We often hear that Northern cattle are “better,” but their relative value versus Southern cattle could depend on the Choice/Select spread. Texas A&M University Extension Beef Cattle Specialist Ted McCollum recently evaluated USDA grade-and-yield data comparing fed cattle from Texas and Nebraska.
Nebraska cattle graded 58 percent Choice and 4 percent Prime, while Texas cattle graded 44 percent Choice and 1 percent Prime. But in terms of cutability, 53 percent of Texas cattle graded Yield Grade 1 or 2, compared with 36 percent of Nebraska cattle, and 6 percent of Nebraska cattle and 1 percent of Texas cattle fell into Yield grades 4 or 5.
On average, using a Choice/Select spread of $6 per hundredweight, the higher yield of Texas cattle makes up for their lower Quality Grades, and their value is the same as the Northern cattle. When the Choice/Select spread exceeds the $6 average, Northern cattle, with a higher percentage of Choice carcasses, gain an advantage in grid-pricing systems. When the Choice/Select spread is lower than $6, higher-yielding Southern cattle could have an advantage.