FACTORS AFFECTING CALF PRICES IN 2021-2022 FROM SUPERIOR LIVESTOCK AUCTION DATA
There are some management and health programs that consistently increase sale price of beef calves. An analysis of calf sales through the Superior Livestock Auction by Kansas State University and Merck Animal Health looked at traits of load lots of calves that had impacted sales price. This analysis included 15,287 lots with over 2.5 million calves. The average lot contained 168 head and weighed an average of 559 pounds. The base average price was $1.81/pound.
As you may suspect, calf sex had a large impact on sale price. Steers brought premiums of $19.26/cwt over the base price and mixed lots of steers and heifers brought $4.90/cwt over the base. There were no bull calves in this analysis, intact bull calves are known to receive discounts of $5 to 7/cwt compared to steers with discounts often reaching over $20/cwt for intact bull calves. The presence of horns leads to an average discount of $3.57/cwt or about $20/head. Survey data of cow-calf producers in Oklahoma (Mulenga, Raper, and Peel; 2021) indicated that 71% of producers castrate their calves and 77% practice some form of horn management.
One practice that did not affect sale price was implanting. In this population of calves, 49% were not in programs that banned the use of growth promoting implants. In these calves, there was no discount for implanted calves. The 10 to 20-pound increase in sale weight from implanting with a value of $18 to 40/head is being left on the table, which is the equivalent of a $3 to 7/cwt discount for the calves sold. The Oklahoma cow-calf survey indicated only 20% of producers implant calves preweaning.
Breed was also a significant factor affecting sale price in this analysis. For the national data set brahman influenced cattle were discounted by $7.43/cwt, but when the analysis was conducted for the Southern Plains region (AZ, NM, OK, AR, LA, and TX) the discount for brahman influence breeding was only $1.56/cwt, likely due to the higher incidence of Brahman breeds in this area. Brahman breeding is essential to match cows to the environment, they are known for heat and insect tolerance and provide hybrid vigor to crossbreeding programs. This analysis indicates we should keep the minimum brahman influence in our herd to meet environmental conditions and market calves where the discounts are lowest.
“There are several programs that add to the sale price which may incur some added costs of management, paperwork, ear tags, or audits. Producer BQA (Beef Quality Assurance) certification added $1.40/cwt ($8/head) to sales price, showing buyers see benefits in this certification.” All natural programs (Natural+, GAP, NHTC) in this analysis have different requirements that must be considered, but these added from $0.87/cwt (Natural+) to $6/cwt (NHTC) in premiums for calves enrolled in those programs.
Value added health programs showed added value. The base price for this analysis was the VAC24 program where calves are vaccinated at 2 to 4 months of age with 1 dose of a 7-way, 8-way, or 9-way clostridial vaccine; 1 dose of a 5-way viral respiratory vaccine; and 1 dose of a Mannheimia Haemolytica or Mannheimia Multocida vaccine. Calves in the VAC24 program are unweaned at the time of the sale. Compared to these vaccinated but unweaned calves, calves in the VAC45 program (vaccinated twice and weaned for 45-days received a $8.64/cwt premium in the national data set and a $9.87/cwt in the Southern Plains Region. In the analysis of the OQBN preconditioning program premiums for 2022 the weighted average premium for OQBN VAC-45 calves was $18.67/cwt relative to unweaned non-preconditioned calves with no indication of vaccination status (Raper and Peel, 2023).
Buyers recognize the value of these factors. To remain profitable cow-calf producers need to add value where they can to increase the demand for their calves.