Livestock: February 2003 Other Livestock Articles

Many times, producers will respond to a new management idea with the comment "How do I get paid for that?" That is a great question because it challenges everyone to remember that the cattle business is just that – a business. While we can't forget issues like environmental adaptability and reproductive efficiency, it is interesting to look at some of the factors cattle producers get paid (or discounted) for directly.

Table 1 summarizes three sale barn surveys conducted by the Extension service in Oklahoma, Kansas and Arkansas that attempted to determine the premiums and discounts received by feeder calves with various characteristics. While the absolute numbers vary somewhat, some trends are evident. Bulls get a discount, as do cattle with less than heavy muscling. Larger groups of de-horned, uniform calves get a premium. Makes sense, doesn't it?

Premiums and discounts vary with the cattle cycle between years and with the seasonal tendencies within years, i.e., discounts are never as deep in up-trending markets as they are in declining markets and calves that get discounted in late summer can be par value in the spring. However, over the long run, improving the appeal of your calf crop to buyers will result in fewer discounts.

Table 2 reflects the desires of feedlot operators (your customers) regarding the information they would like to have on the cattle they feed. It is obvious to me that our customers are wanting, and will soon be demanding, more information from their suppliers (us). This underscores the need to begin compiling information about your cattle and your management as best you can, as well as the larger need for a more coordinated production and information system for beef producers.

Table 1 is part of how you get paid today. Is Table 2 an indication of how you will get paid tomorrow?

Thanks to Laura May, summer livestock intern, for compilation of this data.

Literature Cited
Behrends, L., et al., 2001, The Value of Information as Perceived by Feedlot Managers, Colorado State University, Animal Sciences Research Report 2001.

Smith , S.C. et al. 1998. Oklahoma Cooperative Extension Service. "Effect of Selected Characteristics on the Sale Price of Feeder Cattle in Eastern Oklahoma." E-955

Troxel, T.R. et al., Univ. Of Arkansas Cooperative Extension Service. 2002. The Professional Animal Scientist 18 (2002):227-236. "Factors Affecting the Selling Price of Feeder Cattle Sold at Arkansas Livestock Auctions."

Cooperative Extension Service, Kansas State University. 1993. Buying and Selling Feeder Cattle, The Impact of Selected Characteristics on Feeder Cattle Prices.

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