Cattle market pays for more than just black hides
November 1, 2010
When Dale Moore, of Cattleman’s Choice Feedyard, receives a load of black cattle in the yard, he already knows what ranchers will ask when they get their carcass data back.
“Why didn’t I get more Certified Angus Beef (CAB) premiums?”
Knowing that’s an area of confusion, the Gage, OK, feeder covers it with customers ahead of time.
“I go through all of the specifications. I will tell them, ‘This is why it’s such a good paying program. This is why not every calf qualifies,'” he said.
Once they know CAB isn’t just a black-hided program, it helps explain why some calves top the market while others lag behind.
“Color doesn’t necessarily guarantee a premium,” said Brett Barham, University of Arkansas animal scientist. “A sub-par-quality calf is always going to be sub-par, no matter what color it is, so just making your calves black isn’t going to increase your premiums.”
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Paying attention to genetics and enrolling in health-, source- and age-verified programs can add value, he said, but, “None of that really means anything unless there’s a buyer willing to pay for it.”
The key is doing homework ahead of time, so calves are intended for a specific market.
For CAB, each animal must be at least 51 percent black-hided or enrolled in AngusSource, just to be evaluated at the licensed plant. Then the carcasses must meet an additional 10 criteria that include modest or higher marbling, no dark cutters, less than 30 months of age and a range of 10 to 16 square inches of ribeye.
“We’ve found much variation in our customer cattle,” Moore said. “The ones who target CAB and Prime use the carcass data that we give them back to make genetic changes and really excel, breeding better bulls to those specific cows that carry traits through to the feedyard.”
Greg Highfill, Oklahoma Extension livestock specialist, said producers can learn more about their cattle by cooperating with a feeder or enrolling a handful in a feedout program.
“That’s when you can prove your calves have added value,” he said. “There’s obviously a lot more tied to genetic improvement than hide color. Hopefully, producers are utilizing EPDs (expected progeny differences) for the key value traits, whether that’s average daily gain (ADG) or carcass grading or whatever marketing line increases value in their operation.”
Generic black does carry some market significance, because dozens of certified programs require that as a first step for acceptance into their brands, although premiums may not add up to much. Highfill noted that value for a black hide is not what it once was.
“We’ve changed hide color to such a degree now that buyers are becoming more aware of value past color. In the span of time before this, they couldn’t be that picky,” he said.
Moore said premiums have also caught up in recent decades, so those who are truly adding value reap the benefits.
“The premiums are much more advanced,” he said. “Ten or 15 years ago, you got 50 cents per hundredweight (cwt.). We’ve got cattle now that are excelling in CAB and Prime and those cattle bring $100 per head over the market.”
That’s because today the value difference is more defined. Qualifying for specific brands can lead to extra cash, but only if producers have talked about what their cattle are worth.
“With commodity-type cattle, you could wean them and capture some value for that management, but for the most part, they’re still commodity cattle,” Moore said. “On the other side of that, there are guys spending $4,000 on good Angus bulls and yet they wake up in the morning and say, ‘I think I’ll sell my calves.’ Then they wonder why the check didn’t amount to enough to cover that bull. They haven’t explored their options for adding value.”
The cattle feeder concluded, “Nobody is going to pay them more if they don’t expect more.”