Cattle Breeds: Where’s the premium?

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High percentage Angus calves continue to outsell non-Angus calves of similar weight and frame at livestock auctions across the U.S.

Data collected from eight cooperating markets in fall 2010 reveal steers of that breed brought $6.32 per hundredweight (/cwt.) more than their non-Angus counterparts.

That’s a $32.58/head Angus advantage for the average 516-pound (lb.) steer.

Certified Angus Beef LLC (CAB) has tracked similar patterns regionally and nationwide since 1999 through its “Here’s the Premium” study. Average premiums have trended higher for Angus genetics over the years, with the most recent figure just 47 cents/cwt. below the 2008 record spread, but on slightly heavier average weights. The Angus heifer premium over non-Angus was 44 cents/cwt. more than in 2008.

The 2010 comparison study included more than 10,000 head from nearly 600 lots; the overall database contains records on 12,721 lots and approximately 275,000 cattle from 13 states. The markets participate in the study on condition that exact locations remain confidential.

“We’ve seen the premium grow because cattle feeders have learned from experience that high-percentage Angus cattle are healthier and more profitable to feed than other types, said Steve Suther, the CAB director of industry information who initiated the study. “When they bid accordingly, there are more dollars for Angus cow-calf producers compared to those with other cattle.”

The premium has endured independent of commodity cattle market trends (note top line in historical graph).

Kevin Dhuyvetter, an agricultural economist at Kansas State University, has been providing statistical expertise from the start.

“This was the second-highest Angus premium among 10 sets of fall values for steers,” Dhuyvetter said. “It was the third-highest Angus premium for heifers.”

For the first eight years of the project, fall surveys compared prices for Angus and non-Angus calves weighing 400 lb. to 599 lb., and spring surveys compared those for 600 lb. to 799 lb. feeders. Since 2008, the survey is only conducted every other fall. While the overall average price per head tends to increase for the lighter fall-sold calves, premiums for all Angus-influenced cattle have remained consistent and strong throughout the study.

As the last two HTP installments have shown strong Angus-influenced premiums, the average historical premium for all Angus steers in the database moved up by $2.96/head from 2008 to average $24.22 in the 2010 report.

All calf prices were consistently $12 to $14/cwt. higher at northern and western locations, compared to the base of Oklahoma, but Kentucky calf prices averaged $5.86/cwt. lower, Dhuyvetter noted.

Auction markets from states that also include Kansas, North Dakota, South Dakota, Wyoming, California and Nebraska reported breed type, sex, weight, and price of calves personally known as Angus genetics compared to non-Angus calves on four different sale dates. One Dakota market manager said roughly 80% of the cattle sold there are high-percentage Angus; providing listings for similar but non-Angus calves is often reported as a challenge across the country.

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Kevin Hill    
Utah  |  February, 28, 2011 at 04:17 PM

Are Holsteins and Jerseys included in non-angus breeds? That would skew results. At $1.50 per lb., a red cross-bred calf that weighed 25 lbs. more at weaning would erase the quoted advantage in the article ($37.50 vs. $32.58) from having a black hide .

Glenn Treftz    
South Dakota  |  February, 28, 2011 at 07:09 PM

Many black hided calves sold at auction have an injection of a black continental breed such as Simmental, Gelbvieh, or Limousin. When the auction report comes out, they are just listed as "black" calves to be assumed angus. I have never seen a angus calf bring a $6.32 premium over a calf of "equal" quality from another breed or color. I too think this article may be skewed. With $7 corn looking like a long term reality, cattlemen need to be focusing on matter the color.

Bill Armbrust    
Nebraska  |  February, 28, 2011 at 08:58 PM

This story leaves out one important fact that the Angus breed does not (for good reason) promote, Heterosis. The combination of unrelated continental and Angus- brings the premium value discussed in the article with more health, less grade 4's, and more pounds at weaning. In all my experience, my reading, and my conversation with commercial cattlemen, a 3/4 angus calf is an animal of less total value than a 1/2 angus calf. There is great benefit to red or black angus with out doubt, but not past 75%.

Bill Fenn    
TX  |  March, 03, 2011 at 09:24 AM

I don't see any mention of any data from Texas, one of the largest cattle producing states in the country. Without that data, this is article is just an Angus marketing gimmick. I know for a fact that in south Texas calves out of Charolais bulls on Brahman/Hereford F1 cows sell better at the auctions than blacks. I agree with the other comments about black hided cattle. I had a friend who had some 1/2 Angus 1/2 Limousin cattle. Around some people he would call them Angus around others he would call them Black Limousin.


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