My View From The Country

$10,000 For A Commercial Bull?

Few in the past would have tried to justify a $5,000 premium for an above-average bull over an average bull, but it can happen fairly rapidly in today’s market.

This bull sale season has seen the highest prices ever paid for top-end bulls. It’s amazing to see commercial producers paying $10,000 and more for top-end commercial bulls. The strength of the top end of these bulls though is reflective of a changing marketplace.

Few in the past would have tried to justify a $5,000 premium for an above-average bull over an average bull, but it can happen fairly rapidly in today’s market. After all, a calving-ease bull that is used for four years and produces one more live calf per year can conservatively create $3,000 or more in value. Throw in an additional 20 lbs. of yearling weight on 100 calves and that adds another $3,000. Feed the cattle out and get a slight increase in carcass weight, percent Choice, and feed efficiency, and the numbers can quickly add up to another $5,000.

Factor in all the interactions that are influenced by superior genetics from better daughters, to shorter calving intervals, to more consistency, uniformity, more longevity and longer productive lives, and the value increase seems almost incalculable. Those numbers don’t even calculate price advantages associated with better genetics.

Breaking It Down: How Much Is A Good Bull Worth?

It’s true that the system doesn’t discount poor genetics enough, or reward superior genetics enough, but even in today’s tight supply situation, we’re seeing price differentials grow. As one producer remarked, “My cattle used to add $30/head in value and I got paid $15/head more. Today those cattle are adding $180 in value, and I’m being paid $50/head for that value. Are we gaining ground or losing ground?”

One thing that is for certain is that producers understand the value differences that are associated with superior genetics. Thus, they’re looking to position their operation for what promises to be a very lucrative time for the industry, and they are investing heavily in securing that future. Reading the sale averages is somewhat misleading, as prices for bulls are up on average, but above breed average bulls are up significantly, while average to below breed average bulls are actually down.

Discuss this Blog Entry 5

Anonymous frim MO (not verified)
on Feb 8, 2013

The problem is that we are focusing so much these days on "the numbers" when looking for bulls. "The numbers" still don't tell whether the bull himself will hold up in pasture/range conditions. $10,000 (or $3000 for that matter) does me no good if the rascal can't breed any cows in December.

Terry Church (not verified)
on Feb 8, 2013

I can understand paying top dollar for a premium bull. One should always be trying to improve the genetics on their herds. This is one of the ways we increase the value of the calves we sell. When paying a high price for a bull, one should figure all the costs involved and how many calves will have to hit the ground before the bull becomes profitable. I believe that once you figure at what point a bull becomes profitable, you will have a better idea of how much to spend for a bull.
Wheather the price of a bull is to high or not depends on the person purchasing the bull and when it becomes profitable with that particular bull.

Anonymous (not verified)
on Feb 10, 2013

The added value of a commercial bull to your herd can only be obtained after you've purchased the bull and see just what he produces. Some steers but mostly heifers from a commercial bull. So at the prices asked today for that bull is bull. You are buying a bull in a poke, so to speak.

Anonymous in Co (not verified)
on Feb 10, 2013

In reply to Anonymous in Mo., that's why you should look at how bulls are developed, how they are fed and choose breeders that have health, nutrition and management practices close to yours. As seed stock breeders, we breed for genetics first and develop ours in as close to the type of environment that our customers do. Ours don't have the same rog than those in a feedlot, but they don't fall apart either. But we find commercial breeders want guarantees - guarantees that if they pay more that they'll never go lame, they won't break themselves, etc. We all have the accidents, bad luck and stuff that happens. It can happen on any level - $3,000 to $10,000. Just have to decide what works for your individual operation and what is important to you.

Anonymous (not verified)
on Feb 11, 2013

100 calves x 20 lbs @ 1.50 =$3000
why are there no feed cost in the last 20 lbs?

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What's My View From The Country?

As a fulltime rancher, opinion contributor Troy Marshall brings a unique perspective on how consumer and political trends affect livestock production.

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Troy Marshall

Troy Marshall is a multi-generational rancher who grew up in Wheatland, WY, and obtained an Equine Science/Animal Science degree from Colorado State University where he competed on both the livestock...

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