Heifer Price Discount to Steers in Tennessee Calves and Feeder Cattle
Andrew P. Griffith
No 330805, Extension Reports from University of Tennessee, Department of Agricultural and Resource Economics
Cow-calf producers breed cows that then produce bull or heifer calves. Producers then can make management decisions to influence the selling price of these animals in a number of ways. One of those decisions is to castrate bull calves or to leave them intact at the time of marketing. Martinez (2020) provides details as it relates to the price discount for bull calves relative to steer calves in Tennessee. He demonstrates that bull calves are discounted compared to similar weight steers and that the price discount for bulls increases as weight of the animal increases. Similar to bull calves being discounted relative to steer calves, heifers are typically discounted relative to steers. However, the management decisions associated with navigating the heifer price discount is not as clear as turning a bull into a steer. In natural service breeding, where the bull physically breeds the cows, a cow-calf producer can expect half of the calves to be bulls and half to be heifers at birth. One management decision that can be made to increase the number of animals of a certain sex to be born is to use sexed semen in an artificial insemination protocol. However, this may be cost prohibitive for many cow-calf producers. Thus, producers are left to navigate the heifer price discount with approximately half of the annual calf crop. The reason heifers experience a price discount relative to steers is largely associated with feed conversion and lower daily rates of gain, which results in a higher cost of gain for heifers relative to steers (Williams et al. 2002). Thus, buyers of heifers must pay less for the heifers relative to steers to experience similar profitability margins. With the understanding of these reduced efficiencies, cattle producers look for ways to reduce the impact of these price discounts and add value to heifers. Given these typical market characteristics, several ques- tions arise as it relates to heifer price discounts and marketing strategies. Thus, the purpose of this publication is to: 1. Evaluate changes in heifer price discounts to steers in Tennessee by weight class from 2001 to 2022, 2. Compare seasonal heifer price discounts on a monthly basis, and 3. Discuss management decisions that may be beneficial in some circumstances.
Keywords: Livestock Production/Industries; Marketing (search for similar items in EconPapers)
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