A Retained Ownership Program to Aid Value-Based Marketing
Decisions
Russ Bredahl, beef forage field specialist
Situation
A finished cattle-marketing survey, done in 2002 by livestock economists from
Iowa State University, Kansas State University, the University of Nebraska and
Oklahoma State University, estimated that 62 percent of finished cattle would
be priced using a value-based (grid) system by 2006. Very few producers are
aware of how carcass traits affect prices with the variety of grids that are
available or how their cattle might measure up using different grids.
Response
Iowa State University Extension, in cooperation with Midcrest Area County Cattlemen's
Associations, conducts a cattle evaluation program to help cow-calf producers
measure the feedlot and carcass performance of calves they produce and consign
to the evaluation. The feedlot evaluation is carried out at a custom cattle-feeding
lot, which is selected on a competitive basis by directors of the evaluation
program. Carcass measurements are collected by employees of Tri County Steer
Carcass Futurity Co-op. Iowa State University Extension personnel facilitate
feedback of feedlot and carcass performance information to the consignors.
Impact
- Twenty-one cattle producers consigned 94 steers and 77 heifers born after
January 1, 2002 to the 2002-2003 evaluation.
- Participants delivered 171 calves weighing 95,294 lbs. and valued at $79,789.35
on October 1, 2002. After paying all expenses associated with the feedlot
evaluation, trucking, marketing and carcass data collection, payments to consignors
totaled $95,700.16 ($559.65 per animal entered).
- The net increase in value added from retained ownership totaled $15,910.81.
- Participants received feedlot performance updates each time the cattle were
weighed, and got carcass fat, ribeye area measurements and kidney-pelvic-heart
fat percent estimates, as well as carcass weight, quality grade and yield
grade information on each carcass to help guide future marketing decisions.
- Consignors benefited from efficient custom cattle feeding services.
- Feed efficiency; 5.96 lbs. of feed dry matter per lb. of gain
- $35.72 feed cost per cwt. gain (steer and heifer lots combined)
- $47.85 total feedlot costs per cwt. gain (steer and heifer lots combined)
Page last updated:
July 8, 2006
Page maintained by Linda Schultz, lschultz@iastate.edu
