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

Longitudinal and latitudinal coordinates for each livestock auction were used to determine the relationship between location and selling price using a regression analysis. Regression analysis was also used to determine the impact of average sale volume on selling price, sale volume, average number of buyers attending a sale, and number of buyers on selling price. Chi-square analysis (9) was used to determine whether the livestock auctions that sold feeder calves above the mean price sold more feeder cattle that were of breeds or breed types priced higher. All selling prices reported are in U.S. dollars/45.45 kg.

Results and Discussion

Main Effects. The mean selling price for all calves in 2000 was $93.69, and all main effects reported were significant sources of variation (P0.10). The selling price between feeder cattle sold in groups of two to five calves and in groups of six or more were also not different ($95.14 /- $0.17 vs $94.61 /$0.34; P>0.10). This lack of statistical difference might have been due to the small sample size of the feeder cattle that were sold in groups.

The selling prices of feeder cattle that were sold in the first one-third ($93.64 /- $0.07) and second one-third ($93.90 /- $0.08) of the sale were not different (P>0.10). There was a difference between the selling prices of feeder calves sold during the second one-third and last one-third ($93.90 /- $0.08 vs $93.55 /- $0.08; P0.10) between the selling prices of feeder cattle sold during the first one-third and the last one-third of the sale. Although the main effect of time of sale on the selling price of feeder cattle was significant (P

Heifers constituted 44.0% of the cattle sold, whereas steers and bulls made up 33.0 and 23.0%, respectively. The selling prices for steers ($99.70 /$0.07), bulls ($95.07 /- $0.08), and heifers ($88.75 /- $0.06) were all different (P

Two hundred seventy-seven different breeds or breed types were identified in the survey. Eighteen breeds or breed types represented 94.2% of the total feeder cattle. The breed or breed type was based on common industry perception rather than actually knowing the breed composition. This, however, is what a buyer must do before a selling price can be offered. Table I summarizes the number of observations, frame scores, muscle scores, and color percentages of the 18 breeds or breed types. The main effect of cattle breed or breed type on selling price of feeder cattle was significant (P0.01); however, those breeds or breed types that had selling prices less than (P

It appeared that buyers were hesitant to bid on feeder cattle when the breed or breed type was not clearly identifiable. The Brahman x other crosses and 1/4 Brahman x other crosses groups consisted of Brahman breeding (1/2 or 1/4) with other breeds or breed types that were less common or indefinable, which may explain why Hereford x Brahman x Angus, Angus x Brahman, Hereford x Brahman, and Angus x Brahman had greater selling prices than Brahman x other crosses and 1/4 Brahman x other crosses.

During 1996, a livestock auction survey was conducted in Georgia (3). It reported that Angus cattle received a $3.01 premium selling price over the overall mean and that Hereford, Limousin, and Simmental feeder cattle were discounted: $2.01, $2.27 and $2.73, respectively. This result differs with the data reported in this study. In the present study, Angus feeder cattle did not receive a premium selling price above the overall mean, and Limousin feeder cattle received a $2.70 premium above the overall mean rather than a discount. Hereford and Simmental feeder cattle were discounted compared with the overall mean selling price, but the discounts were much greater than the discounts reported by Brown and Morgan (3). The differences between these two reports may be attributable to location (Georgia vs Arkansas), year, feeder cattle supply, and demand.