Money On The Table: Top 9 Factors That Influence Cattle Price on Sale Day
For cow-calf producers, fall is often a time for preconditioning, weaning and marketing calves. While this year’s prices will likely be towards the top end compared to previous years, could you be leaving money on the table?
South Dakota State University Extension researchers have been monitoring sale barn prices and categorizing lots of cattle in the Northern Plains to see how variables effect the overall check at the end of the day, says a recent SDSU article.
Here’s a list of the nine most influential variables when it comes to receiving the best price for your cattle.
The Sale Barn
Using backgrounded calf data from 2022, it was determined that the sale barn itself can have an impact on prices received at the market. This is likely due to the volume of cattle.
SDSU noted that “high-volume” sale barns received higher prices, while barns considered “low-volume” sold animals at discounts ranging from $5.43 to $19.31 per cwt.
While price discounts may be cause for pause, there are other factors to also consider before making the decision to market cattle at a different barn. Consider other expenses, such as milage differences, marketing expenses and other fees to determine if a change in location would ultimately lead to a change in profit.
Steers Vs. Heifers Vs. Bulls
Consistent with other studies, yearling steers brought a premium compared to similar heifers and intact bulls, which were discounted $13.34 per cwt. and $7.26 per cwt. respectively.
From a management perspective, it may be worth evaluating the use of sexed semen, especially in an operation already implementing artificial insemination breeding practices. Additionally, producers may want to evaluate the cost and effort of different castration methods to reduce the number of bulls, SDSU explains.
Hide Color
The researchers found that similar fall calves and backgrounded calves of any single color brought premiums over mixed lots of cattle—encouraging producers to market cattle in consolidated lots of a single color to avoid discount.
Specifically, lots of black-hided, black-faced cattle received top dollar. The other observations are listed as discounts (on average) relative to the price of these all-black lots.
Red-hided, red-faced cattle were discounted $8.37 per cwt., while white cattle received a $13.95 cwt. discount.
Compared to the all-black counterparts, mixing hide colors led to discounts of $8.83 to $20.74 per cwt. Specifically, cattle with spots, roan, white feet or tails, tiger-stripes and other non-solid color patterns were heavily discounted, as much as $36.85 per cwt.
Animal hide color is often a point where a producer’s breed preference collides with the perceived market-endpoint preference, SDSU notes. While the object of the study is not to influence breed selection, there may be value in evaluating breeding decisions that will provide the most profitable outcome for the operation.
Lot Size
Answering the question—do larger lots really bring a premium? Not necessarily.
In the study, lots were divided into 4 groups: 1 to 20, 21-50, 51 to 100 and 101-plus--assuming the sale barn staff had already separated cattle for uniformity, such as frame size, muscling and body condition.
Overall, cattle in lots of less than 20 were discounted $7.82 per cwt. compared to lots of 21 to 50 head. However, this was the only significant difference, notes SDSU, with larger lots of cattle receiving no additional premiums.
Lot Uniformity
SDSU found that lot uniformity, such as muscle, flesh and height, was very consistent across all barns as outliers in the herd had been pre-sorted before entering the sale ring. The sort provides buyers with the ability to fill orders and needs. Unfortunately, though, it may lead to a group of less than 20 head for the producer, which will likely receive a discount in the ring.
Horns
Discounted $24.63 per cwt., horned cattle take a large hit compared to their hornless counterparts. SDSU researches note this indicates buyers are unwilling to take on the inherent risk to other animals, carcass damage or lost of gain when purchasing horned animals.
Creep Feeding
The study found purchasers were willing to spend an additional $12.93 per cwt. on cattle not offered creep. Producers should evaluate the value of creep feed compared to the total gain and reduced price per cwt. received to determine if feeding creep is cost effective.
Implants
Non-implanted calves brought $7.38 per cwt more than their implanted counterparts. Similar to creep feeding, the cost of implants and increased weaning weights should be considered against the price difference received for non-implanted cattle, SDSU notes.
Vaccination Status
Herd health protocols also play a role in prices received, SDSU found, after evaluating the use of 5-way and 7-way vaccines.
Cattle that received a 5-way vaccine brought $14.59 per cwt. more than unvaccinated cattle, while those receiving a 7-way vaccine were paid $12.19 per cwt more. Additionally, cattle with unknown vaccination status were discounted $22.52 per cwt., and cattle with an unknown 7-way status were penalized $12.42 per cwt.
This data indicates that producers who follow a vaccination protocol and provide a list of dates and vaccinations on sale day are compensated for their efforts, SDSU says.
Read More: Cattle Auction Preparations: A Sale Day Checklist for Ranchers
Meanwhile, producers marketing cattle in a specific program that limits vaccines should ensure appropriate buyers are present and informed to minimize potential discounts.
At the end of the day, understanding production costs and market trends is increasingly important.
Additionally, SDSU notes that understanding these variables discussed will increase competitiveness and flexibility for producers marketing cattle in 2023 and beyond.