Discounts vs premiums
- Thread starter Ky hills
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simme
Old Dumb Guy
Agree that the old/heritage breeds often offer superior flavor. I think the supply and demand of the marketplace have a big effect on what is produced. A whole dressed modern chicken can be purchased at the grocery store for around $7 to $8. I suspect that a fresh dressed "old' breed chicken might cost $20 or more. There are two main genetic lines of modern chickens - one suffers from woody (tough) breast and one suffers from joint issues. But the feed efficiency and cost to produce these modern chickens are so much better than those of years ago. If the major chicken or pig producers could make more money producing the old breeds, I suspect they would. But, I don't think the majority of consumers would be willing to pay the price.
The real game changer is maybe genetic engineering. Will that be acceptable for cows, chickens and pigs like it is for corn and soybeans and cotton? If a person could get the growth and yield grade of a continental with the marbling and tenderness of a Wagyu, hardiness and feet of a longhorn, fertility and efficiency, etc with a bit of genetic manipulation including adjustments for your environment - would that offer advantages? Is genetic engineering of live animals in our future?
CAB is a performance standard for carcass (visual and measured), but also a marketing program to build brand loyalty. Might be compared to makeup for the ladies. A lot of brand loyalty there sometimes and maybe a bit of "fraud" involved when the outer layer is peeled off.
The real game changer is maybe genetic engineering. Will that be acceptable for cows, chickens and pigs like it is for corn and soybeans and cotton? If a person could get the growth and yield grade of a continental with the marbling and tenderness of a Wagyu, hardiness and feet of a longhorn, fertility and efficiency, etc with a bit of genetic manipulation including adjustments for your environment - would that offer advantages? Is genetic engineering of live animals in our future?
CAB is a performance standard for carcass (visual and measured), but also a marketing program to build brand loyalty. Might be compared to makeup for the ladies. A lot of brand loyalty there sometimes and maybe a bit of "fraud" involved when the outer layer is peeled off.
Son of Butch
Well-known member
I don't understand. What do you disagree with?
The only true premium I've ever known was off the farm private sale for 10 cents per lb
live weight over local market reported top. (plus no trucking and no commission)
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Dave
Well-known member
So tell me about all the feedlots who are also Angus breeders. Or Angus breeders who are major feedlot operators. Feedlots pay more for cattle that make them more money on the average. Plain and simple. What percentage of the black hided cattle that go into the feedlots make CAB? I would bet it isn't all that high. So the bonus that those few do receive from CAB is spread over all the black hided cattle they buy. What does that work out to in dollars per calf.
Dave
Well-known member
That might be true in your neighborhood but not here. I was talking to a major buyer a couple weeks ago. He was buying a lot of calves for one client. He said that man wanted nothing but Black Angus and Charolais. Black baldies and Char crosses fit into the order.
Travlr
Well-known member
Are you saying that black cattle don't get higher prices even if they will obviously not be CAB?
It's my experience that the animals topping the market on any one day will have more difference than less high quality animals... but even solid black corriente will get better prices than corriente with color. Less spread on the cheaper cattle, but still a difference. Commercial buyers are creatures of habit just like the rest of us. They have a bias and bid accordingly. Pennies can add up.
But what I was saying is that "regardless of quality", quality being high, black hides bring more money.
Silver
Well-known member
I was giving a tour of our cattle to a buyer that buys our calves quite often when he spotted a couple of my heifer bulls which showed some Angus (red). He looked at me and said "why do you have those" and I explained I was using them on heifers. He just said "Please keep that to a minimum" or something along those lines.
It is very simple to understand. 40 years ago, Black Angus breeders starting advertising " Ask for Black angus beef, the better beef". As did other breed marketing programs. As do proponents of grass-fed, organic, cage free, non-GMO etc. So people started asking the grocery stores for Angus beef. Steak house patrons started aski9ng for it. So grocery stores started asking packers for Angus beef. Packers said " Ok, but it's gonna cost a little more" . And grocers said " Ok, we gonna charge the consumer more, but how can we be assured you are sending us angus beef? And how can our customers be sure this is angus beef." So the USDA created a program with certain criteria, that they would use to certify Angus beef. One of the 84 Angus programs in addition to CAB, is about to start using DNA, as soon as they perfect the quick and affordable DNA testing to use. At the time CAB was formed, this was not feasible. so, the very first OBVIOUS method to determine if something was Black angus would be....''DUH"... if the steer was black. Plus they added 10 other qualifications that at that time was indicative of Angus....REA, marbling etc. Certified Angus beef at Kroger today averages about $2 a pound higher than non- Angus beef. $3.79 for ground beef vs $5.79 for Angus- labled ground beef. $17 a lb for filets vs $19 a lb for certified Angus beef filets, etc. And the packers charge Kroger, or Outback or Steak& Shake $1.50 a pound more for Angus beef. They will pay the feedlots $.50 a pound more for some black calves they feel might get CAB status at inspection. Some black calves won;t, but enough will to be worth paying that $.50 a pound more. I'd say they probasbly get it right 90% of the time. Your feed lots know they can charge the packers more for black calves that MIGHT make CAB, so they pay more for them,. Buyers at the cattle sale know the feedlots will pay more for the calves that MIGHT make CAB, so they bid 20-30 cents higher on those calves. The smarter ones won't necessarily pay more for EVERY black calf.. they can tell pretty accurately which black calves the feed lots will pay more for. Again, probably get it right 90% of the time, or they will lose their jobs as buyers. Prime and choice red or white or purple cattle bring top dollar for their type, grade, condition etc. But an equivalent black calve will bring a 20-30 cent PREMIUM, in the hopes it will bring more at the feedlots, looking for calves thet can charge the packersa premium for, that will charge the end users more, that will charge the consumer the $2 a pound more for the beef. There are ignorant people on here that will say their red, white etc calves are being "docked"; or "discounted", when their red calves bring $1.75 a pound and their blacks bring $2.00. I say idiots because they SWEAR this is true, They actually think that if somehow all 85 certified Angus program dissapearred over night, and every person's memory of certified Angus beef was erased from their minds, that their red & white calves would bring $2 the next day. They will NOT. Their BLACK calves would only bring $1.75 instead of the $2. ALL ground beef would be $3.79 a pound... none would be $5.79. It hasn't hurt Angus one bit that other breed breeders started crossing their cattle to "Breed up" to black. It did what was intended, increased the demand for angus bulls. It is these other breeders who have ruined the other breeds we used to have, by turning them all into part Angus. What SHOULD have happened.. would be the ,say,.Simmental would market THEIR cows as the BSET cow to cross with Angus to produce a better black calf. Or say, Limosine..market THEIR bulls as the BEST bulls to breed your angus cows with to get a better black calf. And they should have spent their time and effort in breeding THEIR cattle for the best traits to yield a better black calve when crossed with Angus. They could have kept on breeding red Simms and orange Limms and Gelbievs etc. All you had, or have, to do to get CAB qualified calves from them is breed them with a homozygous for black Angus. " My red & white Simms bred to your Angus will yield a bigger, faster growing, more marbled, more docile BLACK calf than your red Limms or yellow Gelbs or even your Angus"! And select for that in your ( name of breed) breeding program.
So glad that horsemen are not that ignorant. Only Jockey Club registered TBs and compete in the multi-billion dollar TB racing industry. Don't matter how fast your Arabian or Appaloosa or QH is, you can NOT race it in the Derby, or Preakness etc. No other equine competition ( except NCHA cutting), pays the millions in purses that TB racing does, No other horses ( except some cutting bred QH) yearlings bring 6 figures at the yearling sales. Thank God, the draft hose ans stock horse and gaited horse and pony breeders didn;t get all butt hurt, and try to turn their TWHs and Clydesdales into TB racing horses!! The draft horse breeders didn't try to slip in Arabian blood to try to turn their Belgians into TBs ( TBs were actually developed a 1000 years ago by breeding European cold-bloods ( drafts) with Arabians). Thank God, TWH and Morgan, Welsh Pony, etc, didn't try to "breed up"their horses into 63/64ths TBs. If horse people were as ignorant as some cattle breeders were, we wouldn't have Clydesdales to pull the Budweiser wagons, or QHs to work cows, or TWH horses for that smooth ride. I guess we'd have a whole bunch of horsemen lamenting that "TB racing has ruined all the horse breeds"! If any TWH or Percheron or Morgan breeder was THAT jealous of the prices TBs bring, hell , they would just sell them and start raising TBs! Nothing stops them from doing it! Just as no one stops the anti-Angus bellyachers, from selling their cows and buying black ones! Or at least a black bull! There are breeders who LOVE their Belgians, and Saddlebreds, and Cobbs. and their yearlings from WGCs may sell for $100,00. but not the millions a TB yearling might. But , they don't bitch and moan and try to SUE ( I kid you not, one idiot on here wanted to SUE AAA because no one would pay a CAB premium for their red or white, or yellow calves!)
Once they do implement DNA testing as the criteria for CAB certification, all the Black other-breed owners will be SOL. Red Angus breeders will benefit ( over half the 85 certified Angus programs will certify red angus if the carcass meets the other criteria, but it has to be registered Red Angus. and not many people raise registered cattle for slaughter) Brangus, Chi-angus etc, will be ok due to the percentage Angus DNA they have.
mwj
Well-known member
Is it a discount or a premium as per the thread title.
SBMF 2015
Well-known member
Sell them directly to the packer on a live basis and he would have got the same price for both of them.
SBMF 2015
Well-known member
Watched this sale yesterday. Minus a handful of red Angus strs sprinkled in a pot load, all the cattle in the sale checked the color box for CAB. The price spread reflects quality
Thursday, January 5, 2023 CAB Feeder Sale
The 1st feeder special of the new year brought 1725 feeders to Fairview and it featured 5 pot load of 8 wt. steers and pen after pen of some of the best genetics this area has to offer! Cattle were double vaccinated, long time weaned and mostly still green in condition. A large percentage of today's run weighed 550-750 lbs.
Next week's special will be without restrictions.
| Steers | ||||||||
| 300-400# | 175.00 | to | 236.00 | Avg. | 215.00 | Load Lot | ||
| 400-500# | 170.00 | to | 239.00 | Avg. | 216.00 | 853@ 183.00 | ||
| 500-600# | 170.00 | to | 220.50 | Avg. | 200.00 | 851# @ 181.25 | ||
| 600-700# | 160.00 | to | 200.00 | Avg. | 182.00 | 861# @ 179.50 | ||
| 700-800# | 154.00 | to | 187.00 | Avg. | 174.00 | 871# @ 173.00 | ||
| 800-900# | 141.00 | to | 183.00 | Avg. | 168.00 | 876# @ 175.00 | ||
| Heifers | 300-400# | 160.00 | to | 211.00 | Avg. | 185.00 | ||
| 400-500# | 163.00 | to | 198.00 | Avg. | 188.00 | |||
| 500-600# | 154.00 | to | 187.00 | Avg. | 170.00 | |||
| 600-700# | 142.00 | to | 177.00 | Avg. | 159.00 | |||
| 700-800# | 130.00 | to | 167.50 | Avg | 152.00 | |||
| 800-900# | 120.00 | to | 147.00 | Avg. | 138.00 |
redcowsrule33
Well-known member
Red angus sired calves can qualify for many certified Angus programs if they are enrolled in the feeder calf certification program and wear the FCCP tag. Only need to have a registered sire. CAB through the angus association still won't accept them but many others will if they meet the other criteria.
I don't like the marketing but if producers are dumb enough to fall for it, what can you do. We use to have good red and white momma cows all across the country side standing it nice prairie grass. Now it's littered with these raggedy black cows that are probably as miserable as they look. Every one buys a Kubota to shred the grass down and a bunch of black cows to make sure it never comes back. They get together at the dq and propetuate the false info they were marketed.
I laugh when some one tells me their angus is such great meat then you see a pic of a raggedy black cow living on dirt eating who knows what trying to survive. Thanks... but I'll pass. There is more meat on a squirrel.
I laugh when some one tells me their angus is such great meat then you see a pic of a raggedy black cow living on dirt eating who knows what trying to survive. Thanks... but I'll pass. There is more meat on a squirrel.
OP
OP
Ky hills
Well-known member
The purpose of my post was to state that non black cattle are discounted. The folks that compile the sales reports view it as a discount. They sit amongst and no doubt talk with the buyers.
Several folks on here make the statement that black hided cattle make a premium and other cattle merely get a regular price and not a discount. I just happened to remember that I had seen it actually referred to as a discount.
For the record over half of our cows are black and all current bulls are black some red carriers though.
I should say if you have a direct purchaser like TC and they pay for their stipulations that makes sense.
OP
OP
Ky hills
Well-known member
If we did have a direct sale opportunity that would be beneficial.
There are none that I know of. A couple years ago there was talk from an area stockyards about trying to get an Angus Source sale but it never came to be.
If we actually had a CAB or direct sale opportunity that actually paid a premium I would be all in for it too just like TC. We ran only registered Angus bulls for close to 20 years. Never saw any premium. We wean and vaccinate, we tried selling in the graded feeder sales but they are at the wrong time of year to work for us. Usually the market is on its down turn in the fall when those start.
This will never ever happen.
There is zero definite genetic difference to identify angus from many other breeds.
Would be far to embarrassing for angus to explain why some of the top registered lines won't test positive on dna test for "angus" angus didn't go from belt buckle cattle to the size they are without some outside genetic influx.
I also find it interesting that the angus association has been discussing allowing cattle with more white on them to still be registered. Even this acknowledges that something is going on.
I have mentioned before about a local "registered angus" breeder throughout a fit and accusing his neighbors of allowing there crap bulls to breed his cows when his cows had a few extremely white belly calves born in his registered herd. Put up quite a stink about it for a while. Then suddenly he dropped it and wouldn't talk about it anymore. Then suddenly he had a couple of belted Galloway cattle in his herd. That he always said he would always only raised registered angus .
My guess is on of two things or possibly both happened. A breeder in the know told him that certain angus lines of angus produce white bellied cattle . Or he sent in the samples for dna verification and they matched to his bull.
It is still funny to drive by this herd to this day and see two belted Galloway cows and 2-3 calves with obvious white bellies in addition to the belted calves. I don't think he is fooling quite as many as he thinks he is.
SBMF 2015
Well-known member
It is more like the Continental breeds that have been "bred up" with Angus to turn them black that have lost their identity.
