TLH - Newsletter (englisch) Used courtesy of Dickinson Cattle Co. USA
Appraisal Values - Know Texas Longhorn Values
DCC Ranch e-News #214 - 6-23-20
by Darol Dickinson
In the 2016 Hudson/Valentine Stock Yards Sale, Lazy J's Bluegrass fetched a final bid of $49,000. He was consigned by Lazy J Longhorns in Kansas and purchased by John Viskup of Oklahoma. Is that the established appraisal value of a really nice Texas Longhorn steer? It certainly was on that day.
The Hudson/Valentine organization had promoted Lazy J's Bluegrass on TV and the front page of the Fort Worth Star Telegram, as well as in all the Longhorn publications and every type of media. With the recognition of this steer as the reigning Guinness World Record for wide horns, everyone came to bid who wanted to own the widest, prettiest, spotted, and most impressive steer in the world.
Is $49,000 the market price for a very nice Texas Longhorn steer? Just the following month, right up the road at the Decatur Livestock Market, a really nice steer sold for $955. Both sale managers would say that was the going market price on that particular day. Is this confusing? If it isn't confusing enough, one might think Kim Kardashian is anemic.
Texas Longhorn appraisal values are not easy. A lot of factors are involved.
Dozens of times every year I get calls from people who ask what their Texas Longhorns are worth. I can't answer that question, but this article will help everyone know the value of their own cattle. Appraise your own cattle -- not with one up-or-down auction price but with a current average of hundreds of similar cattle.
At a Texas Longhorn sale a few months ago, 7 of the first 10 lots were “pass-outs,” or no bids. What does that mean? People ask, “How was the market at a certain sale?” One sale will be high and another low. Does that mean the market is surging forward or tanking? What if several sales are all held during the same few days and dividing up the buying clients? What if the cattle are very high quality and promoted brilliantly like the Hudson/Valentine sale? Still a little confusing? Watching poorly or well-managed sales is no way to identify appraisal values. It can be more of an appraisal of the auction management than cattle values.
APPRAISAL RECOMMENDATION: At Dickinson Cattle Co (DCC), 90% of all cattle and semen are sold on-line with complete data, weights, measurements, photos, full pedigrees, and prices. Last breeding season, 559 cows were turned out with DCC bulls. From that number, about 500 calves were born, giving DCC about 500 cattle to sell. Each year that number is renewed by more births. About 200 calves are selected annually for meat product sold in the ranch store, and 70-85 prospective young herd sires are sold each year. Exhibition steers and cow/calf pairs are always available with a choice of prices and bloodlines. These total numbers compare with five to seven Texas Longhorn auction sales. This private selling process happens over and over every year.
This is how it works. DCC prices are posted for each critter. If they are priced economically, they sell right away. If they are priced above the going market, they may sell slowly, or the price may be lowered to fit the current value range. Older cattle are priced lower. Young, very promising breeding stock that have national high values are priced accordingly. Amazingly, everything sells in a few days or just a few months. DCC determines values by a wide variety of buyers who are all real – no auction "pass-outs," no "accidental" bids. If appraised prices on the DCC list are too high, the cattle do not sell. If they are too low, the cattle are purchased and removed quickly. Fact is, DCC prices are right in the middle. The really good thing, no one raises your bid.
THIS IS HOW TO DO IT: Texas Longhorn cattle are appraised by conformation, age, horn length, weight, disposition, price, color, and pedigree. To appraise your own cattle, select something compared to your desired age, sex, and type from the DCC inventory sale list. If your animals are larger or smaller, that have better conformation or less, etc., use the DCC inventory as a base measuring stick to reduce or add to your own cattle’s appraised value. It isn’t perfect, but you will be very close to a current proven market sampling.
Here’s more detail: some owners have cattle that lack documented pedigrees. Those unregistered cattle are referred to as "grade" cattle. Their appraisal value is for producing beef, or for their sale value by the pound in a generic auction, or for ground beef product. Don't compare registered cattle values to non-documented cattle.
Salvage value cattle are on their last leg. Their owners believe that their only and last value is for meat. These cattle can be liquidated wholesale at a generic auction for 30-90 cents a pound -- that is wholesale. These same cattle will yield an average of 34% lean trim with ground beef selling at retail for $7.50 per pound. Their wholesale value on the hoof would be about $400, but retail value for the same animal as ground food product would be about $2400.
WHEN COWS NEED TO GO: Consider a cow that weighs around 1000 lbs. With 34% lean grind multiplied by $7.50 per lb., that is $2550 retail value for ground beef. Processing could cost $450-500, leaving about $2100 profit. When a 1000-lb. cow can net $2100, what is her appraised price? To avoid spending time in marketing retail beef, consider that perhaps something in the $1500 range would be a realistic base. These are real numbers to think about. It is your call with your choice of marketing methods.
SEASONAL APPRAISALS: The price of breeding bulls is highest from March to June. This is the time when many are purchased for the breeding season. They have their lowest value at the end of the season when their usefulness is either over or not needed for another 8 months. Consider this fluctuation of values.
Cows that have been bred are one value. When a cow has a live healthy calf, her price increases with the quality of the calf. When she has a large calf at side and is rebred, she is at peak value as a 3-in-1 package. When the calf is weaned off, she drops back to a bred-cow value. The further a cow is from calving, the less the fetus is worth. Going into winter, cow prices may be lower. After the cost of wintering, value increases as green grass becomes abundant. A cow preg checked positive is of more value than one “exposed” to a bull.
This article on appraising started with steers. Let's wrap up with steers. On the DCC Exhibition Steer sale inventory, steers with over 100" horn that project to mature at 125" or better are priced up to $11,000. Prices for a young steer start in the teens for one with excellent horn blood that may become a huge exhibition steer. A current yearling, for example, is listed at $1200. Every animal has a printed weight, measurement, and full pedigree. Age, horn shape, size, and color are all important with exhibition steer appraisal value. Cattle for sale without valid data have a big reduction in value.
Every appraisal has a bottom line value. A steer that weighs 1880 lbs. like "Shot of Jubal" will yield lean trim of 639.2 pounds, which would retail at $7.50 per lb. and net $4794. Consider adding to that a taxidermy mount with a retail value of $5500 -- and that brings the total to $10,294. The cost above salvage of Shot of Jubal is $706 to look out the window and see a beautiful steer in your very own pasture.
Below this exhibition steer price, appraisal is solid-value-salvage. Whatever is above salvage is the price of the pride of ownership -- the perceived value of having a unique, beautiful steer in your own front yard. To know what that thrill feels like, ask John Viskup.
* * * * * * *Obviously currency is different in other countries. This article is considering of USA dollars.