Submitted by: Matthew J. Fischer CCA
Clemson Livestock and Forage Economist
Long held tradition (and fact) states that feeder bulls will be discounted to feeder steers, obvious reasons. Does this always occur and is it consistent? It depends. Observing USDA-AMS sale barn data from South Carolina between 2009-2023 for September marketings, when many calves are sold in the state, some interesting points appear. Fig. 1. contains the movement of the price discount, or spread, between bulls and steers for two different weight classes, 400-499 lbs., and 600-699 lbs.
Fig. 1.
Source: Livestock Reports – South Carolina Department of Agriculture. (n.d.).
Using the price data between 2009-2023 three points are noticed.
- The 2014-mid 2015 had a significant increase in the discount rate from steers to bulls for the heavier calves.
- 2021, COVID-19 timeframe, recorded a collapse in the spread discount between lighter and heavier feeder calves.
- Moving from 2021 to 2023, with higher marketing prices year by year, the discount spread increased.
What to expect? For feeder calves in the 400-499 lbs. weight class the average discount for feeder bulls to feeder steers was $5.43/cwt with a minimum discount of $1.25/cwt and a maximum discount of $10.00/cwt. The feeder calves in the 600-699 lbs. weight class the average discount for feeder bulls to feeder steers was $12.30/cwt with a minimum discount of $6.07/cwt and a maximum discount of $26.60/cwt. The bull calf discount changes based on overall market conditions and feeding profitability. High prices may lead to a larger discount in some cases, see 2014 and 2015, due to the production risk on these calves.
So does this help? A discount of feeder bulls to steers does exist for the 2009-2023 marketing. In none of the years did the discount disappear but the discount varied widely. The spread on the discount between heavier and lighter calves can depend on prices movements toward or away from historical averages and impacts on cattle markets outside the expected.
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