Estimating the Economic Value of Specific Characteristics Associated with Angus Bulls Sold at Auction

Abstract

The genetic traits of a purebred bull convey the reproductive and economic value to buyers. This study examines and compares the value of actual production weights (birth, weaning, and yearling weight), production expected progeny differences (EPDs) (birth, weaning, milk, and yearling), and ultrasound EPDs (carcass quality predictors) for purebred Angus bulls sold at auction. One EPD, birth weight, was valued by buyers more than its corresponding actual weight, though both actual weights and EPDs significantly impact price. Predictors of carcass quality were important in determining price. Finally, several individual animal factors and sale characteristics were significant in determining price.

Video market data for calves and yearlings confirms price discounts for Western cattle

“…For Good statistical results were found for Certified Angus Beef (CAB) candidates, for which the rancher must provide written certification that the animal is pure Angus. Blank et al (2006) did not evaluate this factor, but we added it to account for what appears to be a strong market preference (Jones et al 2008). There were CAB candidate premiums for both calves and yearlings (table 1), but calves had statistically significant premiums in 9 of the 11 years (table 4) while yearlings had statistically significant premiums in only 5 of the 11 years (table 5).…”

Price Determinants of Performance-Tested Bulls over Time

“…In a given year, a single bull's genetic makeup influences many calves sold from a herd, making it critical to select bulls that will produce cost-competitive and high-quality calves. Feedlots typically desire to purchase feeder cattle that have higher average daily gain, lower feed-to-gain ratios, higher dressing percentage, and superior carcass quality because these characteristics increase the profitability of cattle during the feedlot phase (Jones et al, 2008;Lewis et al, 2016;Mark, Schroeder, and Jones, 2000;Tang et al, 2017). In the long run, a single bull's genetics could also affect the herd through heifer calves retained to replace culled cows.…”

“…They found that phenotypic traits were more valuable to producers than EPD information. Jones et al (2008) analyzed data collected over a 4-month period from purebred Angus bull sales located across the Midwest and Northwest United States. They found that both EPDs and phenotypic traits significantly affected sales price.…”

“…Furthermore, early studies show producers' value of EPD measurements was small relative to phenotypic traits and performance measurements (Chvosta, Rucker, and Watts, 2001;Dhuyvetter et al, 1996;Irsik et al, 2008). This might be attributable to the lack of knowledge and confidence in using EPD information in their bull purchasing decision (Jones et al, 2008). More recent studies indicate that EPD information is becoming more important in determining bull sale price (Bacon, Cunningham, and Franken, 2017;Brimlow and Doyle, 2014;Jones et al, 2008;Kessler, Pendell, and Enns, 2017;McDonald et al, 2010).…”

A review of population data utilization in beef cattle research1

“…A more recent extension of this body of research examines the value of management alternatives such as preconditioning and identification or source verification for feeder cattle and calves (Avent et al, 2004;Bailey, 2004;Dhuyvetter et al, 2005;Dickinson and Bailey, 2005). Still others, such as Mintert et al (1990), Parcell et al (1995), and Jones et al (2008), have used combinations of transaction level data and aggregate market information to look at the contribution of individual characteristics to breeding animal value. Studies of this type are not only interesting from a research perspective, but extremely useful to industry participants in helping to understand the magnitude of these price influencing factors and how they may have changed over time and across geographic locations.…”