Cattlemen are interested in utilizing genetic programs and management practices that will maximize the return from their calves. However, market price fluctuations and the confounding effect of various characteristics on price per pound make it difficult for cattlemen to distinguish the true value of their efforts. Many conclude that the kind of calf produced and good management doesn’t matter.
County Extension Educators, Agriculture (CEEA) in the Southeast Extension District set out to determine the extent to which characteristics of feeder cattle affect their value at auction. CEEA already skilled in live animal evaluation met to calibrate their grading of calves for breed type, frame size, muscle, gut fill, condition, uniformity, and health. Sex of calf, presence of horns, number per lot, average weight, and sale price were also recorded on each of the 15,731 lots that were included in the study. Fifteen auction barns in eastern and southeast Oklahoma were surveyed during the month of October 1997.
Usable data were collected on 15,473 lots of feeder cattle sold at auction in eastern Oklahoma and Oklahoma City. Data were collected at 14 locations during October. 1997. Steers made up 42% of the lots sold with bulls and heifers accounting for 16% and 42%, respectively. The lower proportion of heifers sold relative to steers and bulls may be indicative of the number of females retained by producers as replacements for the cowherd. Bulls sold for$3.26/cwt less than that of steers, heifers at $10.56/cwt less. The lower prices received for bulls are due to the reduced animal performance experienced with these animals subsequent to castration. The $10.56/cwt price difference for heifers relative to steers also relates to problems characteristic to females relative to steers, those including reduced daily gain, lower feed efficiencies, problems with animals in heat, unexpected pregnancies and difficult births. The price may also reflect a generally lower quality of animal in that the better heifers are retained as replacement females for the cowherd.
Most cattle. 86% had sale weights less than 600 lbs., 59% of sale weights were less than 500 lbs. As body weight increased, sale price decreased for steers and heifers. Although steers sold at a higher price per pound than heifers, the price decline due to weight was greater for steers. However, the calculated value of added gain averaged across weight groups to 899 lbs. was not appreciably different between sexes ($53.83/cwt versus $54.17/cwt for steers and heifers, respectively). As cattle were sold at heavier weights, the difference in price between steers and that of steers and heifers declined.
Certain attributes which are stereotypically assigned to breeds include those influencing growth rate, reproductive traits, carcass traits, etc. These biases also affect price. Relative to cattle perceived as Angus by the graders, black exotics and other exotics sold at greater prices for both steers and heifers. Dairy cattle and longhorns sold at very large discounts relative to Angus with Herefords and >1/4 Brahmans discounted approximately $2-8. Steers with less than 1/4 Brahman influence sold at a slight discount, $1.91/cwt. Brahman heifers sold at a $1.43/cwt premium, perhaps due to a perceived value as replacement females for areas where resistance to heat, humidity and parasites are valued. These preferences for certain breed characteristics were nominally constant across weight groups with premiums and discounts declining as weight increased.
The number of head in a sale had a significant positive effect on sale price. Lots with two or more steers sold for $4.01-7.14/cwt over the price of steers sold as singles. The premium for multiple head sale lots held for heifers but held at about $4.00/cwt. Multiple head lots that were not uniform sold for approximately $2.00/cwt less than uniform lots for steers and heifers. A premium for uniform, multiple head lots is generally attributed to the convenience of filling orders for cattle of a specified description on the part of an order buyer. Also, larger, uniform lots may indicate a single point of origin for the cattle leading to less stress and fewer health problems as may be associated with pen of cattle put together.
Small frame steers and heifers sold with severe discounts. $18.86 and $20.99/cwt, respectively. The medium frame size was broken into upper medium and lower medium categories. A significant price difference, approximately two dollars/cwt for steers and heifers was shown to exist in cattle which would normally be classified in the medium frame score category. This preference for larger framed cattle may be due to a perceived value in these cattle for growth. Larger cattle, though, can be a problem because of overly large carcasses and a reduced ability to grade choice. These data did not reflect these concerns.
Lighter muscled cattle sold at large discounts, especially steers. Light muscled steers received discounts averaging $26.48/cwt. The discount for medium and light-muscled heifers relative to heavily muscled heifers was substantially less that of steers.
Gut fill was discounted based in the magnitude of variation from an average fill. Gaunt and tanked steers and heifers received severe discounts with lessened discounts as fill moderated. The effect on price by fill was fairly equal for steers and heifers.
Overly thin and overly fat cattle were reduced in price. Very thin steers and heifers averaged discounts of over $13.00. Fat steers were reduced in price an average $6.01/cwt less than animals in average condition.
Cattle perceived to be sick or those that were lame suffered severe discounts averaging $$21.58-$30.48/cwt whether heifers or steers. Cattle with bad eyes or stale cattle received price reductions averaging $6.91-$13.38/cwt. Cattle with rough or muddy hair coats were slightly discounted ($2.62 and $2.51/cwt for steers and heifers, respectively).
Based on the findings of this OSU Extension study, the decisions that Oklahoma cattlemen make relative to the selection and management of their herds do affect the price the receive for calves. Auction bidders do recognize individual animal differences and reward sellers accordingly. Often, producers are unable to sort out all the variables that affect the ultimate sale price for their calves. Hopefully, this study will reinforce extension and industry recommendations toward the goal of marketing a higher quality product that is more profitable for cattlemen.