared with No.-1 cattle. Last year, they discounted No.-3 cattle by $22.62, and No.-4 cattle by $32.98.

Arkansas calf producers apparently heeded the warnings from the last study against thin-muscled cattle, plus the drubbing they were taking in the markets, and selected against them, the researchers note. Fewer light-muscled cattle passed through the markets in 2005.

Battering breeds


Breed and color, as indiscernibly linked as those traits sometimes may be, played an important role for buyers in the Arkansas sale barns. Buyers changed their preferences slightly over the past five years, but yellow-white face, yellow, black-white faced and black calves received selling prices above the 2005 average price. They discounted gray, gray-white faced, white, red-white faced, red and spotted or striped calves.

As seems common in the industry, cattle buyers leaned more toward discounts than premiums. They paid from $2.34 above the average to a discount of $10.73 below the average last year.

When breed specificity could be determined, buyers paid premiums of $4.56/cwt. to $1.91/cwt. for Hereford × Charolais, Angus × Hereford, Angus, Charolais × Limousin, Angus × Limousin, Angus × Charolais, and Hereford × Brahman × Angus cattle. They also increased the discounts on some cattle in 2005, including Longhorn, Saler and Simmental.

Like it or not, breed matters in the markets. Troxel says eight of the 23 breed crosses identified sold above average and 15 sold below. Of the 10 color patterns identified, only four sold above average.

Frame score continued to be important to buyers, but preferences changed a bit since 2000. For one, discounts on small cattle increased from an average of $18.52/cwt. to $20.96/cwt.

But buyers actually paid a 36¢ premium for medium-framed cattle in 2005, nearly $1/cwt. more than in 2000. They also decreased their premium on large-framed cattle to 52¢/cwt., about half that of 2000.

Troxel and his colleagues wonder if this further signals an industry move toward more moderate cattle, a move some say is definitely underway.

Other management issues


Cattle buyers continued hammering calf producers who don't castrate bull calves. They cut their checks by more than $6/cwt. for selling bulls compared with steers, which was a small but statistically significant increase over the $4.30/cwt. discount noted in the 2000 study.

Overfull and tanked calves also were discounted more heavily in 2005 — more than double the 2000 discounts. In addition, the small premiums of $2-$3/cwt. paid in 2000 for gaunt and shrunk calves shrank by about $1/cwt. Further, calves deemed fat or fleshy took larger hits in 2005.

Cattle buyers showed they still don't like horns, discounting horned cattle by almost $4/cwt. in 2005, compared to $1/cwt. in 2000.

Sick or lame cattle, calves with bad eyes, and calves appearing stale or with dead hair were heavily discounted in 2005 — ranging from $13 to nearly $38/cwt.

Larger group size in the ring continued to show an economic advantage, too. Buyers paid $5.32/cwt. more for groups of six or more in 2005, vs. $4.16/cwt. more in 2000.

Cow-calf producers in Arkansas showed some improvement in the five years between the studies, decreasing the number of discounted calves going through the sale barns. Yet this study shows there are still producers who need to catch up.

It's only been a few years since nearly identical studies in Oklahoma, Kansas and Tennessee found similar trends across a much larger area than Arkansas. This study suggests the industry still has work to do.

Alan Newport is a freelance agricultural writer from Carnegie, OK.