Market price vs. Purebred Sales price

[Showin a Shorty]

I was looking through the results from Kolt's sale this past weekend and I noticed the bulls seemed to sell really low. I sent a shorthorn bull to auction last wed night, he was a Bloodstone x Augusta Pride, it was a hard decision based on his genetics but I did not think he would make a good herd bull for us. He was around 11months old, weighed 1000lbs and brought $1400. Am I missing something? The bulls with pictures in their catalog looked awesome and much, much bigger than 1000lbs. I told dad we should watch them to see what they bring and try to get one but we decided against it because we figured they would be out of our price range. If the prices were correct on the thread I read then we made more off a younger bull to run him through auction...so I guess what all the rambling is asking is if it is really worth raising and trying to sell herd bulls with show cattle genetics?

 

[sue]

You answered your own question !  I watched two Expo sales this past spring that followed exactly what you posted. The breeding type bulls sold very well.

 

[RyanChandler]

Don't think I wasn't tempted to buy those two or three bulls and then just have the local salebarn come pick them up.  There was a little money to be made there-  breeding quality bulls sale good. Average bulls don't.

 

[FriedgesCharolais]

I think there is a chance to make money at any sale you go to because like xbar said the good bulls are going to sell good the average bulls aren't and if you could get a hand full of them average bulls and take them to the sale barn you can probably make 1-200 bucks off of them from what i have seen. Top bull yesterday at the salebarn brought 1.24 for an 1800# bull. Thats dang good money for hamburger!

 

[ZNT]

I would agree also about answering your own question.  Show genetics are not necessarily associated with cattle that make great breeding animals.  Not saying they can't, but in the real world, people are not worried about how much bone and hair a bull can put in their calves, and they sure don't want anything to do with TH and PHA.  People want bulls that will grow, have moderate birth weight so they don't have to baby sit them all calving season, and they want bulls that could have enough maternal ability that keeping heifers is a viable option. 

All that being said, I would say that if a person is careful about the show genetics they inject into their herd, and have a lot of focus on the real world traits in their herd, bulls can be sold successfully.  I would like to think that we have been able to bridge that gap in our herd where cattle can be successful in both the show ring and the real world. 

 

[OH Breeder]

I was at a sale and there were several breed bulls selling. It was a breed sale. There was a butcher at the sale. The bulls that had high BW EPD's and had trouble getting bids a few went his direction CHEAP. I would imagine by Monday few of those were no longer standing.

 

[JimF]

to bring things into perspective on "breeding bull" value in the marketplace no matter where that market is, and the relative value of such a bull by breed, I would suggest that you take a look at the American Angus Association website under sales results - now I am not an Angus breeder but for most folks on this site it might open some eyes to reality, if they even want to admit reality - take a random look at 5 to 10 of those sales and look at the individual sale averages on sales marketing 50 to 300 bulls in various parts of the country- of course the very top end go to seed stock herds but in reality the vast majority go out on commercial cows - for folks that don't want to bother looking, lots of these recent sales average 5,000 to 9,000 - think about that for a moment, $10,000 bulls going out on commercial cows - at some point the market always determines value is how I would answer the question posed by the initial post - folks raising red or roan cattle don't like this, but that is just the way it is - 

 

[RyanChandler]

The market determines perceived value-  imperfect information is responsible for the premiums, thus the market failure,  you're referring to.

 

[chambero]

The market determines perceived value-  imperfect information is responsible for the premiums, thus the market failure,  you're referring to.

Sorry I can't resist.   It's market failure when it comes to shorthorn cattle but the rest of us need to listen to the market when it comes to antibiotic use/hormones, etc?

I think the color discrimination is a bunch of bull also, but the public is just as intelligent worrying about their meat being "Angus" as they are worried about it being "natural".  And that's coming from someone that sells about 135 head of 600 lb "natural Angus calves" to one of the biggest natural beef programs in the country.

These breeding cattle sales are a terrible indicator of what they are worth.  Don't assume for a second those bulls are actually selling that cheap.  I can just about guarantee you they are getting PO'd behind the scenes and taken home.  If not, they are fools for selling them that way.

 

[RyanChandler]

The market determines perceived value-  imperfect information is responsible for the premiums, thus the market failure,  you're referring to.

Sorry I can't resist.   It's market failure when it comes to shorthorn cattle but the rest of us need to listen to the market when it comes to antibiotic use/hormones, etc?

Classic market failure. Information asymmetries create inefficient outcomes in both areas.  With cattle, adverse selection is responsible.  W/ beef, it's more of a moral hazard issue. 

 

[TPX]

If they let bulls sell for under market value then they only have themselves to blame.  Anyone that has ever sold seed stock by auction know that you need to set a floor price to protect yourself from stuff like this happening. 

 

[RyanChandler]

It was a dispersal- to them, it prolly wasn't worth the extra effort

 

[BTDT]

The shorthorn breed is suffering everywhere.  Suffering from over priced heifers that do not breed. Suffering from animals that are so big they require a feed wagon instead of a feed bucket. Suffering from high birth weights that kill cows. Suffering from a few egotistical breeders that have decided they themselves are the breed.  The sales are reflecting that suffering.

Jim F - I doubt if many $10,000 bulls are selling to commercial herds. Yes, the angus sales are averaging 5-9,000, but if you figure in 3-5 head of over inflated sales of $50,000 to 85,000, spread that over 50-75 head then wham, you have your magic number of $10,000 "average" price.  When I figure averages on sales, I usually take the top 2% out and then you end up with a more realistic number. 

In my neck of the woods, good red calves sell as good as good black calves. Bad calves of any color sell bad.  Roan and marble colored cattle do not sell well because (in words of a feeder calf buyer) "nothing good in those clubbie lines. Nothing." Don't kill the messenger because of the message.

 

[chambero]

There really are a lot of 10k registered angus bulls selling to commercial angus herds.  It's not funny money.  When common heifers are brings $2-$3k, it's no big deal for a bull to bring 5x that.

There are plenty of sales you can't hardly touch a good solid bull for $10k right now.  The price of doing business has gone up quickly.

 

[aj]

Mushrush Red Angus in Kansas......as far away from the show ring pixie dust as you can get....yesterday.....the first 10 bulls averagedcclose to 10,000$.

 

[RyanChandler]

Many people take pride in the quality / brand name of their herd bull.  Many times people will pay substantially more than the intrinsic value of the animal just for the mental assurance that they've bought they best they can afford.  If you're retaining heifers, its hard to quantify the additional value a $10k bull brings to your herd versus a $5k bull, but it's probable there's additional value.  If you're selling all your calves and you don't have some prior sale arrangement, you would be out of your mind to spend that kind of money on a herd bull as you can find some pretty unbelievable terminal type bulls for low $3's that will inject as much growth in your calves as your cows can handle.