southern tier stocker cattle initiative

Southern Tier Stocker Cattle Initiative

Funded by the New York State Department of Agriculture and Markets project :

“Stocker cattle: Using underutilized grasslands to improve economic viability of the Southern Tier while providing viable careers for beginning farmers.”

2

Factors affecting the auction price of New York feeder cattle

Michael J. Baker, Cornell UniversityTodd M. Schmit, Cornell UniversityMatt N. LeRoux, CCE – Tompkins County

IntroductionPrevious studies have shown genetic and management factors affect price of feeder cattle

• Weight• Lot size• Health• Condition• Fill• Muscling• Frame size• Breed• Time of sale• Horn status

Burdine, et al., 2011 (Kentucky)Schultz, et al., 2010 (Missouri and Kansas)Troxel, et al., 2006 (Arkansas)

Data collectionFinger Lakes Livestock Exchange, Canandaigua, NY

Special Feeder Calf sales

Data collectedFactors collected

Weight Uniformity Muscle

# head • Weight Thriftiness

Time • Color Price

Wean/PC/Horns • Breed Buyer

Sex BCS

Color Frame

Distribution of Average Weight (N = 3,867 lots)

Distribution of lots by month

0%

5%

10%

15%

20%

25%

Total of 3867 observations, 9885 head

Summary statisticsVariable Mean SD Minimum MaximumPrice, $/lb. 1.16 0.25 0.18 2.00Average weight, lb. 557 195 95 1597Head/sale 566 162 278 821No. lots 224 57 122 302Lot size, #hd. 2.5 2.2 1 14Single head lots, % 49Preconditioned, % 44Steers, % 43Heifers, % 39Bulls, % 18Total of 3867 observations, 9885 head

Feeder Cattle

Value Determining Factors

Color (Hereford = $0) Black +$12 Red +$8 Exotic -$11

Horns -$8

Vaccinations +$5

Muscling Heavy +$4

Light -$16

Sex Heifer -$9

Frame

Condition/Flesh

Weight

Personal Preference

History

Seasonal factors affecting the price of feeder cattle

Characteristic Price differential, $/cwt1 % of pensMonth

March 25.4* 11April 9.4* 14May 13.7* 9September 1.8 11October -1.1 20November 6.1* 20December Base 15

Total of 3867 observations, 9885 head1Indicates statistical difference from base P < 0.05

Effect of lot size on feeder cattle price

Price of New York 500-600 lb. steers and CattleFax reported 550 lb. steers

0.801.001.201.401.601.802.00

Pric

e, $

/lb

Sale date

CattleFax 550 lb steers New York 450-650 lb steers

Average Difference$0.28/lb.

Why the $0.28/lb. difference • Freight - $0.10 - $0.12/lb.• CattleFax cattle - $0.05 - $0.08/lb.• Difference then is ~$0.10/lb.

Conclusions/thoughtsBuyers pay a premium for: $/hd

1. Color 28-67

2. Muscle 30

3. Pre-conditioned 16

Buyers discount for: $/hd

1. Bull 46

2. Horns 63

3. Thin body condition 50

4. Unthrifty 132

Conclusions/thoughts

Why $0.28/lb discount?1.Freight2.Number of cattle/sale3.Weight range4.Lot size

Mar Apr May Sep Oct Nov Dec

Series1 1.08 1.06 1.08 0.88 0.95 1.01 0.94

0.80

0.85

0.90

0.95

1.00

1.05

1.10

Index 500-599 lb, 2012-2016

Mar Apr May Sep Oct Nov Dec

Series1 1.04 1.08 1.08 0.94 0.91 0.94 1.00

0.85

0.90

0.95

1.00

1.05

1.10

Index 600-699 lb, 2012-2016

Mar Apr May Sep Oct Nov Dec

Series1 0.98 1.06 1.08 0.91 0.90 1.04 1.03

0.80

0.85

0.90

0.95

1.00

1.05

1.10

Index 300-399 lb, 2012-2016

Mar Apr May Sep Oct Nov Dec

Series1 1.07 1.08 1.06 0.89 0.91 1.06 0.93

0.80

0.85

0.90

0.95

1.00

1.05

1.10

Index 400-499 lb, 2012-2016

Projected Feeder Calf Prices, May 2019

150146

143 142139

135130

125120

115110

400 450 500 550 600 650 700 750 800 850 900

BeefBasis.com. Basis projection for Virginia. April FC $148.20, May Corn futures $3.85. NY basis -$.25.

Funded by the New York State Department of Agriculture and Markets project :“Stocker cattle: Using underutilized grasslands to improve economic viability of the Southern Tier while providing viable careers for beginning farmers.”

Next

• Expected price today• Cost of production: $.60/lb• Select weight(s) you will purchase• Calculate margin:

o Sale wt x price minuso Purchase wt x priceo Cost of gain

Southern Tier Stocker Cattle Initiative

Funded by the New York State Department of Agriculture and Markets project :

“Stocker cattle: Using underutilized grasslands to improve economic viability of the Southern Tier while providing viable careers for beginning farmers.”

To register or for more information contact:Audia Denton

Project CoordinatorStocker Cattle Initiative

Department of Animal Science110 Morrison HallCornell UniversityIthaca, NY 14853

607-255-8497ad982@cornell.edu

Stocker Short Course – Part II, Fall• September – Choosing the right stocker calf• October – Did the stocker make money in 2018?• November – Fencing and Facilities• December – Receiving cattle and looking to 2019