Materials and Methods

Sample population—Data describing factors that could affect the sale price of beef calves marketed from 1995 through 2009 were obtained from sale catalogues of a livestock video auction service.^a Information in the written description of each lot of calves in the sale catalogues was recorded, including date of the auction, number of calves in each lot, sex of the calves in each lot, whether the calves had been weaned prior to shipment from the farm or ranch of origin, base weight of each lot, region of the United States for the farm or ranch of origin of each lot, breed description of each lot, frame score of calves in each lot, flesh score of the calves, whether the calves were home raised or purchased, amount of variation in weight among calves in each lot, whether the calves had horns, whether the calves had been implanted with a growth-promoting compound, number of days between the date of auction and date of delivery, whether the calves qualified for inclusion in one of the video auction's certified health programs, whether the calves met the requirements for the video auction's natural program (ie, NAT^b; 2004 through 2009), whether each lot qualified for the video auction's ASV program (ie, VASE^c; 2005 through 2009), whether the lot contained BVD-PI calves^d (2008 and 2009 only), whether the calves qualified for the NHTC program^e (2008 and 2009 only), whether the lot was classified as a progressive genetics lot^f (2009 only), and the price paid for each lot on a cwt basis (1 cwt equals 45.45 kg).

BVD-PI free program—Criteria were established for identifying specific lots of calves as BVD-PI free in sale catalogues. It was required that a biological sample be obtained from each calf in a lot, identified with each calf's identification number, and submitted for testing to a verified BVD screening facility. A BVD-PI free enrollment form also had to be completed and submitted to the video auction service. Lots that contained no calves PI with BVD as determined on the basis of laboratory test results were identified in sale catalogues as BVD-PI free.

NHTC program—To enroll and market calves in the NHTC program, producers were required to have their farm or ranch of origin approved through an initial on-site evaluation conducted by a feedlot with an approved Quality System Assessment program or a USDA-approved program with NHTC verification. Calves had to be obtained from and traceable to approved companies listed on the USDA website and identified with a tag of program compliance that was applied as soon as possible after birth. If hormone growth promotants were used on the farm or ranch of origin, written procedures were required to prevent commingling of NHTC and non-NHTC calves. Calves that qualified for the NHTC program had not been administered hormone growth–promoting implants at any time, and calves that did not conform to this requirement were identified differently than were conforming calves. It was required that records be maintained of all rations fed to calves and the source and ingredients for commodity feeds, premixed feeds, or nutritional products. Suppliers that manufactured commercial products that contained hormone growth promotants as well as products that did not contain hormone growth promotants were required to provide documentation that there was no cross-contamination of NHTC and non-NHTC products in their facilities. Feed mixed at the feedlot was tested periodically to ensure NHTC feed was not contaminated with non-NHTC feed. Shipping and transfer documents, including calving and feeding records, had to accompany each shipment of calves from the premises of the current owner. Carcasses from calves that qualified for the NHTC program were eligible for export and marketing to the European Union.

Progressive genetics program—To qualify for the progressive genetics program, it was required that beef calves had to have been sired by bulls classified by participating seedstock producers as being genetically in the top 45% of their sale offering. Commercial calf producers who purchased the progressive genetics bulls were required to obtain a signed affidavit from the seedstock producer certifying that each purchased bull qualified for the progressive genetics program. Qualified lots of calves from the progressive genetics bulls were identified with a special stamp in the video auction service's sale catalogues.

NAT program—The NAT program had several requirements, including that calves had not been fed or injected with antimicrobials or ingredients that could result in residues in tissues; had not been fed antimicrobial ionophores; had not been implanted with or fed synthetic hormones, growth promotants, or anabolic steroids; and had not been fed feeds containing protein derived from mammalian tissue and that any calves that had received therapeutic treatment were identified and would not be shipped from the seller's farm or ranch without the buyer's permission. The person who sold the calves had to verify that he or she was the original owner of the calves or had to provide a certificate signed by the original owner that attested to the all-natural status of the calves.

ASV program—To enroll and market calves in the ASV program, a beef producer had to select an RFID tag and a database supplier and place an RFID tag in the left ear of each calf before the calves were shipped from the premises of the current owner. Also, each beef producer had to obtain a premises identification number from the state veterinarian's office, if available. When such identification numbers were not available, the name, address, and telephone number of the seller were used as the premises identification. Furthermore, each beef producer was required to maintain a written record of the birth date of each calf or the date the first calf in each calf crop was born and to enter the RFID tag numbers, age of the cattle, and the beef producer's name, address, and telephone number or premises identification number into the national database before shipment from the seller's farm or ranch. The buyer was allowed to retrieve this information from the database provider.

Certified health programs—Calves offered for sale in each auction were assessed to determine whether they met the requirements of one of the livestock auction service's 5 certified health programs (V24,^g V34,^h V34+,ⁱ V45,^j and VPC^k; Appendix). Each lot of calves that was verified by personnel of the livestock auction service as qualifying for a certified health program was identified in sale catalogues by a special stamp that designated the type of program. Calves that did not meet the requirements for a certified health program were allocated to 2 groups on the basis of the information recorded in the vaccination section for each lot in the sale catalogues. The first group (viral-vaccinated calves) consisted of calves that were not in a certified health program but that had been vaccinated against ≥ 1 respiratory tract virus (ie, IBR, PI3, BVDV, and BRSV) before shipment from the farm or ranch of origin. The second group (non–viral-vaccinated calves) consisted of calves that were not in a certified health program and that had not been vaccinated against respiratory tract viruses before shipment from the farm or ranch of origin.

Vaccination and management requirements for each certified health program were designed by and under the supervision of personnel at the video livestock auction service. For all programs, IBR and PI3 antigens were chemically altered modified-live or modified-live virus vaccines, whereas BVDV and BRSV antigens were killed or modified-live virus vaccines. Veterinary approval was required when modified-live virus IBR and PI3 vaccines were administered to calves before weaning because this was not in accordance with label instructions.

Data collection—Data for each year of the study that were used to evaluate the effect of management, marketing, and certified health programs on the sale price of beef calves were obtained for lots that had a recorded sale price and that consisted exclusively of steers or heifers. Data for calves that were not sold, were sold in lots that contained a mixture of steers and heifers, or were from lots of feeder cattle were not included in the study. Calves sold in lots consisting of a mixture of steers and heifers were not included in the analyses because the price of heifers in these lots was totally determined by the price of the steers. Feeder cattle were older and heavier than calves, and all feeder cattle had been weaned (usually for a considerable amount of time) before sale. Thus, the effect of management, marketing, and certified health programs on the sale price of feeder cattle would be expected to differ from the effect on sale price of calves. In addition, almost no lots of feeder cattle qualified for the V24, V34, or V34+ certified health programs. For these reasons, only data for calves were used in the study. Lots consisting of calves that had been weaned but that were not in the V45 or VPC health programs were also deleted from each year of the study to eliminate confounding between weaning and the weaning requirements of these 2 health programs. For each year of the study, a subjective decision was made to include auctions in which the total number of lots of calves and the distribution of those lots in the certified health programs were adequate to support the analysis.

States were allocated to various geographic regions. These regions were the West Coast (California, Idaho, Nevada, Oregon, Utah, and Washington); Rocky Mountain–North Central (Colorado, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, and Wyoming); South Central (Arizona, Kansas, Missouri, New Mexico, Oklahoma, and Texas); and Southeast (Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia). The Northeast region comprised the remaining states in the continental United States; data for this region were excluded from the study because of the small number of lots that originated from those states.

Each lot of calves was categorized into 1 of 3 breed descriptions (English and English-crossbred calves, English-Continental–crossbred calves, and calves with Brahman influence). Scoring systems established by the livestock auction service for frame score, flesh score, and amount of variation in body weight within a lot for use in sale catalogues were used in the study. The body frame of calves in each lot was scored as small-medium to medium, medium, medium to medium-large, medium-large, or medium-large to large. The flesh score of calves in a lot was graded as light, light-medium, light-medium to medium, medium, medium to medium-heavy, medium-heavy, or heavy. Variation in body weight of calves within a lot was categorized as even, fairly even, uneven, or very uneven.

Data analysis—A lot of beef calves was the unit of analysis in the study, and a separate multiple regression model quantifying the effects of independent factors on the sale price of calves was developed for each year of the study through a backward selection procedure⁶ by use of a statistical software program.^l All factors contained in the written description of each lot of beef calves in the sale catalogues that could be accurately quantified or categorized were included in the initial models. To prevent multicollinearity between the linear and quadratic terms for base weight, the base weight of each lot in each year was centered at zero by subtracting the mean base weight of all of the lots for the year from the base weight of each lot. A similar procedure was used to prevent multicollinearity between the linear and quadratic terms for the number of calves in each lot in each year. The quadratic terms for base weight and number of calves in each lot were included in the model because the relationship between change in sale price of calves as base weight and number of calves changed was not completely linear. Inclusion of the quadratic effect of both factors allowed the model to account for the quadratic effect of base weight and lot size on sale price.

Variables included in the initial models were auction date, sex of calf, breed, frame score, flesh score, region of origin, whether the lot was home raised or purchased, variation in body weight in the lot, whether calves had horns, whether calves had received growth-promoting implants, whether calves were part of a certified health program, whether calves were part of the NAT program (2004 through 2009) or ASV program (2005 through 2009), BVD-PI status of the lot (2008 and 2009), whether the lot qualified for the NHTC program (2008 and 2009), progressive genetics status of the lot (2009 only), number of calves in a lot (linear and quadratic functions), base weight (linear and quadratic functions), and number of days from sale to delivery. For frame score, lots that consisted of calves with a medium-large frame were used as the baseline for comparison in 2001. In all other years of the study, the baseline for comparison consisted of lots of calves with a medium-large to large frame. For flesh score, lots classified as medium to medium-heavy were used as the baseline for comparison for all years. The classification of very uneven was used in each year of the study as the baseline for comparison to evaluate effects of variations in body weight on sale price.

At each step of the backward selection procedure, the variable with the largest P value was eliminated from the model. A value of P < 0.05 was used to maintain variables in the model; values of P < 0.05 were considered significant. The lots of calves that were not viral-vaccinated were used as the reference population in each year of the study, and price differentials were calculated for the certified health programs and viral-vaccinated lots in each year by subtracting the least squares mean sale price of the non–viral-vaccinated group from the least squares mean sale price of each of the other health groups. The actual mean sale price for all lots of calves sold in each year of the study was calculated by summing the sale price for each lot and dividing that value by the total number of lots for the year. This value was defined as the base sale price for the year. Price differentials for lots of calves in selected management, marketing, and certified health programs in each year of the study were also expressed as a percentage of the base sale price for that year by dividing the price increase or decrease by the base sale price and multiplying the resulting quotient by 100.

The percentages of lots in the V45, V34, and viral-vaccinated health programs in each year of the study were calculated by dividing the number of lots in a specific health program during a particular year by the total number of lots for that year. The V34+ program was not introduced until 2008, and this health program was combined with the V34 program to calculate the percentages of V34 lots in 2008 and 2009.

Results

Factors affecting calf prices from 1995 through 2009—Data from 120 video auction sales held from 1995 through 2009 were analyzed (Table 1). Date of sale, base sale weight of the lot, quadratic effect of base weight of the lot, sex of calf, region of origin, breed description, number of calves in the lot, and inclusion in a certified health program significantly affected the sale price of beef calves in video auctions every year from 1995 through 2009. In most of the years from 1995 through 2009, the amount of variation in body weight among calves in the lot (12 years), flesh score of calves in the lot (9 years), and number of days between sale and delivery date (11 years) significantly affected price. Frame score of calves in the lot had a significant effect on price in each of 7 years (1996, 2001, 2003, 2004, 2006, 2007, and 2008). Whether calves were home raised or purchased had no effect on sale price in any year of the study.

Date of sale—For the 15 years of the study, sale date for the video auctions used in the individual analyses was between April 7 and November 6. In each year of the study, the highest price for beef calves was paid between June 1 and October 25, and in 10 of the 15 years, the highest prices were paid between June 1 and July 31. The 15 lowest prices paid each year ranged across all sale dates, but in 10 of the 15 years, the lowest price was paid in sales held earlier (May 1 through May 31) or later (September 1 through October 31) in the year.

Base sale weight—Base weight of the lots for the 15 years of the study ranged from 145 to 409 kg (320 to 900 lb). From 1995 through 2002, the mean base weight of calves presented for video auction sales was approximately 245 kg (539 lb), whereas from 2003 through 2009, the mean base weight increased to approximately 255 kg (561 lb). In each year of the study, sale price decreased as the base weight of the lot increased, with price devaluations ranging from $0.70/cwt in 1996 to $11.56/cwt in 2005.

Sex of calf—The price paid for steers was greater than that paid for heifers in all 15 years of the study (Figure 1). This finding was consistent with historical patterns in the beef industry and was expected on the basis of results of other studies.^1,2,5,7 The price differential ranged from $6.74/cwt in 1996 to $10.20/cwt in 2007 and 2009. A comparison of the price differential for calf sex as a percentage of base price revealed a range from 10.9% in 1996 to 6.8% in 2004 (the price differential was 7.4% in 2005 and 9.9% in 2009).

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Price difference per cwt (bars) and as a percentage of base price (diamonds and solid line) for beef steers over beef heifers sold through a video auction service from 1995 through 2009. To perform conversions, 1 cwt = 45.45 kg.

Citation: Journal of the American Veterinary Medical Association 239, 4; 10.2460/javma.239.4.451

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Region of origin—Calves that originated in the Rocky Mountain–North Central region sold for the highest prices in 13 of 15 years, which was followed by calves from the South Central, West Coast, and Southeast regions (Table 2). The price paid for calves that originated from the Southeast region was used as the reference population for each year of the study. The mean price differential paid for calves from the Rocky Mountain–North Central region ranged from $4.97/cwt in 2002 to $10.95/cwt in 2008. Mean differential in the sale price paid for calves from the South Central region ranged from $3.06/cwt in 2003 to $10.35/cwt in 2008, whereas the mean differential in sale price paid for calves from the West Coast region ranged from $1.55/cwt in 2006 to $6.94/cwt in 2008.

Breed description—Price differentials for English and English-crossbred calves, English-Continental–crossbred calves, and calves with Brahman influence were monitored throughout the 15-year study period. The breed description used as the basis for calculation of deductions or increases for other breed classifications was changed between 1998 and 1999; therefore, price differentials represented 2 segments. This change in the reference population had no effect on the least squares means of the individual breed groups and was made so that the regression coefficients (ie, price differentials) were positive rather than negative numbers, which we believed would enhance comprehension of study results among readers with diverse backgrounds.

From 1995 through 1998, English and English-crossbred calves were used as the reference population. During that 4-year period, English-Continental–crossbred calves were assessed deductions of $0.28, $0.62, $1.12, and $0.58/cwt, respectively. During that same period, English-Continental–crossbred calves with Brahman influence were devalued by $1.78, $2.18, $2.91, and $2.63/cwt, and English calves with Brahman influence were priced lower by $2.21, $2.52, $1.95, and $2.61/cwt.

For the subsequent 11-year period (1999 through 2009), calves with Brahman influence were used for determining the base price. For 1999 and 2000, English-Continental–crossbred calves sold for price increases of $2.09 and $2.26/ cwt, respectively, and English and English-crossbred calves sold for price increases of $2.33 and $2.00/cwt, respectively. Also, Angus calves sold for $3.76 and $4.71/cwt more than did calves with Brahman influence for the same 2 years. For 2001 through 2009, English-Continental–crossbred calves sold for price increases of $2.37, $2.19, $2.55, $3.52, $2.55, $4.65, $3.27, $4.42, and $3.25/cwt, respectively; and English and English-crossbred calves sold for price increases of $3.17, $3.46, $3.98, $4.97, $3.62, $6.22, $4.50, $5.78, and $4.39/cwt, respectively.

Number of calves in a lot—During the 15 years of the study, only a few lots that comprised < 50 calves were sold. For the entire study, the mean number of calves in a lot was 121 (range, 116 to 128 calves), and the median number was 95 calves (range, 92 to 100 calves). In each year, buyers paid a slight price premium that ranged from $0.0035/cwt in 1995 to $0.0179/cwt in 2004 for each 1-calf increase in lot size.

Inclusion in certified health programs—In each of the 15 years of the study, beef calves in the V45 and V34 certified health programs sold for significantly higher prices, compared with sale prices for similar calves that were not in a certified health program, had not been administered a vaccine against respiratory tract viruses before shipment from the farm or ranch of origin, and had not been weaned prior to shipment.

Sale prices for calves in the V45 health program were significantly higher in all years of the study than were sale prices for calves in the V34 program or for viral-vaccinated calves. Cattle buyers paid significantly more for calves in the V34 program, compared with prices paid for viral-vaccinated calves, in all years of the study, except for 1999 when the sale prices for these 2 groups were similar. For lots consisting of calves that were not in a certified health program, those that contained calves that received a vaccine against respiratory tract viruses sold for significantly higher prices in all years of the study, except for 2009, compared with sale prices for lots that contained calves that did not receive a vaccine against respiratory tract viruses. The smallest price premium paid for calves in the V45 program was $2.47/cwt in 1995. The price differential for calves in the V45 program increased to $3.35/cwt in 1996 and remained relatively constant from 1996 through 2001, with values ranging from $3.33/cwt to $4.06/cwt for those years (Figure 2). Beginning in 2002, the price differential for calves in the V45 health program increased steadily and reached a maximum value of $8.20/cwt in 2008. In 2009, the price differential for lots consisting of calves in the V45 program decreased to $7.21/cwt. When the price differential was expressed as a percentage of the base sale price for all calves in the same year, the increased value for calves in the V45 health program ranged from 3.7% in 1995 and 2000 to 7.3% in 2008.

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Price difference per cwt (bars) and as a percentage of base price (diamonds and solid line) for beef calves in the V45 certified health program over non–viral-vaccinated beef calves sold through a video auction service from 1995 through 2009. For the V45 program, calves were weaned at least 45 days before shipment from the farm or ranch of origin and administered vaccines against 7 types of clostridia, IBR, PI3, BVDV, BRSV, and Mannheimia haemolytica or Pasteurella multocida (or both) near weaning and administered booster vaccinations of IBR, PI3, BVDV, BRSV, and M haemolytica or P multocida (or both). Non–viral-vaccinated calves consisted of calves that were not in a certified health program and that had not been vaccinated against respiratory tract viruses before shipment from the farm or ranch of origin.

Citation: Journal of the American Veterinary Medical Association 239, 4; 10.2460/javma.239.4.451

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The price differentials paid for calves in the V34 health program ranged from $0.99/cwt in 1996 to $4.68/cwt in 2007 (Figure 3). Similar to results for calves in the V45 health program, the price differential for calves in the V34 program decreased in 2009, compared with the value for 2008. When determined as a percentage of the base sale price for all calves sold in the same year, the increased value for calves in the V34 health program ranged from 1.4% in 1999 to 3.9% in 2007.

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Price difference per cwt (bars) and as a percentage of base price (diamonds and solid line) for beef calves in the V34 certified health program over non–viral-vaccinated beef calves sold through a video auction service from 1995 through 2009. For the V34 program, calves were still suckling their dams when administered vaccines against 7 types of clostridia at the time of branding or at 2 to 4 weeks before shipment from the farm or ranch of origin and also administered vaccines against IBR, PI3, BVDV, BRSV, and M haemolytica or P multocida (or both) at 2 to 4 weeks before shipment from the farm or ranch of origin.

Citation: Journal of the American Veterinary Medical Association 239, 4; 10.2460/javma.239.4.451

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The price differential for viral-vaccinated calves gradually increased from 1996 to 2000, remained relatively constant from 2000 through 2002, peaked in 2003 at a value of $1.85/cwt, decreased slightly in 2004 and 2005, and then increased again from 2006 through 2008 (Figure 4). In 2009, the price differential for this group of calves then decreased sharply to $0.69/cwt. Expressed as a percentage of the base sale price of all calves sold in the same year, the price differential paid for viral-vaccinated calves was the lowest (0.7%) in 1996 and 2009 and the highest (1.9%) in 2008.

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Price difference per cwt (bars) and as a percentage of base price (diamonds and solid line) for viral-vaccinated beef calves over non–viral-vaccinated beef calves sold through a video auction service from 1995 through 2009. Viral-vaccinated calves consisted of calves that were not in a certified health program but that had been vaccinated against ≥ 1 respiratory tract virus before shipment from the farm or ranch of origin.

Citation: Journal of the American Veterinary Medical Association 239, 4; 10.2460/javma.239.4.451

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Patterns for participation of beef calves in health programs during the study—The percentage of the total number of lots consisting of beef calves that qualified for the V45 certified health program increased each year of the study from 1995 to 2004 and then remained constant at approximately 25% for the period from 2005 through 2009 (Figure 5). Participation in the V45 program ranged from 3.2% in the first year of the study to 27.6% in 2009, which represented an increase of greater than eightfold. The overall pattern for participation in the V34 program also revealed an increase in the proportion of lots over time (Figure 6). In 1995, only 12.4% of the total lots sold during the year were enrolled in the V34 program. However, by 2005, > 53% of the total lots sold were calves in the V34 program. This group of calves remained at approximately 50% through 2009. The percentage of lots consisting of beef calves that were not in a certified health program but that had been vaccinated against respiratory tract viruses remained relatively constant from 1995 through 1999, with values ranging from 33.9% to 38.6%. The percentage of lots participating in the viral-vaccinated program increased to 47% in 2000 but then decreased steadily to 4.5% in 2009 (Figure 7). The number of lots and the number of calves in each certified health program for each year of the study were summarized (Table 3).

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Percentage of total lots of beef calves sold through a video auction service from 1995 through 2009 that qualified for the V45 certified health program.

Citation: Journal of the American Veterinary Medical Association 239, 4; 10.2460/javma.239.4.451

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Percentage of total lots of beef calves sold through a video auction service from 1995 through 2009 that qualified for the V34 certified health program.

Citation: Journal of the American Veterinary Medical Association 239, 4; 10.2460/javma.239.4.451

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Percentage of total lots of beef calves sold through a video auction service from 1995 through 2009 that were classified as viral-vaccinated calves.

Citation: Journal of the American Veterinary Medical Association 239, 4; 10.2460/javma.239.4.451

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Variation in body weight—In 1996, 1999, and 2008, variation in body weight had no effect on sale price. For the remainder of the years from 1995 through 2009, lots classified as uneven accounted for price differentials, with values of $0.86, $1.30, $1.48, $1.25, $2.91, $1.31, $1.68, $0.03, $1.79, $1.25, $0.06, and −$0.57 for 1995, 1997, 1998, 2000 through 2007, and 2009, respectively. In 1998, lots classified as fairly even sold for $2.29/cwt more, compared with the sale price for very uneven lots. In 1995, lots classified as fairly even sold for $1.25/cwt more than did very uneven lots. From 2000 to 2007 and 2009, lots classified as fairly even sold for price increases of $1.37, $3.67, $1.82, $2.56, $1.90, $3.13, $2.26, $1.32, and $0.64/cwt, respectively, compared with the sale price for very uneven lots. In 1995 and 1997, lots classified as even brought price increases, compared with sale prices for very uneven lots, of $2.61 and $1.68, respectively.

Flesh score—Flesh score did not significantly affect sale price in 1997, 1998, 2001, 2002, 2008, or 2009. For the remainder of the years from 1995 through 2009, lots classified as medium brought price differentials, compared with the sale price for medium to medium-heavy lots, of −$0.80, $0.22, $1.35, $0.94, $0.50, −$0.17, $1.06, $1.38, and $1.57/cwt for 1995, 1996, 1999, 2000, and 2003 through 2007, respectively. For those same years, lots classified as light-medium to medium sold for price differentials, compared with the sale price for medium to medium-heavy lots, of −$0.69, $1.08, $1.26, $1.23, $1.65, $0.84, $2.37, $2.70 and $1.79/cwt, respectively.

Days between sale and delivery—For 1995 through 2009, the mean time between date of the sale and date of delivery of the calves ranged from 51 days in 1998 to 90 days in 2004. Across the 15 years of the study, the amount of time cattle remained with the seller before delivery to the buyer increased from 60 to 90 days as determined on the basis of the linear regression line created by use of the mean number of days from sale to delivery for each study year (Figure 8). The number of days between date of sale and date of delivery of calves had a slight effect on the sale price of beef calves in every year of the study, except for 1996 through 1998 and again in 2001 when no effect on sale price was detected. The price deduction for the years in which the number of days between the sale and delivery dates had a significant effect on price ranged from $0.010 to $0.0515/cwt for each 1-day increase in 2000 and 2004, respectively.

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Number of days between calf sale date and delivery date for beef calves sold through a video auction service from 1995 through 2009. The line of best fit for the data is indicated. ^*Indicates the years when there was a significant negative relationship between the number of days between date of sale and date of delivery and the sale price of beef calves.

Citation: Journal of the American Veterinary Medical Association 239, 4; 10.2460/javma.239.4.451

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Frame score—For 1996, prices for lots classified as medium, medium to medium-large, and medium-large were devalued at $0.84, $0.86, and $0.67/cwt, respectively. For 2003, 2004, 2006, 2007, and 2008, lots classified as medium had price differentials of −$0.75, −$0.72, −$0.60, −$0.82, and −$0.17/cwt, respectively, and lots classified as medium to medium-large had price differentials of −$0.07, −$0.05, $0.00, $0.06, and $0.41/cwt, respectively. For 2001, prices for lots classified as medium had a deduction of $0.60/cwt, and prices for lots classified as medium to medium-large had a deduction of $0.19/cwt.

Additional factors affecting calf sale price—Enrollment of lots in the auction service's ASV program significantly increased the sale price of beef calves for every year in which the program was offered (2005 through 2009). Other factors (calves with horns and enrollment in the auction service's NAT and NHTC programs) affected sale price in some years of the study but not in other years. Status of a lot with regard to use of growth-promoting implants had a significant effect on sale price only for the first year of the study (1995). Lots consisting of calves certified to be BVD-PI free had sale prices similar to those for lots consisting of calves not in the BVD-PI–free program in both years that the BVD-PI–free program was available. However, there was a nonsignificant increase in sale price for calves in the BVD-PI–free program in 2009. The auction service's progressive genetics program had a favorable effect on sale price for the 1 year (2009) that the program was available.

Age and source—For 2005 (year in which ASV status of a lot was first identified) through 2009, higher prices were paid for lots of ASV calves ($0.52, $1.77, $1.44, $2.14, and $1.58/cwt, respectively). These prices represented increases of 0.4%, 1.4%, 1.2%, 1.9%, and 1.5% over the base price paid for beef calves for the same 5 years.

Calves with horns—Prices paid for lots containing calves with horns were significantly lower in each year from 2000 through 2005 (range, −$0.85/cwt in 2000 to −$1.46/cwt in 2005) and again in 2009 (–$1.39/cwt). The presence of calves with horns had no effect on sale price from 1995 through 1999 and from 2006 through 2008 (Figure 9).

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Price difference per cwt (bars) and as a percentage of base price (diamonds and solid line) for beef calves with horns sold through a video auction service from 1995 through 2009 for the years when the presence of horns had a significant effect on sale price. Notice that the horizontal line represents a difference of $0.00/cwt and corresponds to a value of 0% for the percentage basis.

Citation: Journal of the American Veterinary Medical Association 239, 4; 10.2460/javma.239.4.451

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Use of growth-promoting implants—Implanting calves with a growth-promoting product significantly increased sale price in 1995 ($0.34/cwt) but had no significant effect on sale price in any other year of the study. The percentage of lots sold through the video auction service that had calves with growth-promoting implants decreased over the course of the study from 64.3% in 1995 to 26.2% in 2007 (Figure 10). In 2008 and 2009, the percentage of calves receiving growth-promoting implants remained low (27.2% and 26.5%, respectively).

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Proportion of lots of beef calves receiving a growth-promoting implant that were sold through a video auction service from 1995 through 2009.

Citation: Journal of the American Veterinary Medical Association 239, 4; 10.2460/javma.239.4.451

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NAT program—The NAT program (ie, Certified Natural program) was introduced in 2004. Calves in the NAT program sold for higher prices in 2004 and from 2006 through 2008, with relatively small increases that ranged from $0.34 to $1.40/cwt (Figure 11). In 2005 and 2009, participation in the NAT program did not significantly increase the sale price of beef calves.

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Price difference per cwt for beef calves classified as in the Certified Natural program by the owner or a video auction service and sold through the video auction service from 2004 through 2009. The program had several requirements, including that calves had not been fed or injected with antimicrobials or ingredients that could result in residues in tissues; had not been fed antimicrobial ionophores; had not been implanted with or fed synthetic hormones, growth promotants, or anabolic steroids; and had not been fed feeds containing protein derived from mammalian tissue.

Citation: Journal of the American Veterinary Medical Association 239, 4; 10.2460/javma.239.4.451

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NHTC program—The NHTC program was introduced in 2008, and lots of calves that qualified for this program sold for $2.80/cwt more in 2008 than did similar lots not in the program. The NHTC program had no effect on sale price in 2009.

BVD-PI free—The program that certified lots of calves as BVD-PI free had no effect on sale price in 2008 when the program was introduced. In 2009, the program caused a small but not significant (P = 0.060) increase in sale price ($0.73/cwt), which represented an improvement of 0.7% over the base price paid for calves in the same year.

Progressive genetics program—Data for the 1 year (2009) in which the progressive genetics program was in effect indicated that lots consisting of calves that qualified for the program sold for an additional $0.78/cwt. This represented an increase of 0.8% over the base price paid for calves that did not qualify for the progressive genetics program.

Discussion

Results of the 15-year study reported here indicated that the sale price of beef calves marketed through a livestock video auction service was significantly affected by date within the year of calf sale, base sale weight of calf lots, sex of calf, region of calf origin, cattle breed, number of calves in a lot, and inclusion in a certified health program, which were in agreement with results of another study.¹ Additional factors that significantly influenced sale price were variation in body weight within calf lots (12 years), flesh score of calves within a lot (9 years), number of days between sale and delivery dates (11 years), and frame score of calves within a lot (7 years). The presence of calves with horns in a lot was associated with a significant reduction in sale price in 7 years but had no effect on sale price in the other 8 years. Similar to results reported in that other study,¹ results of the present study principally agree with other published reports^2–5,7–14 in which investigators evaluated factors that affect the sale price of beef cattle sold through traditional auction, video auction, and teleauction markets at various locations throughout the United States.

Investigators have found that sex of calf, calf weight, lot size, health of calves, uniformity of calves in a lot, frame size, breed, and presence of calves with horns all significantly influence prices paid for steers and heifers, regardless of the type of auction in which calves are sold. Analysis of the data for the study reported here revealed that producers have consistently enhanced the market price of their calves by selling crossbred steer calves with a medium or large frame in large lots with uniformity of quality, weight, and breed within the lots. Calves sold for the highest prices were those that had a light-medium or medium flesh score and that were polled or dehorned.¹ One noteworthy difference between video auctions and traditional auctions is that optimum lot size is larger at video auctions because of the inability of buyers to pool video auction lots for shipments and their desire to match lot size with that specified by feedlots.¹³

Similar to results for the 1995 through 2009 video auctions reported here, studies^2,4,8,9 conducted at Kansas State University revealed that Angus calves sold for the highest prices in more recent sales despite selling at lower prices in earlier sales in 1986 and 1987. Data from studies^2–5,8–14 conducted in Arkansas, Georgia, Oklahoma, and California are in general agreement that cattle markets prefer Angus calves, which typically were sold for higher prices than were calves of other breeds. Calves with black and black-mixed hair (perceived to indicate Angus genetics) were also sold for higher prices than were cattle without black hair.^2,5,7,8,12 The preference for Angus calves likely indicates a change in buyer perceptions relative to how the breed type performs in feedlots (eg, gain, rate of sickness, and carcass traits) as well as other factors affecting cattle performance and profitability. A study⁵ conducted in Oklahoma revealed that price differentials for breed may vary slightly by area of the country from which data are collected because black exotic and exotic cattle were valued over Angus and other English breeds in hot, humid southern climates.

Observations from other investigators who analyzed the effect of date of sale on calf prices primarily are in agreement with observations from the 15-year video auction study reported here with regard to the fact that calf prices were typically the lowest during fall months when the largest supply of feeder calves was available.^7,10–12 Preconditioning was cited in 1 study¹⁵ as an opportunity for cow-calf producers to capitalize on the typical seasonal price pattern for feeder calves. By weaning spring-born calves and keeping them for an additional 30 to 45 days, rather than weaning calves at the time of the sale in mid-October, producers could market their calf crop during the period when there are typical seasonal increases in prices paid for feeder calves.^7,15

In the present 15-year video study as well as in other studies, price per cwt decreased as steer and heifer calves became heavier, which reflects differences in expectations about anticipated feeding performance, interest rates, and prices paid for fed cattle.^{1,2–5,7–14} Calf prices decrease as body weight increases because younger cattle grow faster than do cattle approaching slaughter weight; thus, young cattle provide buyers with more potential growth at lower costs. The lower the initial body weight, the more weight the calves could gain for the buyer. Additionally, calves with a lighter body weight offer buyers more management options, including stocker programs, backgrounding, use of wheat pasture, or finishing programs. Analysis of the economic factors accounting for the large variations in year-to-year price deductions for heavier calves was beyond the scope of the present study. In other studies,^2–5,7–14 the price differential between heifer and steer calves was most pronounced at low body weights, but the difference narrowed at heavier body weights. Reasons cited for the price difference at lower body weights reflect problems characteristic of heifers, including reduced daily gains, lower feed efficiency, estrus, unexpected pregnancies and difficult births, and the perception that feedlot heifers are lower-quality animals because the best heifers would be retained as replacement females for the herd of origin.⁵

Observations for the 15-year video auction study on the effects of region of origin on calf prices are consistent with those for an 11-year study in California¹⁴ in which investigators found that when all other factors were equal, ranchers in California and other Western states received lower prices for their calves, relative to the prices paid for calves originating from Midwestern states. Investigators in that study¹⁴ mentioned that this observation was compatible with the theory that average price decreases were more pronounced the farther away the seller was from the Midwest, which is the location of most feedlot, slaughter, and packaging facilities. Thus, transportation costs were cited as the basis of the price differences.¹⁴ However, other investigators have observed that video auction buyers from 4 major cattle feeding areas absorb freight costs on cattle purchased > 322 km (200 miles) from their final destination and markdown purchases of nearby cattle in amounts that exceed estimated transportation costs.¹⁶ Still other investigators mentioned that the direct impact of the region of cattle origin on price may measure quality perceptions of cattle from various regions. According to this theory, if buyers perceive that cattle born in a certain area are of higher quality relative to that for cattle of all other regions, they willingly pay more for these cattle than for cattle from any other region.¹⁷

Research on the effect of the number of days to delivery on the sale price of calves is limited. A team of investigators in 1 study¹³ estimated that the ability to delay shipment would favorably influence the price buyers were willing to pay. The rationale was that certain elements of risk may be eliminated by paying higher prices for calves for future delivery rather than by dealing with the risk of higher-priced cattle in the future. Accordingly, prices paid for calves should increase as the number of days to delivery increases.¹³ To our knowledge, only in the present 15-year video auction study has the effect of date of delivery on sale price been quantified; thus, the accuracy of the observation that the number of days between date of sale and delivery of calves had only a marginal effect on the sale price of beef calves remains to be validated for various marketing channels (eg, video, satellite, telephone, and Internet auctions) that allow for future delivery of purchased calves. The effect of the number of days to delivery on prices paid for calves marketed through traditional auctions is regarded as irrelevant because cattle are usually delivered immediately to buyers on completion of the sale.¹³

Larger-frame calves in the 15-year video study reported here and in other studies^{2–5,7–11,13} have sold at higher prices, compared with prices paid for smaller-frame calves, because the growth patterns and finish weight of larger-frame calves are more acceptable to the cattle feeding and meat processing industries. Price reductions were assessed against smaller-frame calves because of buyer concerns that these calves would be less efficient when placed in feedlots and might not match packer expectations for carcass size and quality, which would result in losses at slaughter. In 2 studies^3,5 conducted at Oklahoma State University, investigators found that both frame and muscling needed to be optimized, rather than maximized, because extremely large carcasses are often marked down as a result of being too large for efficient handling in most beef processing, fabricating, and merchandizing procedures.

In several other studies^{2–5,7–11,13} and in the present video auction study, price per cwt increased as lot size increased to truckload sizes (approx 22,727 kg [50,000 lb]). This was attributed primarily to more efficiency and less cost for shipping, more efficiency for filling of pastures and pens, isolation of calves with health problems, and reductions in associated medication costs. For stocker and feedlot buyers, multiple-calf lots were associated with fewer management problems at time of placement in a feedlot, better nutritional management, and increased future marketability.

In other studies,^2,3,5,8,9,13 uniformity (quality, body weight, and breed) within lots favorably influenced the price buyers were willing to pay for feeder calves because postsale sorting costs were reduced and production and feeding efficiency increased. However, lot uniformity did not have a significant effect on prices paid for heavyweight heifer calves in 2 studies^2,9 conducted at Kansas State University.

Observations from the current video auction study on the value of calves with a flesh score of light or medium were in agreement with findings of several other studies^2,3,5,7–9 that found that buyers generally do not want calves with a high flesh score (ie, they prefer calves with less flesh that have the ability to gain weight at a low per-weight unit cost of gain). In 2 studies^2,9 conducted by investigators at Kansas State University, seasonal variation in buyer preferences was detected. In those studies^2,9 steers and heifers classified as very thin were sold for lower prices than the prices paid for steers and heifers in average condition in fall sales but were sold for prices that did not differ significantly from the prices paid for steers and heifers in average condition in spring sales. The rationale was that buyers in the fall perceived cattle with average condition to be in sufficient health to survive and grow during the winter, whereas thin and very thin calves were viewed as potential health risks.^2,9

The presence of calves with horns consistently has been associated with lower prices in other studies,^2–5,7–13 which was also found in 7 of the 15 years in the video auction study reported here. Analysis of results for studies^2–5,7–13 conducted from 1981 through 2010 suggests that buyers pay lower prices for calves with horns because of concerns about an increased risk of injury in confinement, handling difficulties, worker safety, and extra space cattle with horns occupy at feed bunks. Investigators in 1 study⁵ mentioned that removal of large horns at packing plants results in open sinuses in the head and that debris from a hide might fall into those sinuses, which could lead plant inspectors to condemn the head (up to $50.00 devaluation/head).⁵ Additional devaluations associated with the presence of feeder calves with horns also have been identified in National Beef Quality Assurance audits conducted in 1991, 1995, 2000, and 2005. According to these audits, cattle with horns are one of the principal causes of bruising that has been estimated to annually cost the beef industry > $22 million ($0.75/fed steer and heifer) in carcass trim at processing.¹⁸

Of the management, marketing, and health programs introduced by the video auction service since 2004, only the ASV program favorably affected the sale price of beef calves for every year in which the program was offered (2005 through 2009). Similar observations were made in a study¹⁴ in California in which calves enrolled in an ASV program were sold for a higher price (mean, $5.31/cwt) for the period from 2005 through 2007. Although 62.5% of calf lots in the study in California¹⁴ were enrolled in an ASV program in 2005, participation in the ASV program decreased to 15% in 2007.

The video auction service's NAT and NHTC programs were associated with increases in sale price in some years but not in others. The BVD-PI–free program nonsignificantly increased sale price in 2009 and did not affect calf prices in 2008. The progressive genetics program had a significant, albeit slight, positive effect on sale price, but the program was offered only during the final year of the study and its long-term effect on price likely requires further evaluation. Similarly, additional evaluation is needed to determine the effects of the NHTC and BVD-PI–free programs on sale price. More time is needed to assess whether these new value-added programs reflect buyer preferences within the competitive feeder calf market.

In the aforementioned study¹⁴ in California, investigators also evaluated effects of an NAT program on the sale price of feeder calves and yearlings sold from 1997 through 2007. Cattle that met the program requirements (no growth-promoting implants, antimicrobials, ionophores, or growth hormones) were typically sold for an increased price, but the increase was larger for yearlings than for calves. The percentage of calf lots participating in the California NAT program grew slowly from its introduction in 1999; participation was 13% in 2003 and then increased rapidly to 38% in 2007. Coincident with this development was a decrease in the use of growth-promoting implants (40% of calf lots in 1997 but only 14% of calf lots in 2007),¹⁴ which is consistent with results for the 15-year video auction study reported here. Other investigators have determined the effectiveness and profitability for the use of growth-promoting implants in feeder calves. For example, the author of 1 study¹⁹ found that implants in suckling beef calves increased average daily gain by 0.045 to 0.064 kg/d (0.10 to 0.14 lb/d) and weaning weights by 9.1 to 11.4 kg (20 to 25 lb), which represented an improvement of approximately 6% in daily gain. Optimum response required that the implants used achieved production objectives.¹⁹

Analysis of results of the 15-year video study reported here also revealed that the V34 and V45 certified health programs increased the sale price of beef calves in each of the 15 years of the study, compared with sale prices for similar calves that were not in a certified health program, had not been administered a vaccine against respiratory tract viruses prior to shipment from the farm or ranch of origin, and were not weaned prior to shipment. When all other factors remained constant, the price differentials for calves in the V45 program ranged from $2.47/cwt to $8.20/cwt, whereas the differentials paid for calves in the V34 program ranged from $0.99/cwt to $4.68/cwt. The higher prices paid for calves in the V45 program, compared with the prices paid for calves in the V34 program, were expected because the booster vaccinations required for the V45 program would likely provide calves with an enhanced degree of immunity against BRD and clostridial pathogens and the 45-day period after weaning would likely better prepare calves for the stresses associated with transportation and adaptation to a new environment.

Price differentials for calves in the V45 and V34 certified health programs escalated over time on an actual dollars-per-cwt basis and as a percentage of the base market price, with maximum values in 2008 and 2007, respectively. These price increases were recorded during the same time that the supply of calves in each of the certified health programs increased. Data analysis indicated that cattle buyers likely achieved favorable results feeding calves enrolled in these 2 health programs and continued to place increasing value on the V45 and V34 programs. The reason for the lower price differentials paid for calves in the V45 health program in 2009 cannot be determined. The mean unadjusted sale price of beef calves for the 2009 video auctions was $103.14/cwt, which was the lowest price paid for beef calves in the video auctions since 2003.²⁰ The mean base weight, lot size, and number of days between sale and delivery date in 2009 were all within ranges for these variables reported in previous study years.

During the 15-year study period, price increases for viral-vaccinated calves peaked at $2.20/cwt in 2007, and the highest percentage over base sale price achieved for calves in this group was 1.9% in 2008. Both the price differential and the percentage over base sale price for this group of calves decreased steeply in 2009, but the reason or reasons for this decrease are unknown.

In the 2006 video auction study,¹ the ASV program introduced in 2005 was reported to result in a modest price increase of $0.52/cwt (0.4% over base price). At that time, we proposed that because of the improved exchange of information among various segments of the beef production industry as a result of the ASV program, there would also likely be an increase in the value of preconditioning or certified health programs in the future. That conjecture has been realized because higher prices were paid for calves in the ASV program for the ensuing 5 years, with increases ranging from 0.4% to 1.9% over the base price during that same period.

In preparing the initial video auction report of 2006,¹ we cited studies^21–24 in which preconditioning or certified health programs administered at the farm or ranch of origin resulted in a decrease in morbidity of beef calves in feedlots. In addition, calves that remained healthy in the feedlot had carcasses with improved quality grades.^22,25–35 We hypothesized that as increased numbers of feedlot cattle were sold through value-based marketing, the value of preconditioned calves or calves in certified health programs would also increase.¹ Results of the present study and other recently published studies^7,14 provide additional evidence supporting the validity of that initial assessment. During the 15 years of the present study, there were large increases in the percentages of lots consisting of beef calves in the V34 or V45 certified health programs. Factors contributing to increased enrollment likely were the higher prices paid for calves in the health programs and the ongoing promotional efforts of personnel affiliated with the livestock video auction service. The decrease in the percentage of cattle that were not viral-vaccinated calves initially reported in the 2006 study¹ continued in the study reported here for the period extending from 2006 through 2009. Only 1.5% of the lots marketed through the video auction service in 2009 were not vaccinated with a viral vaccine on the farm or ranch of origin. This large decrease in the percentage of cattle that were not viral-vaccinated calves (from 43.7% in 1995) was attributable to beef producers incorporating a certified health program into their management plan or to producers reporting to the livestock auction service the viral vaccines that were already being used at their operations so that this information could be included in the written description of those calves in the sale catalogues.

Determining whether preconditioning or certified health programs at the farm or ranch of origin is profitable for beef producers is beyond the scope of the study reported here. However, because the present study provides additional evidence that price increases have been paid for beef calves in the V34 and V45 health programs sold over the course of a 15-year period through a single video auction service, the values may be useful to beef producers and veterinarians during evaluation of potential economic returns for preconditioning or certified health programs.

Data from the livestock video auction service provided several advantages in quantifying the effect of certified health programs on the sale price of beef calves. First, the vaccination and management requirements of each certified health program remained the same for all 15 years of the study. This uniformity afforded cattle buyers time to become familiar with the certified health programs and provided feedlot operators the ability to evaluate the feeding performance and carcass characteristics of calves enrolled in the health programs. Second, study data were based on a large number of lots comprising beef calves sold through a single marketing channel. Because of the written description of each lot in the sale catalogues and the video presentation of the cattle during the video auctions, every potential buyer had access to similar information on each lot of calves. Additionally, the data used in the study reported here represented cattle from every geographic region of the continental United States, except the Northeast. Because cattle buyers from any location in the United States could purchase calves through the video auctions, the prices paid for calves in the certified health programs presumably reflected the value of these programs to cattle buyers throughout the United States.

One limitation of the study is that results cannot be directly applied to smaller beef production operations that sell calves through more traditional auction markets because the data reported here represented feeder calves from comparatively large operations sold through a video auction service. Primarily for practical considerations, calves sold through the video auctions were delivered from the farm or ranch of origin to the new owners and required producers to sell truckload-sized lots that consisted of an overall mean of 121 calves/lot for all years of the study.

Results of the study reported here affirmed results of the 2006 video auction study¹ in that the V34 and V45 certified health programs consistently increased the sale price for beef calves, the largest price differentials were paid for calves in the V45 program, and the price differences paid for calves in both programs increased during the 15 years of the study. Data analysis also indicated that in most years, beef producers can further increase the sale price of their calves by providing large-frame, lightweight calves with a light to medium flesh score; increasing the number of calves in each lot; dehorning calves; and sorting calves into lots with uniform weights. As acceptance of electronic identification tags and source verification becomes more widespread and as more cattle are sold through value-based systems, the economic benefit of preconditioning or certified health programs may also increase. The NAT and NHTC programs increased the sale price in some years of the study but had no effect on sale price in other years, whereas the BVD-PI–free program slightly improved the sale price in 2009; further appraisal is necessary before assigning a value to these programs. Additional data also need to be collected and analyzed to determine the effect of date of delivery on sale price and whether the favorable effect of the progressive genetics program on sale price in 2009 will continue to add value to calves marketed through the same livestock video auction service.