Factors influencing bred beef heifer sale prices in a sequential auction

Abstract

Objective: This study determines bred heifer auction price response as the number of available bred heifers for purchase decreases while controlling for reproductive management characteristics and feeder cattle prices. Materials and Methods: The data used in this study came from a bred heifer sale located on the Tennessee and Kentucky state line from 2008 through 2017, and a hedonic pricing model was estimated that considered months pregnant, breed, AI pregnancy, lot size, and timing of when the heifer was purchased in the sale. Results and Discussion: We found that months pregnant, lot size, sale month, and heifer price affected the sale price of bred heifers. We also can concluded that bred heifer sale price increased until about 49% of all heifers available in the sale were purchased. Implications and Applications: Beef cattle producers frequently buy and sell cattle through auction markets. However, more information on how timing of placement in the sale affects bred heifer values could be helpful in informing buyers on bid timing to purchase replacements at lower costs. Results suggest that bidding earlier, or waiting to bid later in the sale, could result in lower purchase prices of bred heifer when holding reproductive characteristics and feeder cattle prices constant. This is a unique study that provides insight into bidding timing for buyers to consider when purchasing bred heifers. These strategies could be helpful in selecting lots to bid on that have desired attributes but are being sold when prices are lowest.