By Alan Newport
If ever there was a time cattle buyers would be forced to take what they could get, it was during the past two or three years. However, it seems the buyers didn't see it that way.
A study of 105,542 cattle passing through 15 Arkansas sale barns in 2005 shows, when the chips were down and supplies were tight, cattle buyers still did the equivalent of picking cherries and throwing out the bad apples.
"When supplies are tight and prices are high, a lot of people have the perception discounts narrow or even disappear. We found that wasn't true," says Tom Troxel, University of Arkansas Extension beef cattle specialist.
Troxel, the project's lead researcher, says a similar study of year 2000, when supplies weren't nearly as tight, showed nearly identical pricing patterns for most traits buyers esteem or eschew.
Muscle matters
Muscle thickness is a prime example, Troxel says. Cattle buyers paid an even larger premium for No.-1 muscled cattle in 2005 — $2.58/cwt. — than in 2000, when they only paid 2¢ above average. The average price was $118.32 in 2005, $92.91 in 2000.
Buyers discounted cattle with No.-2 muscling by $2/cwt. below average in 2005, and paid statistically the same discounts for No.-3 and -4 cattle as five years earlier, when there was a more bountiful supply. These trends held true regardless of calf size.
Specifically, buyers discounted No. 2s by $9/cwt. in 2000, and $8.70 in 2005. In 2000, they hit No.-3 and -4 cattle with respective discounts of $21.32 and $33.82, when compared with No.-1 cattle. Last year, they discounted No.-3 cattle by $22.62, and No.-4 cattle by $32.98.
Arkansas calf producers apparently heeded the warnings from the last study against thin-muscled cattle, plus the drubbing they were taking in the markets, and selected against them, the researchers note. Fewer light-muscled cattle passed through the markets in 2005.
Frame score continued to be important to buyers, but preferences changed a bit since 2000. For one, discounts on small cattle increased from an average of $18.52/cwt. to $20.96/cwt.But buyers actually paid a 36¢ premium for medium-framed cattle in 2005, nearly $1/cwt. more than in 2000.
If ever there was a time cattle buyers would be forced to take what they could get, it was during the past two or three years. However, it seems the buyers didn't see it that way.
A study of 105,542 cattle passing through 15 Arkansas sale barns in 2005 shows, when the chips were down and supplies were tight, cattle buyers still did the equivalent of picking cherries and throwing out the bad apples.
"When supplies are tight and prices are high, a lot of people have the perception discounts narrow or even disappear. We found that wasn't true," says Tom Troxel, University of Arkansas Extension beef cattle specialist.
Troxel, the project's lead researcher, says a similar study of year 2000, when supplies weren't nearly as tight, showed nearly identical pricing patterns for most traits buyers esteem or eschew.
Muscle matters
Muscle thickness is a prime example, Troxel says. Cattle buyers paid an even larger premium for No.-1 muscled cattle in 2005 — $2.58/cwt. — than in 2000, when they only paid 2¢ above average. The average price was $118.32 in 2005, $92.91 in 2000.
Buyers discounted cattle with No.-2 muscling by $2/cwt. below average in 2005, and paid statistically the same discounts for No.-3 and -4 cattle as five years earlier, when there was a more bountiful supply. These trends held true regardless of calf size.
Specifically, buyers discounted No. 2s by $9/cwt. in 2000, and $8.70 in 2005. In 2000, they hit No.-3 and -4 cattle with respective discounts of $21.32 and $33.82, when compared with No.-1 cattle. Last year, they discounted No.-3 cattle by $22.62, and No.-4 cattle by $32.98.
Arkansas calf producers apparently heeded the warnings from the last study against thin-muscled cattle, plus the drubbing they were taking in the markets, and selected against them, the researchers note. Fewer light-muscled cattle passed through the markets in 2005.
Frame score continued to be important to buyers, but preferences changed a bit since 2000. For one, discounts on small cattle increased from an average of $18.52/cwt. to $20.96/cwt.But buyers actually paid a 36¢ premium for medium-framed cattle in 2005, nearly $1/cwt. more than in 2000.
But everyone has their own opinion.
