simme
Old Dumb Guy
I think that statement supports the idea that the buyers are looking for a "type" as Fence said. The buyers obviously don't DNA the cattle. If the black simmentals look the "type", they are likely to not sell at a lower price. It is not just about the color, but the overall perception that the animal "looks" to be the type that will make money for the buyer/new owner based on his experience buying cattle and feedback on how those cattle performed in the past. Buyers are experienced. They know that not all black cattle are angus. If they purchase cattle based on JUST being black, they will hear about it from the guy they are buying for.
The buyer does not buy those cattle that don't fit the type he has an order for. Someone else buys them who has an order or use for that type of cattle. They probably go to a different place with a different plan that allows them to buy those cattle, but based on a lower cost. In that sense, there is no discount by the "buyer" just because he can. The original buyer does not bid on those off marked cattle at all for his black "type" order. So if there are fewer bidders (less demand) for an animal, it likely sells for less money.
Many cattle sell in large groups. Group lots that are more uniform (including color) tend to bring a little more. Singles tend to bring less.
And there is a LOT more involved than just how the animal will finish. There is high risk in having money invested in cattle. The buyer/new owner wants cattle that "based on his experience" will result in lowest risk for him. He will pass on those that he fears might not have the growth rate, feed efficiency, carcass traits, health (sick cattle cost the owner a LOT of money), etc that will minimize his risk. He is going to do his best to select the type cattle that best fit the plan for them at the lowest risk. Twenty years ago, those simmental had a reputation for excessive sickness and health problems in the feedlot. Whether that was true or not, IF you believed that to be the case and were going to purchase hundreds or thousands of head, you would be inclined to select angus appearing cattle compared to simmental appearing to minimize your risk - even if you had to pay a few cents more per pound for the angus type. If your experience or perception was that the simmental type were more likely to get sick.
In this area, there are some cattle with ear blood. If you take those cattle a hundred miles to the north to market, you will receive much less for them than if you take them 100 miles south. Different buyers with different orders for cattle in a few hundred miles. Those buyers to the north don't have orders for ear cattle. Cattle there are going toward the midwest where ear cattle do not perform as well in cold weather. To the south, buyers there have orders for cattle going west, but more south (Texas, Mississippi, etc). If you take ear cattle to the north, they are more likely to be purchased at a big discount and then hauled back to the south with another person involved trying to make some money by moving cattle to where there is a better market for them. Point is that the buyers for different types of cattle tend to go where there are more of those cattle available and the seller should try to market where there is better demand for his type cattle.
Different areas of the country are different. My understanding is that those red angus will have no discount in areas like Montana and the Dakotas. Supply and demand. Why do some brand of tractors or trucks or other equipment retain value better or sell at a higher price than other brands? Because they are better? Because they are perceived to be better? Either may be correct. Both drive the supply and demand which drives the price. The bidding stops when the price reaches a point that all the buyers believe is the max price they can pay and still have room for profit (based on their orders).
Just sharing what I believe to be the case and enjoying the conversation.
