FACTORS AFFECTING GRID VALUE
Colorado researchers studied factors affecting total value of 1215 steer and 785 heifer carcasses marketed from 1998 to 2004 on simulated grids, with variable prices for Quality Grade (QG) and Yield Grade (YG). One price grid emphasized QG and the other YG. Within these two basic grids, Choice (Ch) was valued over Select (Sel) by $5, $10, or $20 per cwt. Also, three base (Ch YG3) prices were evaluated: $118, $131, and $144/cwt carcass. (Current average Ch price is about $140/cwt.) Overall, 29% of the carcasses were Ch YG3, 23 % were Ch YG2, and 21% were Sel YG2.
By far the most important factor affecting total carcass value was weight, ranging from accounting for 51% with $118 base and $20 Ch-Sel spread to 93% with $144 base/$5 spread. QG accounted for a range of from 4% with $145 base/$5 spread to 45% with $118 base/$20 spread. YG accounted for only 4 to 8% of revenue variation regardless of base price, Ch-Sel spread, or grid. YG was as important as QG only at low Ch-Sel spread. At higher spreads, QG was 8 to 9 times more important than YG. While all grids severely discounted poor YG, the net discounts for Ch YG4 were relatively small at higher Ch-Sel spreads. So, under these conditions there is incentive to feed longer to heavier weights to realize more dollars from more pounds and higher QG. However, there were no discounts in this study for excessive carcass weight (often set at 950 lb in most grids). Also, cattle fed longer become fatter, so feed efficiency declines. Accounting for these factors would probably have changed results somewhat. Finally, over the course of this work (1998 to 2004), average days on feed increased by 13, carcass weight increased 32 lb, and YG4-5 increased from 1.3% to 7.7%, but percent Choice and Prime varied little, ranging from 60 to 63%. (Prof. Anim. Sci. 22:41)
Colorado researchers studied factors affecting total value of 1215 steer and 785 heifer carcasses marketed from 1998 to 2004 on simulated grids, with variable prices for Quality Grade (QG) and Yield Grade (YG). One price grid emphasized QG and the other YG. Within these two basic grids, Choice (Ch) was valued over Select (Sel) by $5, $10, or $20 per cwt. Also, three base (Ch YG3) prices were evaluated: $118, $131, and $144/cwt carcass. (Current average Ch price is about $140/cwt.) Overall, 29% of the carcasses were Ch YG3, 23 % were Ch YG2, and 21% were Sel YG2.
By far the most important factor affecting total carcass value was weight, ranging from accounting for 51% with $118 base and $20 Ch-Sel spread to 93% with $144 base/$5 spread. QG accounted for a range of from 4% with $145 base/$5 spread to 45% with $118 base/$20 spread. YG accounted for only 4 to 8% of revenue variation regardless of base price, Ch-Sel spread, or grid. YG was as important as QG only at low Ch-Sel spread. At higher spreads, QG was 8 to 9 times more important than YG. While all grids severely discounted poor YG, the net discounts for Ch YG4 were relatively small at higher Ch-Sel spreads. So, under these conditions there is incentive to feed longer to heavier weights to realize more dollars from more pounds and higher QG. However, there were no discounts in this study for excessive carcass weight (often set at 950 lb in most grids). Also, cattle fed longer become fatter, so feed efficiency declines. Accounting for these factors would probably have changed results somewhat. Finally, over the course of this work (1998 to 2004), average days on feed increased by 13, carcass weight increased 32 lb, and YG4-5 increased from 1.3% to 7.7%, but percent Choice and Prime varied little, ranging from 60 to 63%. (Prof. Anim. Sci. 22:41)
