Record-high calf prices last year spelled good news for most U.S. ranchers, but there was an extra bonus for many of them.
That came in the form of record-high premiums paid for Angus calves at auction compared to non-Angus contemporaries, as reported to Certified Angus Beef LLC (CAB). The database on more than 300,000 calves sold in 13,794 lots at 10 markets since 1999 is part of the company’s “Here’s the Premium” project.
“Everybody who sold calves enjoyed the market response to supply and demand, but some may not have noticed the price differentials still held,” said Steve Suther, the CAB director of industry information who initiated the study.
Data from nine cooperating auction markets last fall showed the all-time high Angus premium in absolute terms (see Fig. 1 on page 3 of this release). That was $5.30 per hundredweight (/cwt.) for the combination of 504-pound (lb.) heifers and 511-lb. steers sold in 660 lots.
On the steer side, it was $6.20/cwt., down 8.6% from the 2008 record, but 17% above the 2006 figure. Meanwhile, the heifers set a 14-year high of $4.40/cwt. above non-Angus (Fig. 2).
As always, market managers reported the winning bids on known Angus-based genetics from 450 lb. to 550 lb., noting breed type, sex, weight and price vs. non-Angus steers and heifers, keeping muscling, frame and other non-breed factors constant. They also note any preconditioning, management or sale factors.
Kansas State University agriculture economist Kevin Dhuyvetter, who has analyzed the data from the start, says lots identified as weaned or vaccinated earned premiums of $7.36/cwt. compared to other lots, regardless of breed type.
Premiums for Angus calves have grown in a near linear trend since 1999. Dividing those 14 years into two equal periods (Fig. 3) shows a per-head Angus steer advantage growing from $21.21 in the first seven reports to $31.40 in the four reports representing the last seven years. Angus heifers moved up from $15.05 to $19.72 per head in those same averages.
“I’m not sure if there’s a replacement heifer phenomenon or simply that as prices in general have increased, the premiums associated with Angus genetics have increased in absolute terms,” Dhuyvetter says.
“It does stand to reason that if people start rebuilding herds, we would see a narrowing of the steer-to-heifer spread,” he adds “If Angus calves continue to bring premiums, then Angus heifers that might be going as replacements should be gaining in value to non-Angus heifers.”