Cow-calf producers can do more to improve the quality and selling price for the feeder cattle sold through Arkansas livestock auctions. Through genetics and management, feeder calf value can be improved and overall returns increased.
In 2000 and 2005, data were collected from Arkansas livestock auctions to determine factors affecting the selling price.
Because the average selling prices for 2000 ($92.91) and 2005 ($118.32) were different, the selling price data are reported as a deviation from their respective averages. Therefore, the term “premium” was used to reflect selling prices above the averages, and the term “discount” was used to reflect selling prices below the averages.
In 2000, No. 2 muscle score cattle were discounted $9 per hundredweight (cwt), compared to No. 1 muscle score cattle. The discount in 2005 was almost the same ($8.70). No. 3 cattle were discounted compared to muscle score No. 1s by $21.32 and $22.62 for 2000 and 2005, respectively.
Therefore, even though the average prices in 2000 and 2005 were different, the discounts for muscle scores didn't change from 2000 to 2005.
The Arkansas cow-calf producer produced more large-framed and fewer medium-framed and small-framed calves in 2005 than in 2000. In 2005, buyers didn't pay the premium for large-framed cattle as they did in 2000, but they paid more for medium-framed cattle.
This could be attributed to tight feeder cattle supplies, or it could be a sign that the cattle industry is moving back toward a medium-framed calf. Small-framed cattle were heavily discounted in both years, but a higher discount was detected in 2005.
The cattle breeds or breed types that increased in value as compared to the average from 2000 to 2005 were Angus × Hereford, Angus, Angus × Charolais.
Angus × Limousin, Hereford × Brahman × Angus, Hereford × Charolais, Brangus, Brahman, Angus × Brahman, Hereford × Brahman, Charolais × Brahman, Hereford × Simmental breed or breed types stayed the same as compared to the average from 2000 to 2005.
Charolais × Limousin, Charolais, Hereford × Limousin, Limousin, Limousin × Brahman, Simmental, Saler, Brahman cross and Longhorn calves decreased in value in 2005, compared to 2000.
The colors that received an increase in selling price were yellow-white face, black-white face, black and gray. White, red-white face and red were discounted in 2005 compared to 2000.
Arkansas cow-calf producers castrated more bull calves before selling them in 2005 than in 2000 (2000, 33.2 percent steers; and 2005, 40 percent steers). Buyers paid a higher premium for steers ($6.48 versus $6.02) and paid less for bull calves ($0.30 versus $1.68) in 2005 than in 2000. Therefore, market signals to the cow-calf producer continue to reinforce castration of bull calves.
Although feeder cattle supplies were tight, buyers discounted horned cattle greater in 2005 (-$2.86) than 2000 (-$0.51). Polled calves brought just about the average price for both years, but polled cattle received an increased premium in 2005.
Arkansas cow-calf producers sold more calves in groups (25.2 percent versus 18.8 percent) and fewer calves individually (74.8 percent versus 81.2 percent) in 2005 than they did in 2000. Buyers paid a higher premium for cattle sold in groups in 2005 than in 2000.
Buyers are continuing to send an economic signal for selling calves in groups rather than individually.