The economic value of carcass traits, and their differences across bull sales

Abstract

Higher quality beef can only be distinguished from lower quality beef in the final stages of production when animals are slaughter. Because of quality measurement issues it is difficult to determine and value higher quality animals at the individual levels of beef production. Cow-calf producers are the primary supply of cattle into the beef marketing chain. The genetics introduced at this level follow through to the slaughter stage. Cow-calf producers use expected progeny differences (EPDs) provided at seed stock bull sales to make selective breeding decisions. The introduction of carcass EPDs has technologically advanced a cow-calf producer's ability to select bulls based on carcass quality traits. A cow-calf producer will increase profits by reacting to market conditions and selectively choosing breeding livestock.

By evaluating the prices paid for seed stock bulls at auction sales, this thesis will attempt to determine the value of animals with high carcass merit. If cow-calf producers are reacting to the increased demand for high quality beef they should make selective breeding decisions based expected carcass performance. A hedonic pricing was used to determine the implicit value of traits embedding in bull prices. The regression model was formulated to correct for the multicollinearity of traits. Regression results indicate that cow-calf producers do value the ability to predict carcass quality of a bull's progeny. This is an indication that information pertaining to carcass quality is being transmitted through the beef marketing chain. The direct channel of flow, however, has not been determined.