So how well do buyers and sellers communicate when it comes to their seedstock trades? Are the services offered by seedstock producers in line with what buyers are seeking?
While generalizations on such issues are hard to make across a population as diverse as U.S. cattle producers, BEEF editors decided to poll both seedstock producers and commercial customers about their likes, habits and concerns.
So in late January, we surveyed by email 18,371 BEEF readers and received 966 usable completed surveys from producers in 45 states for an effective response rate of 5.3%. Among those respondents, the majority (65%) identified themselves as commercial cow-calf producers; 142 were seedstock producers.
Let's look at some results:
To see the full survey results click Here for the PDF or Right Click and Save As.
Among the cow-calf segment, 47.4% of respondents classified their herd as a high percentage of straight British (Figure 1), while another 20.5% said their herds were mostly British crossbred. Another 11.7% were predominantly English/Continental crossbred, 6.6% raised a high percentage specific British/Continental composite (Balancer, Sim-Angus, etc.), while 4.1% had a high percentage Bos indicus composite (Braford, Brangus, etc.) and another 4.1% a high percentage straight Continental (Charolais, Limousin, etc.). Mostly Continental crossbreds made up another 2.8%.
Among cow-calf producers, 16.7% reported they planned to shift the genetic makeup of their cowherd in the next five years (Figure 2), with most (60.4%) planning to add British blood, 30.2% Continental, and 7.5% Bos indicus. Meanwhile, cow-calf respondents reported running an average cow:bull ratio of 27.7 to 1, and a heifer:bull ratio of 20.8 to 1.
Of the 142 seedstock producers responding, 60.6% claimed Angus as their predominant breed or composite offering. Second was Hereford with 18.3%, while Charolais and Simmental were at 12.7%, Red Angus at 11.3% and Sim-Angus at 10.6%.
Breeders were mostly comfortable with the breed package they were offering their customers, as only 15.5% had changed their breed or composite offering in the past five years, while 83.8% said they had not. The most frequently mentioned additions were Angus, Sim-Angus and Red Angus.
When asked if they planned to add breeds or composites to their seedstock offering in the next five-year period, 88% responded no, while 11.3% said yes. Of the latter group, Hereford, Charolais, Angus and Red Angus were the most mentioned additions.
On average, about 75% of the seedstock respondents marketed 50 bulls or fewer each season, while 20.4% marketed an average of 51 bulls or more. Broken down further, 16.9% of respondents marketed 1-5 bulls each season, while 15.5% marketed 6-10 bulls, 20.4% marketed 11-20 and 21.1% marketed 21-50.
Of bulls sold, seedstock producers said the greatest share (30.3%) sold for an average of $1,501-$2,000 each (Figure 3). The next largest group was $2,001-$2,500 (26.1%), and registering closely at third and fourth at 17.6% and 16.2% were bulls selling for $1,500 or less and $2,501-$3,000, respectively. Another 3.5% of respondents averaged $3,501-$4,000/bull, and 2.1% garnered an average of more than $4,000.
Compared to five years earlier (Figure 4), most sellers said their average bull price had increased (43.7%), while 36.6% said it had remained the same. Another 16.2% said their average price had decreased.
Among bull purchasers, 26.8% indicated having paid an average of $1,501-$2,000/bull for bulls purchased in the past three years (Figure 5). Another 23.8% paid an average of $2,001-$2,500, 17.6% paid an average of $2,501-$3,000, 11.4% paid an average of $3,501 or more, and 7.1% paid $1,500 or less. Meanwhile, 57.6% of buyers said they did not consider the potential salvage value of bulls when purchasing them, while 39.7% did factor that into their purchasing decision.
The majority of bull-selling respondents (64.3%) said they typically market their bulls by private treaty, while 35.1% sell via live auction, and .5% by video auction. Meanwhile, among the buyers, 53.9% reported buying their bulls by private treaty, 43.6% by live auction, and .8% by video auction.
Overall, bull sellers ranked the five traits most highly regarded by their customers (Figure 6) as disposition, birth weight, hoof and leg soundness, overall conformation, and weaning weight. Rounding out the top 10 were yearling weight, polledness, udder conformation of daughters, feedlot performance and carcass quality.
Conversely, among cow-calf respondents to the survey, the most important traits in a ranking of importance were disposition, followed by feed and leg soundness, overall conformation, weaning weight, birthweight, yearling weight, carcass quality, feedlot performance, polledness and udder conformation of daughters.
Among bull sellers, the 10 most valuable pieces of information they provide their customers (Figure 7) are actual birth weight, followed by registration paper, birth weight EPD, actual weaning weight, pedigree, weaning weight EPD, adjusted weaning weight, yearling weight EPD, and actual yearling weight. Milking ability EPD and calving ease-direct EPD tied for the 10th spot.
Among bull buyers, their top-10 traits ranked in order of most importance are actual birth weight, birth weight EPD, actual weaning weight, calving ease-direct EPD, weaning weight EPD, milking ability EPD, actual yearling weight, adjusted yearling scrotal measurement, yearling weight EPD and calving ease-maternal EPD.
When bull sellers were asked to list what they tested their bulls for (Figure 8), their number-one answer was persistent infection for bovine viral diarrhea (PI-BVD) at 37.3%, followed by bull soundness with 34.5%, Johnes at 10.6% and pulmonary artery pressure (PAP) at 5.6%. About 30% had no answer and 19.7% answered “other.” Most listed in the “other” category were fertility, semen checking and trichomoniasis.
Among bull buyers, the most popular tests in selecting bulls were PI-BVD (53.2%), bull soundness (37.2%), Johnes (27.6%) and PAP (14.3%).
Regarding services considered important by their bull-buying clients (Figure 9), seedstock providers listed free or subsidized trucking as number one, followed by assurance beyond the normal breeding guarantee, herd visits and consulting, outcross genetics available within the breed or composite, more than one breed or composite available, assistance in marketing calves, remote buying of cattle, and insurance provided or subsidized to cover injuries for the first breeding season.
Conversely, cow-calf operators ranked the services important to them in selecting seedstock suppliers this way: an assurance beyond the normal breeding guarantee, outcross genetics available within the breed or composite, herd visits and consulting, free or subsidized trucking, more than one breed or composite available, insurance provided or subsidized to cover injuries for the first breeding season, remote buying of cattle, and assistance in marketing calves. Most mentioned among “other” services was DNA education and analyses.
Bull sellers were also polled on whether they provided clients with opportunities to participate in value-added programs — defined as anything done beyond traditional management, and then selling in a manner aimed at retrieving the added value, including but not limited to calf preconditioning, increasing the number of black calves for buyers interested in Certified Angus Beef, verifying age and source, etc.
Of the respondents, 57% said they didn't provide such opportunities, while 39.4% said they did. Among those providing such opportunities, calf age was number one, followed by preconditioning, source of origin, genetics verified by breed or specific genetics within the breed, genetics (phenotype), country of origin, verified PI-BVD negative, humanely treated, implant-free and antibiotic-free.
Among bull buyers involved in value-based marketing, management/verification for calf age was number one at 79.6%, followed by preconditioning (73.5%), source of origin (70.4%), country of origin (66.7%), implant-free (44.1%), antibiotic-free (29%), humanely treated (28.7%), genetics-phenotypic (25%), verified genetics (21.3%) and verified PI-BVD negative (15.4%).
In addition, 11.5% of those cow-calf producers participating in a specific value-added program said they had changed bull breeds or suppliers in the past five years in order to do so; 87.6% said they had not.
When bull sellers were asked if there were any new services they intended to add to their seedstock offerings in the next three years, 71.1% said no and 23.9% said yes. Of those planning to add services, overwhelmingly mentioned was DNA testing and education followed by marketing assistance.
When buyers were asked about preferred services not currently offered by their seedstock supplier, more communication and consultation ranked high as did genomics services and education, marketing assistance and feed-efficiency data. But only 24.4% of respondents were willing to pay more for the extra services, while 67.7% felt it was part of the value equation for the seedstock provider.
Asked the breed makeup of the last bull they had purchased (Figure 10), 66% of cow-calf respondents said Angus, while 12.4% said Hereford, and 8.8% Red Angus. Charolais was at 8.3%, followed by Sim-Angus at 5.5%, Balancer at 5.4%, Gelbvieh at 5%, Simmental at 4.6%, Brangus at 4.1%, Limousin at 3.9% and Shorthorn at 1.4%.
Among the respondents, 44% indicated they made the purchase from a supplier they'd dealt with for more than five years, while 30.4% said they had dealt with the supplier for 3-5 years, and 23.6% were dealing with the supplier for the first time.
Of those buyers who had changed seedstock suppliers in the past three years, 23.1% said they did so to “try someone different,” 13.9% felt a competitor “offered more value,” 12.1% said their previous supplier lacked the genetics needed, and 7.1% said the supplier failed to stand behind the bulls purchased or offered poor customer service.
Of the bull buyers, 67.9% said they do not utilize genomic (DNA) data in their bull selection decision (Figure 11), while 30.2% said they do. When asked if they felt they had a good understanding of the genomic (DNA) information being offered by some seedstock suppliers, 52.3% of the bull buyers said no, while 46.6% said yes. However, at the same time, 85.2% of bull buyers said the information received for their seedstock suppliers was “understandable,” while 7.7% said it was “too complicated,” and 3.9% said it was “too basic.”
To see the full survey results click Here for the PDF or Right Click and Save As.