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Producers have always known their
genetic and management choices affect the bottom line. Now a
North Dakota State University (NDSU) study quantifies how much
some of those decisions are worth.
“We were in these sale barns at the
key times of the year, from the start of the feeder calf sale to
the end,” says Greg Lardy, NDSU animal scientist. “We tried to
put ourselves in the seats of the buyers, collecting information
that they would have access to as they bid on the calves.”
Lardy and his team recorded data
from the sales of nearly 200,000 cattle in 18,178 lots by
attending auctions in North Dakota, Montana and South Dakota.
Those factors included lot size,
sex, color, vaccination history and natural eligibility. Steers
had the greatest premium, at $9.68 per hundredweight (cwt.)
ahead of heifers in fall 2006-07. In winter 2007-08, that
premium was $8.66/cwt.
Lot size showed the next biggest
profit center. Those numbering more than 21 head sold at a
$6.29/cwt. advantage to lots of 5 head or fewer in the fall, and
at a $4.99/cwt. premium in the winter.
“We hear routinely that calves
sold in bigger groups bring more dollars,” Lardy says. “This
dataset really starts to drive home the point that larger lot
sizes can bring quite a few more dollars.”
The more calves the better, but
the more alike those calves are the bigger the bonus.
“The adage of trying to find ways to market larger sets of more
uniform calves is still important,” he says.
Black groups sold at the highest
prices in both seasons, with $3.39/cwt. and $1.72/cwt.
premiums, respectively. Black and
black white faced mixed groups came in second, followed by
straight black white faced and then mixed color groups. Figuring
that bonus on a 500- to 700-pound (lb.) calf translates to a
per-head premium of nearly $17 to $24.
“The bottom line is that there
are a number of different alliance programs where people are
looking for black-hided cattle,” Lardy says. “Certified Angus
Beef ® (CAB ®) and other programs have created quite a bit of
value there, so you’ve got a number of different market outlets
for those cattle once they’re finished.”
In the fall there were nearly
four times as many black groups, as any other color
classification, which speaks to the popularity of Angus
genetics, says Larry Corah, vice president of Certified Angus
Beef LLC (CAB).
“We’ve seen the amount of
Angus-influence steadily trend upward over the last decade,” he
says. “We believe that’s because commercial cattlemen have found
ways to be more profitable with them, whether that’s retaining
ownership and reaping the benefits of carcass merit or selling
at the sale barn and realizing a price improvement.”
A CAB survey of 12 auction
markets across the United States shows this trend isn’t limited
to the Dakotas and eastern Montana. For 10 years, CAB has
tracked how known Angus genetics fare compared to non-Angus in
its “Here’s the Premium” study. Last fall, 500-lb. Angus steers
received $34.51 more at auction than non-Angus contemporaries.
“That was a 10-year record, even
as calf prices slumped. That’s a powerful message,” Corah says.
For more information on the NDSU
study, visit
http://www.ag.ndsu.edu/livestock/2007-beef-report.pdf. For
additional Here’s the Premium information, go to
http://www.cabpartners.com/news/published/index.php.
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