Discussing beef value always generates a lively response. The relationship between seller and buyer always rests in fairness. However, the documentation of what is fair is difficult, if not impossible.
The world of beef is a comingling of many different groups. As producers present calves or other cattle for sale, the product sold represents years of thought and hard work that was molded by some anticipation of what would sell the best.
The thought and hard work aspect of the cow-calf business is beset with time offsets. In other words, calves marketed today are not valued for today's market. They are valued for some future market that is unknown.
To make things even more difficult, those bulls selected for breeding this spring will not have progeny on the rail for three years. In reality, producers who buy bulls today are speculating on calf prices two to three years down the road.
Given this massive time offset, there is little surprise that this comingling of those involved in the beef business is always apparent when carcass value is discussed. It would be great to say that all these discussions are congenial.
However, any time a seller brings a product for sale, there always will be that lingering question of what is the real value of the product.
Did the seller get the appropriate value? Did the buyer underprice or overprice the product? To further complicate the question, in the beef business, there are several mechanisms that can be utilized to sell cattle.
There are the public markets, private treaties, video auctions or various combinations of marketing processes that also have varied delivery terms and/or ownership percentages.
As has been noted already, to further complicate the process, this sale may be occurring several months to more than a year before the final product, which is the carcass, is valued on the rail. Individual speculation as to the actual value of the carcass is based on market projections, demand estimates and myriad governmental-type trade agreements that are subject to change.
These changes can be very well planned or simply done overnight. A shipment of beef actually could be en route to its final destination but then turned back.
Well, we all could agree that this discussion seems to be getting somewhat removed from the feeder calf market but, in reality, it is not. The value of any calf, cow or bull is just a projection of what that value will be on the rail.
Even for breeding stock, producers buy selected animals based on the projected progeny value on the rail.