Beth Doran,
beef, beef/forage field specialist
Situation
Marketing cattle is rapidly changing. While some cattle are still sold on a
live-weight basis, the majority in northwest Iowa are sold in-the-beef. The
problem with this method of marketing is that true premiums and discounts are
often obscured by an “average” carcass price. Youth currently producing
beef will be selling cattle on a grid marketing system in the future. Hence,
it is important and necessary to teach them how to market using grids.
Response
In 2001, there were 20 pens of cattle (58 head) entered in the O'Brien County
4-H Advanced Cattle Feeding Project. These cattle were sold in-the beef and
processed at Excel Corporation in Schuyler, NE. The 4-H superintendents requested
that I look at what the return would have been had the cattle been sold on the
Iowa Quality Beef grid. Based on the information I presented at a follow-up
meeting, the decision was made to market future advanced cattle on a grid.
During the past three years, workshops were conducted annually to teach the
youth how to select a feeder calf and to understand the factors determining
yield and quality grade. These principles have been put into practice as the
youth have had to select the two animals from their pen with the best carcasses.
These selections were scored and were a part of their total points.
Impact
The real obstacle comes in trying to select cattle that will fare well on a
grid marketing system. In the years of 2001, 2002 and 2003, the percentage of
youth who accurately identified their two best animals was 35, 39 and 32 percent,
respectively. About a third of these youth have developed an “eye”
for high quality and yield grading animals.
Even though this percentage was not extremely high, the youth should not be
criticized for selling their cattle on a grid. It was a positive decision. The
table below is a quick summarization of the years 2001 through 2003.
|
Year
|
No. of
Pens
|
No. of
Head
|
In-the-Beef
Price
|
IQB Price
|
Premium
per Head
|
|
2001
|
20
|
58
|
$114.50
|
$119.29
|
$37.74
|
|
2002
|
23
|
88
|
$102.49
|
$105.02
|
$21.07
|
|
2003
|
19
|
77
|
$127.78
|
$129.70
|
$15.46
|
A total of 62 pens (223 head) have been exhibited in the advanced cattle-feeding project. In each of the three years, the youth benefited or would have benefited by selling their animals on the IQB grid marketing system. Premiums from selling on a grid ranged from $15.46 to $37.74 per head. Over the three years, the average premium would have been approximately $25 per head. These youth are learning that grid marketing can work for cattle that are high cut-ability and quality grading animals.
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