In the Fall of 1996, a total of 19,414 feeder cattle were sold through 20 graded sales across North Carolina. This is almost a 50 percent increase from the number of graded calves sold in 1995. Calves marketed in this manner peaked in 1982, then declined steadily throughout the remainder of the 1980's. Graded calf numbers have remained relatively constant since 1990 before increasing substantially in 1996).
Producers who participate in graded sales have agreed to a number of conditions concerning the management and handling of their cattle prior to sale. Calves must be farm raised, vaccinated for Blackleg and Malignant Edema and be in good health upon delivery. Most graded sales also require consignment prior to the sale date. Horned cattle must be dehorned and healed and bulls must be castrated and healed. Consignors to graded sales also agree to have their cattle graded, weighed and sorted into uniform lots by breed (or color), weight and sex. Trained and experienced graders from the North Carolina Department of Agriculture evaluate the cattle and assign grades according to USDA feeder cattle standards. Calves are then commingled with cattle from other consignors and must be sold after processing.
The purpose of these sales is to assemble like kinds of cattle into uniform groups from small to mid-sized cow-calf operations in order to raise the price prospective buyers are willing to offer. Backgrounders and feeders can more easily manage and sell uniform groups of cattle and are thus inclined to offer higher prices at the time of purchase. Historic comparisons show premiums for graded calves sold in large pens range from $4 to $8/cwt., compared to non-graded cattle, while premiums for smaller pens are typically less. In some cases where pen size is only a few head, there may be no premiums associated with graded cattle.
The breed or color designations assigned to individual calves during processing are intended to group cattle into similar genetic lots with predictable growth and performance expectations. In the early 1950's when these sales were first begun, color patterns were an excellent means of predicting parental breeds and expected growth. Since the early 1980's when large numbers of commercial producers began using exotic breeds, Bos Indicus breeds and the many hybrids which followed, these breed designations have lost a portion of their usefulness. Still, such designations allow prospective buyers another means to differentiate cattle types, as evidenced by average price differences between breeds. Notice the price spread between 500 to 600 lb., M-1 graded steer calves sold this Fall in the following table.
| Breed | Avg. Wt. | # Head | Price ($/cwt.) |
|---|---|---|---|
| Angus | 552 lb | .787 | $59.60 |
| B&W Face | 552 lb. | 552 | $59.58 |
| Exotic X | 551 lb. | 826 | $55.35 |
| Hereford | 555 lb. | 60 | $48.25 |
| Brahman X | 549 lb. | 35 | $49.69 |
| Other X | 544 lb | .9 | $48.50 |
A portion of these price differences can be accounted for because of buyer preferences for particular breeds or crosses, while a considerable portion is due to lot size. When all graded calves sold this Fall are considered, Angus, B&W Face and Exotic X calves account for over 94% of the cattle. Obviously, the average pen size of the remaining three breed designations is quite small, as they account for less than six percent of total numbers sold.
The grade designations used in these sales are the official USDA Feeder Cattle Grades, established in 1979. These grades are based on evaluating differences in frame size and thickness--two of the most important genetic factors affecting merit in feeder cattle. Cattle in graded sales are sorted into one of four official grades. The following grade descriptions are taken from USDA Publication AMS-586, dated April of 1980.
Large Framed No.1 cattle are tall and long bodied for their age and are thrifty and slightly thick throughout. Large framed steers would be expected to reach the Choice grade at live weights in excess of 1200 pounds, while large framed heifers would be expected to do likewise in excess of 1000 pounds.
Medium framed No.1 cattle are average to slightly tall and long bodied for their age and are thrifty and slightly thick throughout. Medium framed steer calves would be expected to reach the Choice grade with live weights between 1000 and 1200 pounds, while Medium framed heifers would be expected to do likewise between 850 and 1000 pounds.
Small framed cattle are shorter bodied and not as tall as specified for the minimum of the Medium Frame grade. They are thrifty and slightly thick throughout and would be expected to reach the Choice grade at live weights of less than 1000 pounds for steers, and less than 850 pounds for heifers.
LMS-2 cattle are variable in their frame size, thrifty, and are narrow through the forequarter and the middle part of the rounds. The legs are set close together in both the front and rear. The forearm and gaskin are thin and the back and loin have a sunken appearance. Cattle graded LMS-2 exhibit this narrowness with a slightly thin covering of fat, but may be carrying varying degrees of fat and remain in this grade.
Prospective buyers use grade descriptions to differentiate cattle types, as evidenced by average prices paid for various grades of calves. Notice the prices paid this Fall for 500 to 600 pound steers of different grades in the following table. Again, keep in mind the impact of lot size when making comparisons.
| Grade | Avg. Wt. | # Head | Price ($/cwt.) |
|---|---|---|---|
| L-1 | 561 | 69 | $52.70 |
| M-1 | 552 | 2144 | $57.43 |
| S-1 | 542 | 290 | $48.44 |
| LMS-2 | 545 | 1301 | $53.33 |
As you might expect, the Medium framed cattle are typically in greatest demand, while the Large framed and Small framed cattle are less desirable. Pens of thin cattle (LMS-2's) are often mixed in type; some being genetically poor while others may have lacked the nutritional or management status to grade No 1. in thickness. The price offered for these pens may range considerably based on the mix of cattle types within a given pen.
The following cities have graded sales in their areas and are coordinated by the livestock agent and the local livestock auction in their respective counties: Ayden, Asheville, Chadbourn, Clinton, Jefferson, Norwood, Oxford, Rocky Mount, Siler City, Statesville and Wilkesboro. For more information about these sales, contact your local extension livestock agent, the North Carolina Cattlemen's Association, or the Marketing Division of the North Carolina Department of Agriculture. For a complete summary of the Fall graded sales, contact myself at 919/515-7772.