The goal of this data collection and analysis is to assist seedstock producers with their marketing efforts, thus allowing them to provide the best buying experience for their commercial customers. Reviewing the collective six-year data set, certain trends remain true season after season.
Customer service
As in any business, customer service is a known factor in driving sales. It’s perhaps even more important in an industry where most business transactions are sealed with a handshake. The commercial marketing team has considered many customer service factors over the years of data collection, identifying 10 factors that positively influence bull sale averages year after year.
Those 10 factors include: hosting a pre- or post-sale event, offering insurance, volume discounts, discounting bulls hauled home the day of sale, free delivery, first breeding season guarantee, health guarantee, Top Dollar Angus seedstock partnership, cost-sharing Feeder Calf Certification Program enrollment, or “other” customer service as determined by the RAAA commercial marketing team.
Of those 10, offering a volume discount has consistently been the most influential customer service factor. For each sale, an aggregate score of these 10 factors is calculated to determine the level of customer service provided. Figure 1 illustrates sale averages based on customer service scores for sales held in the fall of 2021 and spring of 2022, as well as the distribution of sales providing each level of customer service. As expected, there is a strong linear correlation between sale average and the number of customer service amenities offered.
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Genetics
Genetics are anything but simple, and buyers have many considerations within this arena alone. Each year, correlation values have been calculated between sale price and EPDs. Correlations between sale price and EPDs indicate that EPDs heavily influence bull buyers’ selection decisions. Across the six-year analysis, EPDs with the highest correlation to price included Average Daily Gain, Yearling Weight, Weaning Weight, Carcass Weight and Calving Ease Direct. Based on these correlation values, growth is consistently a highly important consideration for buyers.
Not only do buyers have an entire suite of EPD figures to evaluate, but also pedigree information to consider. Utilization of artificial insemination and embryo transfer technology has allowed for wider dissemination of elite genetics in the beef industry. Analysis has shown bulls conceived through AI or embryo transfer (ET) garner more at sale time than bulls conceived through natural service, with price spreads widening in the most recent sale season compared to previous years (Figure 2). Several factors likely contribute to this spread including sire name recognition, superior EPDs and the fact that AI and ET technology is most frequently used by top breeders.
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Phenotype: Feet and legs
While genetics are a driving factor in bull purchasing decisions, those bulls must also be phenotypically functional. Certainly, phenotypic preferences in cattle vary some from person to person, but it remains essential for cattle to travel around a breeding pasture. For the past two years of data collection, the marketing team has assigned a subjective foot score to each sale offering.
In the most recent sale season, offerings with an “above average” foot score garnered a $1,443 premium in sale average compared to those offerings with an “average” foot score.
Furthermore, there was a higher quantity of sales labeled as “above average” for foot score compared to previous years, indicating Red Angus breeders are intentionally working to improve feet. With such a significant reward in bull price and pride of improving Red Angus cattle, breeders should continue culling hard for poor feet and generating functional breeding pieces for commercial customers.
Volume of bulls offered
Another aspect that heavily influences averages year after year is the number of bulls offered. Each year of analysis, the spread in sale average between sales offering 100 bulls or more compared to sales offering fewer than 50 bulls has been over $1,000. Larger sales are often hosted by breeders who have been in the Red Angus business longer, indicating reputation is likely a contributing factor to the increased averages.
A larger offering ensures buyers looking to purchase in volume will have the opportunity to fill their order in one location and provides the opportunity to capitalize on a volume discount if one is offered. Understanding that offering a larger volume of bulls is not an option for all seedstock producers, one option for smaller producers is to participate in a cooperator program. In fact, several of the sales included in the category of 100 bulls or more in this analysis include cooperator herds in their production sale.
Providing quality information
Being an informed consumer is important to bull buyers. Seedstock producers have choices when deciding how much data to collect and deliver to their customers. The six-year analysis shows data is king, and sales offering more information to their customers experience higher sale averages. Producers who provided genomic testing, ultrasound data and/or feed intake data consistently experienced higher sale averages. The way data is presented also influences sale price. A “catalog quality” score is assigned to each sale catalog, and every year, sales with the highest quality catalogs garner the highest sale averages.
Clearly, a massive amount of planning and preparation goes into hosting a successful seedstock sale. It is the RAAA’s role to support seedstock producers as they generate Red Angus genetics for commercial customers, and our hope is that this analysis will aid seedstock providers in their efforts to host a successful production sale and better serve their customers. To view the full bull sale data analysis, visit redangus.org/communications/educational-resources. — Katie Martin, RAAA assistant director of field services
