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Effect of Marketing Through Value Added and Video Sales on Feeder Cattle Prices

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Effect of Marketing Through Value Added and Video Sales on Feeder Cattle Prices BearWorks MSU Graduate Theses Fall 2020 Effect of Marketing through Value Added and Video Sales on Feeder Cattle Prices Amanda Trotter Missouri State University, [email protected] As with any intellectual project, the content and views expressed in this thesis may be considered objectionable by some readers. However, this student-scholar’s work has been judged to have academic value by the student’s thesis committee members trained in the discipline. The content and views expressed in this thesis are those of the student-scholar and are not endorsed by Missouri State University, its Graduate College, or its employees. Follow this and additional works at: https://bearworks.missouristate.edu/theses Part of the Agriculture Commons Recommended Citation Trotter, Amanda, "Effect of Marketing through Value Added and Video Sales on Feeder Cattle Prices" (2020). MSU Graduate Theses. 3571. https://bearworks.missouristate.edu/theses/3571 This article or document was made available through BearWorks, the institutional repository of Missouri State University. The work contained in it may be protected by copyright and require permission of the copyright holder for reuse or redistribution. For more information, please contact [email protected]. EFFECT OF MARKETING THROUGH VALUE ADDED AND VIDEO SALES ON FEEDER CATTLE PRICES A Master’s Thesis Presented to The Graduate College of Missouri State University TEMPLATE In Partial Fulfillment Of the Requirements for the Degree Master of Natural and Applied Science, Agriculture By Amanda Jane Trotter December 2020 Copyright 2020 by Amanda Jane Trotter ii EFFECT OF MARKETING THROUGH VALUE ADDED AND VIDEO SALES ON FEEDER CATTLE PRICES Agriculture Missouri State University, December 2020 Master of Natural and Applied Sciences, Agriculture Amanda Jane Trotter ABSTRACT Feeder cattle marketing opportunities for producers in Missouri continue to expand. Missouri ranks within the top ten U.S. States in beef cow inventory and is a major feeder calf exporter. Selecting the appropriate marketing opportunity can have a dramatic impact on the income of the cattle producer. Feeder cattle marketing opportunities include value-added program sales, video auctions, as well as the traditional live cattle auction. A long-term study comparing these marketing opportunities in a single livestock market in Missouri has not been conducted. The objective of this study is to analyze cattle characteristics that can influence market price in feeder cattle auctions and quantify any price premiums received for video or value-added over traditional sales. Data for this study was collected between March 2009 and December 2018 at Joplin Regional Stockyards, near Carthage, Missouri. Although cattle were sold through the same livestock auction different marketing strategies including value-added, video, or traditional feeder cattle auction were utilized. Market data from value-added, video, and traditional feeder sales over the study period included 521,586 lots encompassing 3,400,621 head of cattle. Analyzed descriptive factors that could affect the sale price of marketed cattle included sale date, weight class of lot, number of cattle per lot, gender, color/ breed influence, and auction type. Descriptive statistical analysis in Minitab 19 (Minitab Inc., State College, PA) was used to identify trends in the data. Multilinear regression analysis in Minitab 19 (Minitab Inc., State College, PA) was used to analyze the significance of categorical variables on the bid price. Analyzed categorical factors were found to be significant (P < 0.05). Overall value-added and video sales earned mean price premiums of $1 per cwt and $5.36 per cwt respectively in comparison to traditional auctions. This study confirms along with previous research that over time cattle sold through value-added and video sales will consistently sell for higher mean bid prices when compared to cattle at traditional auctions. Producers that take part in value-added management and marketing opportunities are likely to receive a higher price for their cattle than those sold through traditional auctions. KEYWORDS: feeder cattle, cattle auction, value-added, video auction, marketing iii EFFECT OF MARKETING THROUGH VALUE ADDED AND VIDEO SALES ON FEEDER CATTLE PRICES By Amanda Jane Trotter A Master’s Thesis Submitted to the Graduate College Of Missouri State University In Partial Fulfillment of the Requirements For the Degree of Master of Natural and Applied Sciences, Agriculture December 2020 Approved: Lacy Sukovaty, DVM, Thesis Committee Chair Gary Webb, Ph.D., Committee Member William McClain, Ph.D., Committee Member Julie Masterson, Ph.D., Dean of the Graduate College In the interest of academic freedom and the principle of free speech, approval of this thesis indicates the format is acceptable and meets the academic criteria for the discipline as determined by the faculty that constitute the thesis committee. The content and views expressed in this thesis are those of the student-scholar and are not endorsed by Missouri State University, its Graduate College, or its employees. iv ACKNOWLEDGEMENTS My time as a graduate student here at Missouri State University has been extremely rewarding. I am thankful for the College of Agriculture for giving me the opportunity to continue my education. I would like to thank the following people for their support during the course of my graduate studies. Dr. Lacy Sukovaty, for her advisement and for challenging me to further my understanding of topics. My other committee members; Dr. Gary Webb and Dr. William McClain for their guidance through the thesis process. Next, I would like to thank Mark Harmon, Dustin Eldridge, and Clay Eldridge from JRS for their helpfulness. Last but not least, thank you to my friends and family for the never-ending support and advice. I dedicate this thesis to my parents Ed and Susan Trotter for their continuous support of my goals. v TABLE OF CONTENTS Introduction Page 1 Justification Page 1 Literature Review Page 3 Cattle Market History Page 3 Market Cycle Page 6 Cattle Marketing Page 8 Commingling Page 9 Video Sales Page 11 Value-added Sales Page 13 Preconditioning Page 20 Preconditioning and Immunology Page 22 Stress Effects on Immune Response Page 27 Bovine Respiratory Disease Page 34 Blackleg Page 39 Parasites Page 39 Methods Page 41 Data Collection Page 41 Value-added Sale Requirements Page 42 Video Sale Requirements Page 46 Statistical Analysis Page 47 Results Page 50 Discussion Page 64 Limitations Page 67 Conclusions Page 68 Literature Cited Page 69 vi LIST OF TABLES Table 1. Number of cattle sold through Joplin Regional Stockyards by Page 41 auction type and gender, 2009-2018 Table 2. Number of cattle sold through Joplin Regional Stockyards by Page 42 weight class and gender, 2009-2018 Table 3. Number of cattle sold through Joplin Regional Stockyards of Page 43 all auction types by breed/ color influences and gender, 2009- 2018 Table 4. Number of cattle sold through Joplin Regional Stockyards of Page 43 all auction types by lot sizes and gender, 2009-2018 Table 5. Management requirements of value-added sales designated by Page 44 Joplin Regional Stockyards Table 6. Vaccine protocol in value-added programs designated by Page 45 Joplin Regional Stockyards Table 7. Descriptive statistics of steer bid prices in dollars per cwt sold Page 50 through Joplin Regional Stockyards by auction type, 2009- 2018 Table 8. Descriptive statistics of heifer bid prices in dollars per cwt Page 51 sold through Joplin Regional Stockyards by auction type, 2009-2018 Table 9. Descriptive statistics of bull and steer bid prices in dollars per Page 51 cwt sold through Joplin Regional Stockyards in traditional auctions, 2009-2018 Table 10. Descriptive statistics of steers 500-899 pounds bid prices in Page 52 dollars per cwt sold through Joplin Regional Stockyards by auction type, 2009-2018 Table 11. Descriptive statistics of heifers 500-899 pounds bid prices in Page 52 dollars per cwt sold through Joplin Regional Stockyards by auction type, 2009-2018 Table 12. Descriptive statistics of steer bid prices in dollars per cwt Page 53 sold through Joplin Regional Stockyards by lot size, 2009- 2018 vii Table 13. Descriptive statistics of heifer bid prices in dollars per cwt Page 54 sold through Joplin Regional Stockyards by lot size, 2009- 2018 Table 14. Descriptive statistics of bull bid price in dollars per cwt sold Page 54 through Joplin Regional Stockyards by lot sizes containing 1- 25 cattle, 2009-2018 Table 15. Descriptive statistics of steer bid price in dollars per cwt sold Page 55 through Joplin Regional Stockyards by weight classes 350- 1,000 pounds, 2009-2018 Table 16. Descriptive statistics of heifer bid price in dollars per cwt Page 56 sold through Joplin Regional Stockyards by weight classes 350-1,000 pounds, 2009-2018 Table 17. Descriptive statistics of bull bid price in dollars per cwt sold Page 56 through Joplin Regional Stockyards by weight classes 350- 1,000 pounds, 2009-2018 Table 18. Descriptive statistics of steer bid price in dollars per cwt sold Page 57 through Joplin Regional Stockyards by color, 2009-2018 Table 19. Descriptive statistics of heifer bid price in dollars per cwt Page 58 sold through Joplin Regional Stockyards by color, 2009-2018 Table 20. Descriptive statistics of bull bid price in dollars per cwt sold Page 59 through Joplin Regional Stockyards by color, 2009-2018 Table 21. Regression analysis of cattle bid price in dollars per cwt Page 60 versus auction type, gender, lot size sold through Joplin Regional Stockyards 2009-2018 Table 22. Regression analysis of cattle bid price in dollars per cwt Page 61 versus color/ breed influence and weight class in pounds sold through Joplin Regional Stockyards 2009-2018 Table 23. Regression analysis of bid price in dollars per cwt versus Page 62 auction type, lot size, and weight class in steers 600-899 pounds sold through Joplin Regional Stockyards 2009-2018 Table 24. Regression analysis of bid price in dollars per cwt versus Page 63 auction type, lot size, and weight class in heifers 600-99 pounds sold through Joplin Regional Stockyards 2009-2018 viii LIST OF FIGURES Figure 1.
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