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Years of data highlight factors influencing sale price

Maggie Smith and Esther McCabe for Progressive Cattle Published on 19 March 2020

As cattle producers continue to seek ways to add value to their operations, recent research from Kansas State University looks at a variety of factors influencing the sale price of beef calf lots.

Ken Odde, a professor in the department of animal sciences and industry, along with his research group, have been analyzing 24 years of data from Superior Livestock Auction’s video sales. The database includes over 145,000 lots of beef calves, representing more than 15 million total calves offered for sale.

Data collection began in 1995, with the primary focus of investigating the value of calf health programs. Over the course of the past 24 years, the information provided by the seller about a lot of calves has increased nearly two-fold. Lot information collected in 1995 included 13 factors. In 2018, that number grew to 24 factors, as Superior Livestock attempted to identify attributes of calf lots of interest to buyers.

Calf health

Calf lots sold through Superior Livestock Auction may qualify for a recognized vaccination protocol. Descriptions of the key programs are:

  • VAC 24 – Calves vaccinated at 2 to 4 months of age, sold off the cow
  • VAC 34 – Vaccinated three to four weeks prior to weaning, sold off the cow
  • VAC 45 – Calves weaned for 45 days and given two rounds of vaccinations

There has been a dramatic increase in the percentage of beef calf lots qualifying for calf health programs such as VAC 34 and VAC 45 from 1995 to 2018. During this period, the percentage of lots of beef calves sold non-weaned and that had not received viral vaccinations decreased. In 2018, less than 0.5% of lots were sold without receiving any viral vaccination and 88% of beef calf lots qualified for a VAC health program (i.e. VAC 24, 34 or 45).

VAC 24 represented 1% of the lots in 1995, and that has since grown and remained at approximately 10% of calf lots. The VAC 34 program is the most popular calf health program with 50% of lots qualifying. VAC 45 started at 3% of lots in 1995 and has grown and remained at approximately 30% of lots since 2014.

In 2018, the premium for VAC 34 was $3.47 per hundredweight (cwt) and for VAC 45, $6.19 per cwt compared to VAC 24 lots. While each of these programs vary in their requirements, not every program available is suitable for every operation. The premiums for these calf health programs may not be enough incentive for some operations. For example, producers who do not have the appropriate facilities or labor for weaning and/or additional vaccinations, the premiums may not be enough.

Location, location, location

More recently, Odde’s team has investigated the effect of region, state and trucking distance on the sale price of beef calves. In general, cattle move from across the U.S. toward the High Plains to cattle-feeding country.

The Rocky Mountain and North Central region on average have the greatest sale price, followed by the South Central and West Coast, and the Southeast regions. The Rocky Mountain and North Central sale prices were $9.17 per cwt greater than the Southeast region, followed by the South Central ($5.19 per cwt) and West Coast ($5.05 per cwt).

Taking a closer look, the effect of state of origin was investigated. States with more than 1,000 lots of beef calves were included. Using Florida as the base, the highest price lots of calves were those located closest to cattle feeding country. Calves in Nebraska had prices $17.00 per cwt greater than Florida calves, followed by Kansas ($15.43 per cwt), and South Dakota ($14.94 per cwt).

Digging in deeper, effects of trucking distance independent of region were evaluated. The top six states of lot delivery included Colorado, Iowa, Kansas, Nebraska, Oklahoma and Texas. These top six states represented 70% of calf lots and 83% of feeder cattle lots, meaning the majority of lots were delivered to one of these six states. Trucking distances were grouped as 1) within-state, 2) short-haul, 3) medium-haul and 4) long-haul.

For lots of beef calves, there was a $2.54 per cwt greater sale price for calves remaining within-state compared to long-haul lots, followed by short-haul ($2.07 per cwt more) and medium-haul ($0.88 per cwt more).

Within feeder calf lots, feeder cattle remaining within-state had greater sale prices ($1.53 per cwt more) compared with long-haul lots. Short-haul ($1.38 per cwt more) and medium-haul lots ($0.82 per cwt more) also sold for more than long-haul lots.

As expected, lots remaining within-state or being hauled a short distance had an advantage in price over lots being trucked a longer distance. The price advantages for feeder cattle were less than calf lots, likely because they have fewer health risks associated with transportation.

Additional research has looked at the value of breed composition, growth promoting implants, age and source verification, and the Non-Hormone Treated cattle program. As the beef industry continues to evolve, producers can use information and trends to help make decisions best suited for their operations.  end mark

Maggie Smith and Esther McCabe are graduate students at Kansas State University involved in the research group. Email Maggie Smith or Esther McCabe