Cow Marketing
Few price graphs show opportunity
in the marketplace better than
the seasonal slaughter cow price
data. These data for utility slaughter
cows indicate that the increase in
price from November to March of
the next year averaged about
$6.00/cwt since 1997, equivalent to
an increase of about 14%. This
equates to about $72/head for a
1,200 lb cow.
Since most market cows in the U.S. are sold between October and January, the marketplace is flooded and prices are lowest at that time. When a cow is determined "open" at preg–check we want to get rid of her as soon as possible. She’s no longer considered a "money–maker," but rather a "money–taker." The quicker she can be sold the sooner we get her out of our hair and the less money we throw away supporting her. This is a true and logical argument, but it bypasses an opportunity in the marketplace due to seasonal price patterns. — Jason Ahola, BQA Coordinator, PH.D, University of Idaho.
Price Makers
Within a sale period, calf weight probably affects price more than anything else. Generally, lighter calves bring more money/lb. than heavier calves. If, for example, 1,200–lb. slaughter steers were bringing $70/cwt., 800–lb. steers would be worth about $80/cwt.; 500–lb steers would be bringing over $90/cwt.
These example price relationships are based on corn being "normally" priced. In years when corn is high priced, feedlot operators prefer to buy "weight" rather than feed it on, so the price of heavier cattle improves, relative to lighter feeders. In a recent year when corn was at a record high, slaughter, stocker, and feeder steers were selling within a $5/cwt. spread. Conversely, cheap corn increases the price of lightweight calves relative to heavier feeders.
Uniformity, Quality, and Volume
Feedlot operators want calves that will gain predictably in the feedlot. So, buyers will frequently pay a premium for cattle that are uniform. Uniformity begins with the cow herd and the type of bull used. A short breeding season is also an important aid in producing calves that are similar in age and weight.
Markets are usually topped by uniform calves grouped into truckload lots (48,000–50,000 lbs.) of steers or heifers. However, most owners of small herds cannot assemble truckload lots and so must look for other ways of selling their calves. Some collaborate with other owners of small herds with similar breeding, attempting to make it easier for buyers to assemble loads of similar calves, thereby improving price per pound.
Most auction markets do a very good job of grouping calves or promoting special sales for calves that have been treated similarly. They offer a variety of programs featuring different health and weaning regimes.
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Montana Beef Quality Assurance,
821 N. 27th St., PMB 159,
Billings, MT 59101,
406-896-9068(o), 406-671-0851(m)
cpeck@montana.edu
Montana Beef Network,
119 Linfield Hall
Bozeman, MT 59717,
406-994-4323,
mharbac@montana.edu