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 Pricing heifers?

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Grassfarmer



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PostSubject: Pricing heifers?   Sun Oct 14, 2012 2:40 pm

I'm getting to the stage where we have some heifers to sell and I'm thinking about a pricing formula that would be fair to both buyer and seller. I always choose which are for sale, they will all be sold with registration papers and will be available anytime from weaning to yearling age FOB farm. Was thinking of using the internet posted market report prices of one of the leading and reputable auction marts. Average feeder heifer market price in week of delivery +$75 premium. I would ask $100 premium but we save $20+ by not going through the auction. How does that sound?
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MKeeney
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PostSubject: Re: Pricing heifers?   Sun Oct 14, 2012 11:41 pm

Grassfarmer wrote:
I'm getting to the stage where we have some heifers to sell and I'm thinking about a pricing formula that would be fair to both buyer and seller. I always choose which are for sale, they will all be sold with registration papers and will be available anytime from weaning to yearling age FOB farm. Was thinking of using the internet posted market report prices of one of the leading and reputable auction marts. Average feeder heifer market price in week of delivery +$75 premium. I would ask $100 premium but we save $20+ by not going through the auction. How does that sound?

very fair; but save yourself long term headaches by dropping the papers on what you sell...you`ll live to regret it if you don`t Evil or Very Mad Smile
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Grassfarmer



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PostSubject: Re: Pricing heifers?   Mon Oct 15, 2012 12:08 am

Why should it give me headaches if I'm selling them at these prices? no unreasonable expectations need accompany them because they are papered. The breed secretary works for nothing so it's not like I'm feeding a whole useless bureaucracy Smile
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MKeeney
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PostSubject: Re: Pricing heifers?   Mon Oct 15, 2012 5:56 am

Grassfarmer wrote:
Why should it give me headaches if I'm selling them at these prices? no unreasonable expectations need accompany them because they are papered. The breed secretary works for nothing so it's not like I'm feeding a whole useless bureaucracy Smile

for starters, because you lose control of your genetics and what is done with them, and what is said about them...the registered mentality is more likely to promote them greater than they are...
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PostSubject: Re: Pricing heifers?   Mon Oct 15, 2012 6:14 am

MKeeney wrote:
Grassfarmer wrote:
Why should it give me headaches if I'm selling them at these prices? no unreasonable expectations need accompany them because they are papered. The breed secretary works for nothing so it's not like I'm feeding a whole useless bureaucracy Smile

for starters, because you lose control of your genetics and what is done with them, and what is said about them...the registered mentality is more likely to promote them greater than they are...
but then again, if you are a breed organization making money off registration fees........ Smile Smile
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Grassfarmer



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PostSubject: Re: Pricing heifers?   Mon Oct 15, 2012 2:20 pm

Surely you "lose control of your genetics and what is done with them, and what is said about them" whether they have a piece of paper attached or not? I see the danger that you guys are talking about with regard to the Angus Association or likely most big breed Associations. However I think you can manage the risk in a breed like ours. Ours was set up as a different breed - to serve commercial cattlemen and for the first 30 years of it's existence in Scotland it was essentially that - a commercial breed based on population genetics not individuals. All those years the heifers sold in the annual breed sale had their registrations published in the catalog but they were sold in 2s or 3s usually matched on colour and size. I've seen them sold in 6s with gate run choice on 2 or more. Nobody was trying to identify high flying individuals - because lets face it the buyers couldn't pick on visual characteristics which one would reach 20 versus 8 year old which is the only real type of "high flyer" you get in a maternal breed. All the high flyer picking going on now in the breed is based on traits that are antagonistic to maternal values - eg muscling, growth, frame size. Showing was banned from the outset which helps deter the playboys with outside money.
The system worked fine until the breed as a whole experienced a huge demand upsurge which led to higher prices which drew in the schysters. I see now that they are heading down the very same road that you folks talk about with Angus all the time.
That's why I'm looking for a pricing formula to market heifers. If we stick to private sale, commercial based, commercial priced cattle we can deter the people we don't want because they won't be interested in what we are doing. We can have a breed that operates on the philosophy that the posters on this forum share. There is no reason why it can't be done with the cattle still being registered. At the end of the day this is not like a long term breeding decision though. If circumstances change and ours becomes the go-to breed in North America I can still choose who I sell to and I can still put the papers in the garbage at any point.

Canadian Luing - the no shyster allowed breed Smile
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MKeeney
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PostSubject: Re: Pricing heifers?   Mon Oct 15, 2012 10:31 pm

true...papers don`t create shysters, success creates shysters ...I wish many shysters upon you Grassy Smile
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PostSubject: Re: Pricing heifers?   Mon Oct 15, 2012 10:43 pm

Now Ian there is another way you could do this. you could say you sold them to a young man just starting out for $1200.00 ea and you could explain to the poster's here what a wonderful thing you did, and we could proclaim you a saint for your wonderful deed. cheers cheers But then If you did that the entire board would crucify you as a pompous ass. Twisted Evil Twisted Evil
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Grassfarmer



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PostSubject: Re: Pricing heifers?   Tue Oct 16, 2012 3:02 pm

I don't follow you WT. I was fishing for ideas of what other people base their pricing on rather than fishing for compliments.
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PostSubject: Re: Pricing heifers?   Tue Oct 16, 2012 3:33 pm

Grassfarmer wrote:
I don't follow you WT. I was fishing for ideas of what other people base their pricing on rather than fishing for compliments.

just being sarcastic Ian Not good timing. your heifers as i see them are worth $1200.00 as repalcements as there quality would indcate. If i were in the market i would pay that for quality and uniformity. And as far as papers the Luining breed has so few numbers that i would probably register them. But JMO.


Last edited by W.T on Tue Oct 16, 2012 4:29 pm; edited 1 time in total
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PatB



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PostSubject: Re: Pricing heifers?   Tue Oct 16, 2012 4:04 pm

Take the price of what they are worth for beef/feeder cattle and add what ever you think the aggrevation of papers and your genetics are worth and you have a fair price. Very Happy
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Grassfarmer



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PostSubject: Re: Pricing heifers?   Tue Oct 16, 2012 7:31 pm

No offense taken WT. How did you come by the $1200 figure though? The average auction price of 5-6 weight feeder heifers last week at the auction I mentioned was $1.40 so say they wean at 550lb and we sell them that day my price would be $845. That's a long ways from $1200. $1200 would get me into the territory that I'd be worried they wouldn't live up to expectations - papered or not.
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Tom D
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PostSubject: Re: Pricing heifers?   Tue Oct 16, 2012 9:07 pm

$500 plus $50 per month of age for heifers

$500 plus $100 per month of age for bulls

Just a thought that I had while on the skidsteer today. Not backed up by anything and subject to change at any moment.

TD, horrible salesman
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MKeeney
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PostSubject: Re: Pricing heifers?   Tue Oct 16, 2012 9:59 pm

Sell the heifers for steer price...if you can Smile
the formula

a=heifer wt
b=heifer commercial price/lb
c=heifer/steer price differential...current market .05/lb
d=steer/heifer weight differential...standard 105%

$=heifer price

a x [b + c] x d =$

550 lb heifers commercial price 1.40
the steer mates
weigh 577.5 @ 1.45= 837.38

unless of course, you have a rare and unique bull that is siring heifers 73 lb heavier than your bulls/steers...in which case, I wouldn`t dare sell the heifers for anything but feedlot/slaughter, because differentiation of the characteristics between male and female is an early sign of what kind of cows a bull will sire...
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Grassfarmer



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PostSubject: Re: Pricing heifers?   Tue Oct 16, 2012 10:51 pm

Good ideas - Tom yours makes sense but I am trying to get something that's a longterm plan and doesn't have to change with the ups and downs of the cattle cycle. Hence when do you change the $500 to $600 or to $400?
Mike's formula is maybe exactly what I was looking for. I note how his conclusion was only $8 different to my suggestion. However when I looked back at the market report I see there is a 15c/lb price differential between steers and heifers - I don't know if there is always that much difference between sexes compared to yours. That would put them up to $895 to equal steer price.
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PostSubject: Re: Pricing heifers?   Tue Oct 16, 2012 11:10 pm

just checked the market; running at least $10/cwt difference here....wasn`t that much until recently...starting point; drop the 5% weigh premium

steers 500-600 lbs 138.00-150.00

heifers 500-600 lbs 124.00-138.00;
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PostSubject: Re: Pricing heifers?   Tue Oct 16, 2012 11:21 pm

1200.00 was the avg at a red angus sale and those were 9 month heifers and they were registered but then there is the added value becaus they were yours Laughing And the added value of the BS with the paper work . and that is what I paid for some last January maybe a bit high but they were local and no freight was charged. But then maybe you could make some young man a deal that you could both live with. Cool
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Grassfarmer



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PostSubject: Re: Pricing heifers?   Tue Oct 16, 2012 11:22 pm

That's interesting ours are quoted as:
Steers 500 - 599 140 - 168 to average 156
Heifers 500 - 599 130 - 144 to average 140
on 5500 head

So are your feeders trading substantially cheaper than last year due to drought/corn prices? I'd say the steers here are 10c down on last year, heifers about 5 cents.
The XL ecoli recall and plant closure has hit our feeder values a little - more so cows.
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Bob H



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PostSubject: Re: Pricing heifers?   Wed Oct 17, 2012 6:52 pm

It should be interesting to watch in the next year or two if the drouth ends what a maternal heifer will be worth. I sure would not price them by the lb but by the head. My quess is that the could bring $1500 dollars per hd at breeding time if it has been a wet winter. Bob h
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PostSubject: Re: Pricing heifers?   Wed Oct 17, 2012 7:06 pm

I think you are dead on there bob $1500.00 is a very real price in Feb for heifers. If there is any storms in Dec and Jan.
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Grassfarmer



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PostSubject: Re: Pricing heifers?   Thu Oct 18, 2012 12:05 pm

But isn't that getting back to speculative pricing based on what the market might pay rather than being based on the worth of the animal - kind of like the purebred game? What happened to "enough"? If I was forking out $1500 for an open yearling heifer I'd sure have high expectations of it.






?
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Bob H



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PostSubject: Re: Pricing heifers?   Thu Oct 18, 2012 12:39 pm

I do not think that it is about value it will be about supply and demand after all of the drouth in the US.
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Bob H



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PostSubject: Re: Pricing heifers?   Thu Oct 18, 2012 12:43 pm

One other thought about a heifer she is worth 1.50 fat next Dec if she is natural and with the Sept corn at 6.50 she will probably gain for 1.30 to 1.40 so she is worth 1.50 leaving the ranch weighing 9 or $1350 for a feeder heifer. Bob H
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Grassfarmer



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PostSubject: Re: Pricing heifers?   Thu Oct 18, 2012 5:20 pm

But couldn't all the purebred BS be deemed supply and demand? the $40,000 flush cow the $20,000 bull? Hasn't it got to be about value based on genetic potential to the commercial cattle if we are going to be any different?
I know we operate in vastly different spheres of the industry Bob with your understanding of futures and hedging and all but aren't those figures you are throwing out wildly optimistic? If a 9 weight feeder heifer is really going to be worth $1.50 why are the 5 weight heifers at Mikes auction only $1.24 - $1.38? scratch
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PostSubject: Re: Pricing heifers?   Thu Oct 18, 2012 5:47 pm

Grassfarmer wrote:
But couldn't all the purebred BS be deemed supply and demand? the $40,000 flush cow the $20,000 bull? Hasn't it got to be about value based on genetic potential to the commercial cattle if we are going to be any different?
I know we operate in vastly different spheres of the industry Bob with your understanding of futures and hedging and all but aren't those figures you are throwing out wildly optimistic? If a 9 weight feeder heifer is really going to be worth $1.50 why are the 5 weight heifers at Mikes auction only $1.24 - $1.38? scratch


Because there ain't no stinkin' feed available now....or cheap feed.......but next will be better by golly and you can sit in the sun and watch the grass grow and the lambs frolic in the meadow while Lenny feeds alfalfa to the rabbits and George takes a nap.



Bootheel, tell me about the rabbits George
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