Cow-Calf Corner, 2-20-17: Factors affecting bred cow value, Don't buy trouble

Feb. 20, 2017
Factors affecting bred cow value
by Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
Bred cows vary in value according to a number of factors including age; quality; weight; stage of gestation; hide color; time of year and location. Research at Oklahoma State University has examined 15 years of auction data in Oklahoma to determine the impact of these factors on commercial bred cow value. Purebred cows are more commonly marketed by private treaty or in production sales but the general relative impact of value factors identified in the auction study is likely to be similar.
In the latest weekly combined Oklahoma auction data, bred cow values are reported in a range from $735 to $1585/head. The research model would suggest that the base value of a four year old (fourth gestation), average quality cow, weighing 12-1300 pounds and 5 months bred is $1000-$1050/head. This estimate is consistent with the reported market data. Changes in any of these characteristics impact the value of the bred cow. All value differences below are based on current average market levels. Price adjustments are based on percentages which means that the dollar value of price adjustments will be different at lower or higher average market price levels.
Young cows have the highest lifetime production potential and thus first-calf heifers have the highest average value, about $35 /head more than the four year-old base cow. Cows show only modest price decreases through age six then drop sharply. For example, an 8-year-old cow will have a value about $110/cow less than the four year-old cow. Compared to the 12-1300 base weight, a bred cow weighing 14-1500 pounds will have an average value about $50/head higher. In contrast, a cow weighing 900-1000 pounds will have a value $85/head less compared to the base cow. Stage of gestation also impacts bred cow value with a first trimester bred cow valued roughly $50/head lower than a mid-trimester cow. Value increases for late gestation cows up to eight months bred by about $55/head over mid-trimester cows. However, bred cow value drops after eight months bred when cows are extremely close to calving.
Cow quality has a significant impact on bred cow value with high quality cows bringing about 14 percent higher value compared to average quality while low quality cows bring about 15 percent lower than an average quality cow. In the example above, that means roughly $150/head more for high quality to $150/head less for a low quality cow compared to average quality. Apart from quality, hide color affects value. The auction data does not report breeds but does distinguish black colored animals from all others. A black hide cow brings an average premium of nearly seven percent or $70/head more in the current market. In Oklahoma, bred cow values peak in March and are seasonally lowest in October, with generally low values from June through October. At current market levels, the seasonal swing in bred cow value would be about $140/head from the March peak to the October low.
The effects reported above are additive and it is easy to see why a wide range of bred cow values are reported. Using the research model and current market conditions (and holding cow weight and the time of year constant) various combinations of age, quality, gestation, and hide-color result in a range of bred cow value estimates from about $730 to $1300 per head. The research model appears to be capturing current average bred cow values reasonably accurately. However, demand for high quality cows appears to be stronger than usual with current values for high quality cows in Oklahoma reported at roughly $1550/head or $200-$250 per head higher than the research model would predict. This is likely another indication that herd expansion is still going strong.
 
Don’t buy trouble
by Glenn Selk, Oklahoma State University Emeritus Extension animal scientist
Biosecurity is a term that was used extensively after 9-11. Outbreaks of foot and mouth disease and bovine spongiform encephalopathy (BSE) in Europe had everyone in the livestock industries in America cautious..
Biosecurity is actually just a fancy way of saying “common sense,” because it refers to preventing disease introduction into a herd. Calf diarrhea or calf scours is a disease entity that can transported onto a cow calf ranch when common sense should intervene and help prevent the introduction of new calf scour pathogens.
South Dakota State University researchers (W. B. Epperson. 2003 South Dakota Beef Report) examined the cause of a scours epidemic in one spring calving herd back in 2000. Results of the retrospective, record-based investigation suggested that introduction of foster calves was associated with the calf scours outbreak. Prior to April 5, no scours cases had been observed, despite 39 calves being born. The calf scours epidemic was clearly in swing by the 45th day of the spring  calving season and first cases of the epidemic were observed between the 31st and 40th days (April 5, through April 14, 2000). Following April 5, records indicated there was the introduction of at least 2 foster calves. The outbreak commenced shortly after the introduction of foster calves. Foster calves can introduce pathogens to a herd, and can shed calf scours pathogens in their feces even when feces appear normal.  Because of this risk, the introduction of foster calves is not usually recommended.
If introduced into a herd, foster calves (with their foster dam) should be isolated from the remainder of the herd until all calves are at least 4 weeks old. At that time, it is generally regarded as safe to commingle foster calf pairs with the remainder of the herd.
Anytime new cattle are purchased and brought onto the ranch, biosecurity guidelines (aka: common sense) need to apply. Isolate the new animals for a period of about one month before turning them into pastures with other cattle. Visit with your local large animal veterinarian about recommended tests as well as vaccinations or parasite controls that can implemented on the new arrivals before exposing them to the remainder of the herd.
Cow-Calf Corner is a weekly newsletter by the Oklahoma Cooperative Extension Agency.