Factors affecting the selling price of replacement and market cows sold at Arkansas livestock auctions

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

Factors Affecting the Selling Price of Replacement and Market Cows Sold at Arkansas Livestock Auctions1

Abstract

Data were collected from 15 Arkansas livestock auctions to determine factors affecting cow selling price, including cow type (replacement or market), pregnancy status, breed or breed type, color, horn status, frame score, muscle thickness, fill, USDA Quality grade for market cows, number of brands, brand location, health, BW, age, and price. Data were randomly collected on 23,772 cows. The mean selling price for all cows was $42.84 /- $10.83 [US dollars/45.45 kg (X(overscored) /- SD)]. All main effects reported were significant (P

cows in their third trimester sold for the highest price ($50.33 /- $0.17) followed by cows not checked for pregnancy ($48.97 /- $0.17), second trimester cows ($47.59 /- $0.14), first trimester cows ($45.67 /- $0.26), and cows not pregnant ($43.86 /- $0.25). Market cows in their first ($40.19 /- $0.29), second ($40.18 /- $0.27), and third trimesters ($39.86 /- $0.68) and those not pregnant ($39.50 /- $0.13) sold for the same price (P>0. 10), but all prices were greater than the price received for market cows not checked for pregnancy ($38.98 /- $0.10; P

(Key Words: Replacement Cow, Slaughter Cow, Livestock Auction, Selling Price, Beef Cattle.)

Introduction

Culling cows to improve the herd is an important management practice. Spring-calving cows are usually culled in the late fall soon after calves are weaned. Many times little attention is given to the best method to market them. Few producers realize that the sale of cull cows accounts for 15 to 20% of the yearly gross revenues of cow-calf operations in the US (9). The National Animal Health Monitoring System (NAHMS) beef study (4) reported that, of the cows culled in 1996, 39.8% were culled because of old age or bad teeth, 25% were sold because of pregnancy status, and 18.5% were sold for economic reasons (drought, herd reduction, or market conditions). Only 5.7% of cows were culled for poor production. Producers in the Central region, which included Arkansas, were more likely to cull cows based on age and teeth status than producers from other geographical regions. The 1999 National Market Cow and Bull Quality Audit (5) reported that producers lose approximately $68.82 of potential revenues per non-fed animal slaughtered in the US.

The slaughter-cow industry segregates live cows and their carcasses into end-use categories based on subjective estimates of external fat. There have been a number of studies that investigated the value of cull cows based on carcass characteristics and subprimal yield (3), body condition (1) and by-product yield (2). Very little information is available to help cow-calf producers implement management practices that might improve the value of replacement and market cows sold at livestock auctions.

When buyers at a livestock auction view replacement and market cows, they must appraise phenotypic characteristics (muscle thickness, frame score, breed composition, etc.) as predictors of quality and adjust their bids accordingly. Many of these factors such as breed or breed type are very subjective. Therefore, the objective was to determine the factors that affect the selling price of replacement and market cows in Arkansas weekly livestock auctions. The factors evaluated included phenotypic characteristics of cows and livestock auction location.

Materials and Methods

Five USDA-certified livestock market reporters collected data from 15 weekly livestock auctions in Arkansas from March 1, 2001 to May 31, 2001 and September 1, 2001 to November 30, 2001. The livestock auctions were located in Ash Flat, Charlotte, Conway, Fort Smith, Glenwood, Green Forest, Harrison, Hope, Marshall, Morrilton, Ola, Ozark, Pocahontas, Ratcliff, and Springdale. The data collected included cow type (replacement or market), pregnancy status (not checked; not pregnant, or first, second, or third trimester), breed or breed type, color, horn status (polled or horned), frame score, muscle thickness, fill (gaunt, shrunk, average, full, or tanked), USDA Quality grade for market cows (Canner, Cutter, Utility, or Commercial), number of brands, brand location (ribs, shoulder, or hip), health [dead hair, stale, sick, bad eye(s), lame or healthy], BW, age, and price. Cows were classified as replacement or market based on visual appraisal and buyer identification. A veterinarian employed by the livestock auction examined cows for pregnancy by rectal palpation. Pregnancy status was either written with a paintstik or a tag glued to the hip. The frame score was defined as large (>498 kg), medium (405 to 498 kg), or small (

Data Analyses. Because of the lack of observations, a data subset (n = 22,747), which excluded cows weighing 906 kg, was used for statistical analyses. The percentage of cows within cow type, pregnancy status, breed or breed type, color, horn status, frame score, muscle thickness, fill, USDA Quality grade, number of brands, brand location, age, and health were determined by the frequency procedure of SAS (6). Because of the unbalanced nature of the data, the month, sale barn, and cow characteristics and their interaction with cow type were analyzed as independent variables. The model included week, age, and BW 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, week was excluded as a covariate. The analysis of variance was performed with the Generalized Linear Model procedure of SAS (6). Least squares means were generated and separated based on predicted differences; both are reported throughout this discussion. Because all colors are not represented within each breed or breed type, color and breed or breed type data are somewhat inherently confounded. Longitudinal and latitudinal coordinates for each livestock auction were used to determine the relationship between location and selling price using a regression analysis. All selling prices reported are in US dollars/45.45 kg.

Results and Discussion

The mean selling price for all cows was $42.84 /- $10.83 (9 SD) All main effects reported were significant sources of variation (P0.10) among the selling price of replacement cows for March ($51.97 /- $0.21), April ($51.98 /- $0.19), or May ($51.60 /- $0.19), but the fall months were different from each other (September, $47.48 /- $0.23; October, $45.01 /- $0.19; and November, $43.11

/- $0.20; P0.10), but the remaining months (May, September, October, and November) were different from each other ($42.97 /- $0.16, $39.54 /- $0.21, $36.00 /- $0.16, and $34.32 /- $0.18, respectively; P