The graph above is from a recent study and publication led by Tori Marshall, a graduate student in the Department of Agricultural Economics at MSU. Her research used data collected from cattle auctions in Mississippi during 2014-2015 to estimate the impact that pregnancy status has on value.
One of the interesting findings of the study is that pregnant cows or heifers sold at a discount, on average, to open females until they crossed the 5 months pregnant threshold. Females with a calf at side averaged higher than either open or bred females. Retention costs were also considered in a separate graph in the publication to account for the additional costs a producer would incur by holding the cattle longer. The research showed a clear value in knowing whether the cow or heifer is pregnant before selling. Below is a segment from the conclusions
“Mississippi State University research results suggest that waiting to learn the pregnancy status of replacement-quality females at the auction is a pure gamble and reduces expected profit. Producers who opt to pregnancy-check on the farm are better situated to take advantage of improved profits by selecting the best time to sell. Optimal sale timing depends on the producer’s retention costs and the timing of pregnancy check. A producer with relatively low retention costs can optimize profits by selling a cow-calf pair, regardless of when pregnancy is confirmed. However, if retention costs are relatively high, the producer should consider pregnancy checking and selling early in gestation unless the female is later into gestation. If this is the case, just as when retention costs are relatively low, the producer is better off waiting to sell a cow-calf pair. Pregnancy-checking early in gestation also allows the producer to sell immediately if the female is found to be open and, therefore, avoid additional retention costs.”
The sales data were collected in 2014-2015 when cattle prices overall were very high. We expect that the results would be similar today, but at lower price levels.
To view the full (4-page) publication, Click Here.
This post was co-authored by Tori Marshall, M.S. student in Agricultural Economics.