Southern Tier Stocker Cattle Initiative Funded by the New York State Department of Agriculture and Markets project : “Stocker cattle: Using underutilized grasslands to improve economic viability of the Southern Tier while providing viable careers for beginning farmers.”
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Southern Tier Stocker Cattle Initiative
Funded by the New York State Department of Agriculture and Markets project :
“Stocker cattle: Using underutilized grasslands to improve economic viability of the Southern Tier while providing viable careers for beginning farmers.”
2
Factors affecting the auction price of New York feeder cattle
Michael J. Baker, Cornell UniversityTodd M. Schmit, Cornell UniversityMatt N. LeRoux, CCE – Tompkins County
IntroductionPrevious studies have shown genetic and management factors affect price of feeder cattle
• Weight• Lot size• Health• Condition• Fill• Muscling• Frame size• Breed• Time of sale• Horn status
Burdine, et al., 2011 (Kentucky)Schultz, et al., 2010 (Missouri and Kansas)Troxel, et al., 2006 (Arkansas)
Data collectionFinger Lakes Livestock Exchange, Canandaigua, NY
Color (Hereford = $0) Black +$12 Red +$8 Exotic -$11
Horns -$8
Vaccinations +$5
Muscling Heavy +$4
Light -$16
Sex Heifer -$9
Frame
Condition/Flesh
Weight
Personal Preference
History
Presenter
Presentation Notes
Based on research collecting prices of feeder cattle at Finger Lakes Livestock Exchange
Seasonal factors affecting the price of feeder cattle
Characteristic Price differential, $/cwt1 % of pensMonth
March 25.4* 11April 9.4* 14May 13.7* 9September 1.8 11October -1.1 20November 6.1* 20December Base 15
Total of 3867 observations, 9885 head1Indicates statistical difference from base P < 0.05
Effect of lot size on feeder cattle price
Presenter
Presentation Notes
Base is average lot size of 2.5. As lot size increased, the price per cwt increased, up until 8.5, then decreased Prices paid for calves were at their highest for lot sizes around 8.5 – a size typical of medium truck load sizes? Prices decreased beyond this, likely because there were fewer buyers bidding on these larger sized lots. Also, does uniformity play a role here in larger lot sizes but not accounted for in our model.
Price of New York 500-600 lb. steers and CattleFax reported 550 lb. steers
0.801.001.201.401.601.802.00
Pric
e, $
/lb
Sale date
CattleFax 550 lb steers New York 450-650 lb steers
Average Difference$0.28/lb.
Presenter
Presentation Notes
Correlation of 0.89 R-square of 0.79.
Why the $0.28/lb. difference • Freight - $0.10 - $0.12/lb.• CattleFax cattle - $0.05 - $0.08/lb.• Difference then is ~$0.10/lb.
Presenter
Presentation Notes
Mileage to Garden City, KS is 1500 miles. At $0.04/mile, and 50,000 lb. = $0.12/lb.
Conclusions/thoughtsBuyers pay a premium for: $/hd
1. Color 28-67
2. Muscle 30
3. Pre-conditioned 16
Buyers discount for: $/hd
1. Bull 46
2. Horns 63
3. Thin body condition 50
4. Unthrifty 132
Conclusions/thoughts
Why $0.28/lb discount?1.Freight2.Number of cattle/sale3.Weight range4.Lot size
Mar Apr May Sep Oct Nov Dec
Series1 1.08 1.06 1.08 0.88 0.95 1.01 0.94
0.80
0.85
0.90
0.95
1.00
1.05
1.10
Index 500-599 lb, 2012-2016
Mar Apr May Sep Oct Nov Dec
Series1 1.04 1.08 1.08 0.94 0.91 0.94 1.00
0.85
0.90
0.95
1.00
1.05
1.10
Index 600-699 lb, 2012-2016
Mar Apr May Sep Oct Nov Dec
Series1 0.98 1.06 1.08 0.91 0.90 1.04 1.03
0.80
0.85
0.90
0.95
1.00
1.05
1.10
Index 300-399 lb, 2012-2016
Mar Apr May Sep Oct Nov Dec
Series1 1.07 1.08 1.06 0.89 0.91 1.06 0.93
0.80
0.85
0.90
0.95
1.00
1.05
1.10
Index 400-499 lb, 2012-2016
Projected Feeder Calf Prices, May 2019
150146
143 142139
135130
125120
115110
400 450 500 550 600 650 700 750 800 850 900
BeefBasis.com. Basis projection for Virginia. April FC $148.20, May Corn futures $3.85. NY basis -$.25.
Funded by the New York State Department of Agriculture and Markets project :“Stocker cattle: Using underutilized grasslands to improve economic viability of the Southern Tier while providing viable careers for beginning farmers.”
Next
• Expected price today• Cost of production: $.60/lb• Select weight(s) you will purchase• Calculate margin:
o Sale wt x price minuso Purchase wt x priceo Cost of gain
Southern Tier Stocker Cattle Initiative
Funded by the New York State Department of Agriculture and Markets project :
“Stocker cattle: Using underutilized grasslands to improve economic viability of the Southern Tier while providing viable careers for beginning farmers.”
To register or for more information contact:Audia Denton
Project CoordinatorStocker Cattle Initiative
Department of Animal Science110 Morrison HallCornell UniversityIthaca, NY 14853
Stocker Short Course – Part II, Fall• September – Choosing the right stocker calf• October – Did the stocker make money in 2018?• November – Fencing and Facilities• December – Receiving cattle and looking to 2019