Rat tail syndrome occurs when an animal with at least one black gene is mated to an animal with at least one dilution gene. If both the black gene AND the dilution gene are passed on to the calf, the calf MAY end up being a rat tail. It doesn't happen every time, in fact it's pretty rare, but the ONLY way a rat tail can occur is if the calf ends up with BOTH a black gene and a dilution gene.
Jeanne: I don't think your statement that a homozygous black animal can't produce a rat tail is correct. It's my understanding that if that black animal is crossed with one that carries the dilution gene, then the calf could be a rat tail. Yes, the calf would be heterozygous black, but it could get that black gene from either a homozygous or heterozygous black parent. Same with the dilution gene. As long as the calf has one black gene and one dilution gene it could be a rat tail, but it doesn't matter whether the parents were homozygous or heterozygous for either the black or the dilution gene. It only matters whether that gene is passed on to the calf.
mnmtranching: Rat tails have nothing to do with some continental breeds turning black. They were around in Europe long before these breeds turned black, and long before continentals were introduced into the United States. Charolais, some Simmentals, and some Gelbvieh carry the dilution gene. When these breeds were introduced in large numbers into the US, and were crossed with Angus or Holstein, that's when rat tails started popping up more often. The genes for producing rat tails were always present, but it wasn't until these genes were crossed in large numbers that rat tails became a problem. If you cross light red Simmentals or light red Gelbviehs with Angus you might get rat tails because these breeds can carry the dilution gene, and being light red, they probably do. If they are dark red, or black, they probably don't. If you cross red Limousin or Salers with Angus you won't get rat tails because these breeds don't carry the dilution gene. In other words, it's not the fact that these are continental breeds that causes rat tails, or that some breeds have turned black. It's whether they carry the dilution gene or not that matters.
You made reference to buying bulls that might carry the dilution gene. Obviously, a person that has black cows might not want to use a bull that carries the dilution gene because rat tails could occur. A good breeder should know whether his bulls might carry that gene and will be honest about it. As for using a black bull on crossbred cows, rat tails might pop up if the dilution gene is present in the cowherd, but that dilution gene would have to come from the cow, not the bull. Black bulls do not have the dilution gene, no matter what breed they are. If they did, they'd be gray.
As for whether rat tails are inferior to normal calves, that's debatable. Most research I've seen shows that rat tails are equal to normal calves, except for the hair and tail. Obviously, because of the sparse coat, rat tails won't perform as well in the cold as would animals with a normal coat. So a buyer wouldn't want to buy rat tails if he's going to ship them to a feedlot where the winters are harsh. If they're going to a feedlot in a warm weather area, they should be fine, but they're going to be discounted either way.