Factors affecting the selling price of feeder cattle sold at Arkansas livestock auctions

Professional Animal Scientist, Sep 2002 by Troxel, T R, Gadberry, M S, Cline, S, Foley, J, Et al

Factors Affecting the Selling Price of Feeder Cattle Sold at Arkansas Livestock Auctions1

Abstract

Data were collected from 17 Arkansas livestock auctions to determine factors affecting selling price. Data included how calves were sold (single or groups), gender, breed or breed type, color, muscle thickness, horn status, frame score, fill, body condition, age, health, BW, price, and when during the sale the calf was sold. Data were randomly collected on 81,703 calves. The selling prices for steers ($99.70 /- $0.07), bulls ($95.07 /$0.08), and heifers ($88.75 /- $0.06) were different from each other (P

Brahman feeder cattle were greater than the overall mean and were not different from each other. Selling prices of 1/4 Brahman x other crosses, Simmental, Hereford, Brahman, and Longhorn were less than the overall mean and were different (P

(Key Words: Feeder Cattle, Livestock Auction, Selling Price, Beef Cattle.)

Introduction

In the U.S., the southeastern region (13 states) contains 52.6% of the beef cattle operations and 46.9% of the beef cows (12). In this region, 82.6% of the beef cattle operations contain 300 cows) use private treaty direct sales to market feeder cattle when compared with smaller producers [

Cow-calf producers are challenged to produce feeder calves that are acceptable to the industry. When buyers at a livestock auction view feeder calves, they must appraise individual characteristics (muscle thickness, frame score, breed composition, etc.) as predictors of quality and animal performance and adjust their bids accordingly. Many of these factors such as breed or breed type are very subjective. Therefore, many cow-- calf producers believe that feeder cattle are priced inconsistently. Producers do not understand why some phenotypic characteristics are discounted and others are not. Most feeder calf market reports list the selling prices of steers and heifers by BW groups, frame, and muscle score. Other reports have indicated that breed or breed type, health, gender, frame, muscle scores, and other noticeable factors do affect feeder calf selling price (3, 6, 8, 10).

Therefore, the objective was to determine the factors that affect the selling price of feeder cattle in Arkansas weekly livestock auctions. The factors evaluated not only included phenotypic characteristics of the calf but also livestock auction location, number of buyers at each livestock auction, and the time when calves are sold during the sale.

Materials and Methods

Five USDA-certified livestock market reporters collected data from 17 weekly livestock auctions in Arkansas from January 1, 2000 to December 31, 2000. The livestock auctions were located in Ash Flat, Charlotte, Conway, Fort Smith, Glenwood, Green Forest, Harrison, Hope, Marshall, Morrilton, Nashville, Ola, Ozark, Pocahontas, Ratcliff, Springdale, and Texarkana. The data collected included how the calf was sold (single or in a group), calf gender (bull, steer, or heifer), breed or breed type, color, muscle thickness, horn status [polled (dehorned) or horned], frame score (large, medium, or small), fill (gaunt, shrunk, average, full, or tanked), condition (very thin, thin, average, fleshy, or fat), age (calf or yearling), health [dead hair, stale, sick, bad eye(s), lame, or healthy], BW, price, and time of the sale the calf sold (first one-third, second one-- third, or last one-third). When the animal entered the auction ring, the livestock market reporters recorded this information just as the buyer must do before determining a bid. In 2000, a total of 533,283 feeder cattle were sold through these livestock auctions, and data were randomly collected (every 6th to 7th calf) on 81,703 animals (15.3%).

Frame and muscle scores were determined based on the U.S. Standards for Grades of Feeder Cattle (13). On October 1, 2000, USDA changed the scoring system for estimating muscle thickness (13). When comparing the 1980 (11) muscle score system (1, 2, and 3) to the 2000 muscle score system (1, 2, 3, and 4), the top two-- thirds of the 1980 "1"s became the 2000 "1 "s. The lower one-third of the 1980 "1 "s and the upper one-third of the "2"s became the 2000 "2"s. The bottom two-thirds of the 1980 "2"s became the 2000 "3"s, and the 1980 "3"s became the 2000 "4"s. Starting on wk 31, muscle score data were reported in thirds of a score (1 , 1, 1-, 2 , 2, 2-, etc.) using the 1980 muscle score system. This was accomplished so that muscle score data could be sorted and analyzed based on either the 1980 or 2000 muscle score system.

Data Analyses. The percentage of calves within group size, age, gender, breed or breed type, color, horn status, frame score, muscle score (1980 and 2000 muscle score system), fill, condition, BW group, and health were determined by the frequency procedure of SAS (9), for the entire dataset (n = 81,703). Because of the lack of the number of observations, a data subset (n = 56,563) that excluded lots with more than one feeder calf, feeder cattle that were not designated as calves or yearlings, and those weighing 340 kg was used for statistical analyses. There were 26,449 observations in the analysis for the main effect of 2000 muscle score system on selling price. Because of the unbalanced nature of the data, month, sale barn, time, and calf characteristics were analyzed individually as independent variables in which the model included month, BW, and nearby feeder cattle futures reported for the fourth work day of the week as covariates. Sale price was the dependent variable. All other variables contributed to the error sum of squares. When analysis of variance was performed for month of sale, month was excluded as a covariate. Alternatively, two variables and variable interactions were included in the model for specific variables of interest. Specific two-way interactions were tested for BW group with breed, color, frame, score, 1980 muscle score system, and gender. The 1980 muscle score data were used in the two-way interaction analysis because of the increased number of observations compared with the 2000 muscle score observations. Analyses with BW group excluded BW as a covariate. Month of sale interactions with gender and frame were determined as well. The analysis of variance was performed with the Generalized Linear Model procedure of SAS. Least squares means were generated and separated based on predicted differences; both are reported throughout. Because all colors are not represented within each breed or breed type, color and breed or breed type data are somewhat inherently confounded. A second data subset (n 22,121) consisting of cattle that were marketed at three locations (Harrison, Fort Smith, and Springdale) was used to determine the effect of number of head per lot marketed on price. Sale lots with two to five calves were grouped together as well as those with six or more calves. Livestock auctions that sold