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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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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