One of the goals of the Texas Agricultural Extension Service (TAEX) is to increase the value of agricultural products being marketed by Texas producers. With the assistance of the South Texas Auction Company, Kleberg-Kenedy County Beef Cattle Improvement Association and the Jim Wells County Beef Improvement Association, an educational beef cattle marketing activity focusing on commercial females was developed. This special marketing activity was patterned after the successful South Texas Stocker-Feeder Calf Sale, an event sponsored by the same groups. For 7 years data has been collected and analyzed on the animals being marketed through the South Texas Stocker-Feeder Sale. This data has provided South Texas cow-calf producers information on profitable calf marketing and management practices.

An objective of the commercial female sale was to collect and analyze data that would assist South Texas beef producers in developing profitable management and marketing strategies for the "higher end" of the female portion of their calf crops. When analyzing this data, producers should keep in mind that this is one year's information, and such a limited data set may not justify major changes management practices. It should also be noted that management factors, and animal quality and kind may have impacted the prices paid and received in some classes. The results of the 1st South Texas Commercial Female Sale and analyses are presented in the following sections.


Pairs vs. Bred Heifers

Surprisingly the price spread between pairs and bred heifers was extremely slight and in some cases bred heifers generated more revenue than did pairs. Nineteen pairs that were approximately three years of age were consigned to the sale, with an average gross sale price of $772.89 per pair. Twenty-six bred heifers, 18 to 20 months of age, were sold at an average price of $714.42 per head. Given these results, a producer must question if the expense and risk involved in maintaining a female another 16 to 18 months and successfully delivering a calf can be justified for additional average revenues of $58.47 per head.

Survey results generated by the TAEX Farm and Ranch Management Group using the National Cattlemen's Beef Association's Standardized Performance Analysis (SPA) for Texas herds for the period covering the years from 1995 to 1997 shows that the average cost of maintaining a cow is $307 per year. These results indicate that on average, the cost of maintaining a female for the additional time period would not be offset by the revenue generated.

Budgets compiled by the TAEX project that the average cost a producer incurs developing a young pair is $468 from the time the mother cow was a weaned heifer, as compared to $160 to develop a bred heifer from the time she was weaned. To estimate the relative costs of pairs and bred heifers, assumptions need to be made as to the value of the animals at weaning. Using the historical results from the South Texas Stocker-Feeder Calf Sale as a base, the mother cows for the pairs weaned in the fall of 1995 had an average market value of only $224 per head (Average of 431 pounds valued at $52 per cwt). This would project a market valuation at weaning plus development cost of $692 for the pairs, and a subsequent margin of $80 per head when compared with selling the heifer at weaning in 1995. Assuming that the bred heifers were weaned in the spring of 1997, it is estimated that their value at weaning would be approximately $338 per head (Estimated at 450 pounds per head valued at $75 per cwt). This would project a market valuation at weaning plus development cost of $498 for the bred heifers, and a subsequent margin of $216 per head when compared with selling the heifer at weaning in 1997.

The sale results also provide an opportunity to examine how bid prices for females in the sale relate to bid prices generated by a capital budgeting model developed by TAEX to analyze and develop maximum feasible financial and economic bid prices for breeding cattle. As seen in Table 3, a consensus price forecast for a six year period is used to develop gross revenue inflows for the breeding pairs. Calf weaning weights, cull cow weights, tax information and financing consideration are also outlined. Maintenance costs for cows excluding depreciation begin at $260 per year and are inflated at an annual rate of 3%. Financing considerations include a 20 percent down payment, a 10% interest rate and a five year loan term. To account for the time value of money, risk and anticipated inflation the projected cash flows are discounted at a pre-tax rate of 10%. The data presented in Table 4 for the bred heifers are adjusted for the lag in gross receipts relative to the pairs. Otherwise the data is identical to that used in the economic analysis of the bred heifers is identical to that of the pairs.

Given the assumptions discussed above, and the calculations shown in Table 3, it appears that the pairs were priced at a reasonable level. Under these assumptions, the pairs would have a payback period of six years, and the positive calculated net present value indicates that the investment is economically feasible at a pre-tax discount rate of 10%. However, the negative cash flow seen in years 1 and 2 may make the investment financially infeasible, as the investment would need to be subsidized with cash from other sources.

The results for the bred heifers shown in Table 4 indicates that given the consensus price forecast and cost structure used in the model, along with the loan structure described above, the average bid price of $714 leads to a investment that is not economically feasible at the 10 percent discount rate. The investment in the bred heifers does have a positive internal rate of return of 5.6%, along with a seven year payback period. This indicates that the investment would be economically feasible at a discount rate smaller than 5.6%. This investment also has a large negative cash flow generated in year 1, indicating that the investment may not be financially feasible given the costs and returns outlined above.


The information presented in the previous three paragraphs is intended only to illustrate tools developed by TAEX to support formulation of economic and financially feasible bid prices for commercial beef cows. Resulting bid prices are heavily dependent upon the cost structure of the individual bidder, and will vary from the examples shown above. However, sale management believes that it is very important for producers to carefully examine their own situation on a case by case basis, given the importance of the decision to purchase replacement females. If you would like a copy of the software used to develop Tables 3 and 4, please contact your local county Extension Agent.

Pairs and Bred Heifers vs. Bred Cows

It is hard to draw any conclusions when making comparisons between pairs and bred cows and bred heifers and bred cows. A small number of bred cows (10) were marketed with ages ranging from 4 to 7 years. There were some major differences in kinds and types and these differences will be discussed in the breed influence summary. Bred cows averaged $603 per head, selling for $169.89 per head less than pairs and $111.42 less than a bred heifer.

Bred Heifers vs. Exposed Heifers vs. Open Heifers

Heifers marketed as exposed had been running with bulls for a minimum of 45 days. In some cases heifers had been exposed 60 days. All heifers marketed as exposed were palpated and diagnosed as open. Forty-seven head of exposed heifers averaged $554.68, or $159.74 less per head than the bred heifers of approximately the same age. Using this data, a producer might conclude that buyers penalize slow breeders by roughly $3.55 per head per day over a 45 day breeding season.

Fifty-one open heifers, 9 to 14 months of age sold for an average of $400.89, or $153.80 less than an exposed heifer. However, it should be noted that type may have played a role in the price a producer received for an open heifer. There was a $150 range between the top selling open females selling at $500 per head, and the low selling open females selling $350 per head. Based on the projected TAEX cost estimate of $160 per head to move a heifer from a weaned to bred condition, the projected total cost for developing these open heifers would range from $510 to $660 per head. This would indicate that on average, buyers still preferred bred heifers which average $714 per head.

Breed Influence

Twelve breeds and various breed combinations were marketed in this special event. As in special consignment female sales across the state, Tiger-stripe F1 females proved to be popular with buyers. Tiger-stripes sold for $87 per pair over other breeds of females in the pair division. Cow-calf operators realize that females with Bos indicus influence, 3/8 to 5/8, are a necessity in the South Texas environment. Demand for Santa Gertrudis cross and Beefmaster cross females was strong as would be expected. Although Brangus and Brangus type cattle fall into this category, black cows are discriminated against by some South Texas producers. The price received for heavy bred Brangus type females was comparable to the price received for exposed heifers. In past South Texas Stocker-Feeder Calf Sales, animals surpassing 5/8 Brahman influence have been penalized by buyers. However, in this commercial female event, full blood Brahman received a premium. In the exposed and open heifer division, full blood Brahmans commanded as much as $70 per head more than the nearest breeds.

It is the feeling of sale management that regardless of outlook, cow inventory, and calf price, there always seems to be a steady demand for F1 females, especially Tiger- stripes. A desire to service this market has created a need for Brahman females. Cattle that showed little or no Brahman influence were penalized by buyers. This was especially true in the open heifer division.

Management Practices

Although it is difficult to determine if consignors received a premium for females that were designated Official Calfhood Vaccinates, several buyers stated that they were only interested in females that had received a Brucellosis vaccination. Several expressed interest in females that had received Leptospirosis and Vibriosis vaccinations. Sale management feels that completing these management practices enhances a replacement female sale and may provide long term benefits to the sale, enabling it to gain a reputation for the marketing of healthy, reproductively sound females.


Table 1. Results by class.

Class	Head	Total Value	Average Value
Bred Cows	10	$6,030.00	$603.00
Bred Heifers	26	$18,575.00	$714.42
Exposed Heifer	47	$26,070.00	$554.68
Open Heifer	51	$20,445.00	$400.88
Pairs	19	$14,685.00	$772.89
Total	153	$85,805.00	$560.82

Table 2. Results by class and breed type.

Breed	Bred Cows			Bred Heifers			Exposed Heifer			Open Heifer			Pairs
	Head	Total	Average	Head	Total	Average	Head	Total	Average	Head	Total	Average	Head	Total	Average
Beefmaster	5	$3,475	$695							1	$410	$410
Beefmaster X				8	$6,400	$800	6	$3,510	$585
Brahman							9	$5,900	$656	1	$500	$500
Brahman X				1	$525	$525				5	$1,875	$375	5	$4,185	$837
Brangus X	2	$950	$475
Charolais X	2	$1,070	$535	1	$600	$600				13	$4,900	$377
F1							16	$8,700	$544
Gert X				1	$500	$500
GertXHereford	1	$535	$535	10	$7,450	$745	4	$2,200	$550
GertXSimmental				4	$2,600	$650	5	$2,425	$485	20	$8,450	$423	14	$10,500	$750
Hereford X										5	$2,000	$400
HerefordXSimmental							7	$3,335	$476
Limousin X										6	$2,310	$385
Red Baldy				1	$500	$500