Determinants of prices for purebred beef bulls Determinants of prices for purebred beef bulls

for 1651 bulls sold at 26 Kansas purebred beef sales during 1993 wer e collected and analyzed to determine which factors affected price differentials for beef bulls. Bull sale price varied, from $650 to $20,000 per head. Regression analysis was used to determine the price differential associated with bull traits and marketin g factors.


Introduction
The value of a breeding bul l is determined by its expected value in production.Bull sale prices vary considerably, and n umerous physical and genetic characteristics contribute to that variation.Additionally, reputation of the seller impacts sale price.The large number of bull attributes t hat must be considered make it difficult for bull buyers and sellers to determine the market val ue of individual bulls.Our objective was to determine the relative impact of individual physical attributes on sale prices of breeding bulls .Buyers can use this information to make more informed p urchase decisions, and producer s can use these results to better target their production and marketing.

Experimental Procedures
Sale price, physica l characteristics, genetic information , and marketing factors were collecte d on individual animals from 26 purebred beef bull sales in Kansas during spring, 1993.The data set included 1700 bulls representin g seven breeds.
Because of incomplet e data, 1651 observations were retaine d for analysis.The data set included Angus (46.5%),Charolais (12.4%),Gelbvieh (14.4%) , Hereford (7.5%), Limousin (3.6%), Red Angus (4.4%), and Simmental (11.2%).Individua l bulls were evaluate d at the time of sale and assigned a rank of 1 (poor) to 5 (excellent ) with respect to conformation, muscling , structural correctness, and disposition.O ther information recorded at the time of sale were sale order, breed, lot, horned status, color, age, an d price.Performance information was obtained from sale catalogs, although informatio n printed in the catalogs varied among sales.
Physical and genetic characteristic s considered were actual birth weight , birth weight EPD, adjusted weaning weight , weaning weight EPD, and milk EPD.We also noted from sale catalogs whether semen was retained and whether the bull was pictured in the catalog.
Regressio n analysis was use d to determine the relative value of each piece of information on a bull's sale price.This procedure enabled us to allocate the enti r e price paid for a bull into values of individual attributes.

Results and Discussion
Bull sale prices ranged from $650 to $20,000 and averaged $2308.70 per head.Averag e birth weight was 85 lb and average adjuste d weaning weight was 652 lb.Bulls average d 450 days of age with, a range of 298 to 1136 days.On average , 8% of the bulls were pictured in the catalog.Roughly 1% of bulls had at least some proportion of semen rights retained by the seller.Numerou s factors were statistically important in explaining bull price differentials.After adjusting for all other attributes, no significan t differences were found in prices between breeds.However, bull color was a significan t price determinant.Black Simmentals , Gelbvieh, and Limousins brought premium s ranging from 15% to 53% over their nonblack peers.This is consi s tent with previous K-Stat e studies indicating that black feeder cattle brought market premiums.Polled bulls brought premiums of 10%.Bull conformation was more important than muscling, structural correctness , and disposition with price premiums of 7% associated with each unit increase in conformation score.
Historically, bulls often h ave been sold as 2year-olds, but the beef industry has shifted to greater use of yearling bulls.This is confirmed by the fac t that 79% of the bulls sold were less than 18 months old.Age had a nonlinear effect on bull prices, indicating that buyers paid a premium for olde r bulls but at a decreasing rate (Figure 1).Two-year-old and older bulls brough t premium s compared to younger bulls, but it was generally not enough to offset the added expense.
Bull birth we ight, adjusted weaning weight, and EPDs for birth weigh t , weaning weight, and milk were all important price determinants, but their importance varied among bull breeds.Table 1 reports the price impacts of these growth performance and EPD measures.For Angus and Charolais, the bull's actual birth weight was an important price d e terminant, with prices declining by 3.8% and 7.7%, respectively, for each pound increase in bull birth weight .For Simmental, Angus, and Gelbvieh, the birth weight EPD was a significant (P<.05) variable with price discounts of 4.4% to 4.6% for each unit increase in EPD.Adjusted weaning weight was significant for all breeds except Red Angus and Limousin.Lack of significanc e of some growth performance factors and/or EPD measures does not indicate that these are u nimportant.The sample size for a breed may have been too small to detect a significant impact.
Several mar keting factors also affected sale prices.After adju sting for all other factors, bull prices differed across sales.This was probably a reflection of seller reputation, level of competition among buyers at a particular sale, location , and/or other marketing factors not evaluated in this study.Sale order significantly affected price.The highest priced and highest quality bulls usually were sold early in the sale.The rate of price decline associated with sale order differed de pending upon the total number of bulls in the sale; smaller sales experienced smaller total percentage price declines relative to larger sales.Bulls pictured in sale catalogs received premiums averaging 27% relative to those not pictured, after adjusting for all other differences.
One interesting feature of purebred beef bull sales is that some bulls brought considerably higher prices than their set of attributes predicted.Typically, the highest priced bulls were sold early in the sale.Althoughbuyer identity wasn't available, these bulls may have been purchased by purebred as opposed to commercia l breeders.In these instances, the bulls sold for prices that were 20% or more greater than prices for other bulls.