AVERAGE 500 LB CALF PRICES IN SOUTH TEXAS. Texas A&M AgriLife Research and Extension Center, Corpus Christi, 2015

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1 AVERAGE 500 LB CALF PRICES IN SOUTH TEXAS Texas A&M AgriLife Research and Extension Center, Corpus Christi, 2015 Levi A. Russell Assistant Professor & Extension Economist Corpus Christi, TX BACKGROUND & SUMMARY: As cow numbers rebound from the recent drought and calf prices begin to decline, producers will need to evaluate the profitability of various best management practices. This report details the average prices for 500 lb. calves for a number of genetic and managerial traits and factors. This is an update from a study completed last year and includes data on more than triple the number of calves as the previous study. OBJECTIVE: This project was designed to determine the effects of various factors on the market prices of feeder calves in South Texas. Data collected in the counties listed below for each calf in the study include visually evaluated coat color, sex, frame, fill, body condition, muscle score, Bos indicus influence, and presence of horns. Data on weight, and price per pound were also collected. Number of head, weight-adjusted average price per lb., minimum price per lb., and maximum price per lb. are broken down by the factors listed above and presented in table format. MATERIALS/METHODS: Extension faculty collected data in sale barns in Bee, Karnes, Jim Wells, and Live Oak, and Starr counties from April 2014 to September This study included 1,847 head of cattle. Data for this demonstration included the variables listed above and the futures price on the date of collection for the nearest-month 500 lb. steer calf contract. Statistical regression analysis was conducted to calculate a basic price slide for calves in the study (Figure 1). The slope coefficient was used to adjust average prices (Tables 1 through 8) to a common 500 lbs calf weight. RESULTS/DISCUSSION: Tables 1-8 show average adjusted prices for 500 lb. calves broken down by coat color, sex, frame, fill, condition, muscle score, Bos indicus influence, and presence of horns. Statistical tests were conducted on the un-adjusted prices to determine whether prices among the groups were significantly different. Superscript letters indicate statistically significant differences among the groups in each category. If two numbers in a table have the same superscript letter, the two numbers are not statistically significantly different from each other. If two numbers have different superscript letters, they are statistically significantly different. Prices with a superscript z had an insufficient number of observations and were excluded from the analysis. It s important to remember that these are simple averages and don t necessarily represent premiums or discounts. To calculate the premiums, a regression approach is used. This information can be found in What Drives Calf Prices in South Texas? 1 Adjusted 500 lb. calf prices broken down into coat color and pattern groups (Table 1) indicated that there are two basic groups: 1) black with white face, brindle, dun, black, red with white face, 1

2 and red calves and 2) white, smoky, brown, gray, and spotted. Brindle calves had the most variable prices, much more variable than any other coat color or pattern in the data. Adjusted 500 lb. calf price differences between steers, bulls, and heifers (Table 2) were as expected. At 500 lb., bulls had a statistically significant discount below steers, which is consistent with the analysis in Economic Advantage of Castration in South Texas 2. Prices for heifers were significantly below those for male calves. Large, medium, and small framed calves (Table 3) were all statistically different in price. There were very few small-framed calves in the dataset, so statistical comparison with the other groups was not possible. The same was true for fill (Table 4); the three categories with enough data to test were all different in price. Average and thin conditioned calves (Table 5) did not have a statistical difference between their mean prices but both were lower than fleshy calves. Similarly, calves with muscle scores (Table 6) of 2 and 3 did not have statistically significantly different prices, yet both were lower than calves with a muscle score of 1. This may be a result of relatively low feed prices and a dearth of market calves. As herds are rebuilt, the price differential may grow as buyers become more selective. The price differentials for the five Bos indicus influence categories (Table 7) were the most interesting in the study. The 75% Bos indicus was statistically more valuable than calves in the other categories. 50% and 25% calves were next while 0% and 100% calves were statistically the lowest-price calves. A cross-tabulation analysis shows that higher prices for Bos indicus influence are likely a feature of their ability to maintain condition and fill in adverse weather and pest conditions. The report titled What Drives Calf Prices in South Texas? provides a more indepth analysis of Bos indicus influence. Dehorned or polled calves (Table 8) received a premium over horned calves. This is likely due to the reduced chance of injury in feedlots. The premium for dehorned/polled calves represents the benefit of spending additional time managing calves in an operation using horned genetics or as the benefit of switching to polled genetics. ACKNOWLEDGEMENTS: County Agents Jared Alewine, Matt Bochat, Michael Donalson, Frank Escobedo, Bobby McCool, Rogelio Mercado, Omar Montemayor, Brian Yanta, and Makenzie Wyatt; Extension Assistant Justin Sáenz; Extension Program Specialist Mac Young; Extension Livestock Specialist Joe Paschal; and Extension Economist David Anderson are thanked for their efforts associated with this project. The author also acknowledges helpful comments made by Steve Hammack, Jason Johnson, and Mark Waller. 2

3 $2.50 $2.40 $2.30 Price in $/lb. $2.20 $2.10 $2.00 $1.90 $ Weight in Pounds Figure 1. Average Price Per Pound of Market Calves in Southern Texas,

4 Table 1. Coat Color Black with White Face % $2.30 a $1.25 $3.22 Brindle % $2.24 b $1.27 $3.10 Dun % $2.22 b,c $1.30 $3.10 Black % $2.22 b,c $1.27 $3.35 Red with White Face % $2.20 b,c,d $1.25 $3.35 Red % $2.18 b,d $1.26 $3.25 White % $2.17 d,e,f $1.25 $3.10 Smoky % $2.20 d,e,f $1.36 $3.20 Brown % $2.10 e,f $1.25 $2.80 Gray % $2.00 f $1.35 $2.90 Spotted % $1.90 g $1.30 $2.82 Table 2. Sex Steers % $2.28 a $1.25 $3.35 Bulls % $2.20 b $1.25 $3.35 Heifers % $2.13 c $1.25 $3.25 Table 3. Frame Large % $2.07 a $1.25 $3.25 Medium % $2.20 b $1.25 $3.35 Small % $2.37 c $1.27 $3.10 Table 4. Fill Tanked 0 0.0% N/A N/A N/A Full % $2.24 a $1.25 $3.22 Average % $2.18 b $1.25 $3.35 Shrunk % $1.87 c $1.25 $3.35 Gaunt 0 0.0% N/A N/A N/A

5 Table 5. Condition Fat 0 0.0% N/A N/A N/A Fleshy % $2.32 a $1.25 $3.10 Average % $2.18 b $1.25 $3.35 Thin % $2.12 b $1.25 $3.35 Very Thin 0 0.0% N/A N/A N/A Table 6. Muscle Score % $2.23 a $1.31 $ % $2.21 a $1.25 $ % $2.17 b $1.25 $ % $1.75 z $1.45 $2.35 Table 7. Bos indicus Influence 0% % $2.10 a $1.25 $3.25 ~25% % $2.18 b $1.27 $ % % $2.26 b $1.25 $3.35 ~75% % $2.29 c $1.25 $ % % $2.02 a $1.31 $2.60 Table 8. Presence of Horns Polled/Dehorned % $2.21 a $1.25 $3.35 Horned % $2.16 b $1.25 $3.22