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1999 Beef & Bison Production Field Day


Using ultrasound as a marketing tool for

determining value of finished cattle

K.F. Hoppe, J. Dhuyvetter, and C. McIntyre

North Dakota State University,

Carrington and Minot, and USDA

Agricultural Marketing Service, Sioux Falls

Abstract

An educational project was conducted to demonstrate the value of using ultrasound technology for sorting finished cattle for market. Seven head of finished cattle of diverse type, condition, carcass weight, muscling, and marbling were evaluated by visual and ultrasound for carcass characteristics. After a live animal evaluation, the steers were harvested and carcass information collected. Gross returns per steer were determined under the three pricing methods of a flat price, a high quality rewarding grid, and a high cutability rewarding grid. Using estimated on actual carcass information to sort and individually market steers to their highest returning price methods resulted in steers grossing an average of $887 per steer from visual evaluation, $895 from ultrasound measurements and $898 for actual carcass data. Actual gross return per steer was $888.43 and $898.99 for sorting by visual and ultrasound evaluation, respectively. Ultrasound appears to be an effective method for estimating the finished value of cattle before harvest.


Key words: Ultrasound, Feedlot, Finishing, Beef Steers.

 

Introduction

Cow calf producers considering retained ownership often question the value of their calves. Actual calf value relates to feeding performance and carcass value. Traditionally, carcass value was only known after slaughter with the exception of individual buyers and judges that had developed a trained eye for estimating carcass value in the live calf. Another approach to estimating carcass value is by using ultrasound technology. Ultrasound allows the user to estimate carcass value by viewing the amount of fat and muscling on the live animal.

Carcass value for beef cattle is influenced by USDA Quality Grade and USDA Yield Grade. USDA Quality Grade is determined by the amount of fat within the rib eye muscle (marbling) and age. As intramuscular fat increases, the quality grade moves towards choice and prime grades. USDA Yield Grade is determined by the amount of external fat (backfat), internal fat, muscling, and carcass weight. As the amount of fat increases on the carcass, the yield grade will increase (i.e. YG4, YG5), reflecting a lower yield of closely trimmed retail product.

Market discounts resulting from over-finished (poor yield grade) and under-finished (poor quality grade) cattle can be avoided by using ultrasound 20-60 days before harvest. By determining the backfat thickness, rib eye area, and intramuscular fat content before slaughter, cattle feeders can estimate the number of days on feed needed before slaughter. Cattle can also be sorted into groups marketed to different specification programs depending on the individual carcass characteristics.

The application of ultrasound to finished beef production allows producers to estimate carcass value in the finished animal. This demonstration project was developed to identify an economic value in using ultrasound for sorting finished cattle sold to the best value market.

Materials and Methods

To demonstrate the value of ultrasound technology, a live animal and carcass evaluation was conducted. Seven market steers representing differences in breed type, carcass weight, fat cover, muscling and marbling were displayed and subsequently harvested. Two weeks prior to harvest, carcass characteristics were estimated using visual appraisal and ultrasound. Cattle were ultrasounded by a certified technician. The carcass characteristics included dressing percent, quality grade, yield grade, 12thrib backfat thickness, ribeye area, and internal fat (kidney, pelvic and heart fat). Actual carcass characteristics were measured after harvest and compared to visual and ultrasound estimates.

For economic comparison, cattle were valued as a group and individually using a flat bid, a grid price rewarding quality (marbling), or a grid price rewarding cutability (muscling). Quality and cutability grid prices were based on USDA collected data for the week the cattle were harvested (Table 1). The flat bid price was $102.50 per cwt. of hot carcass weight or $64.88 per cwt. live weight with a 63.38% dressing percent. The base price for grid pricing was $105.50 per cwt. of hot carcass weight.

Results and Discussion

Individual live weights, dressing percent and carcass weight are shown in Table 2. Overall, the cattle averaged 1383.4 lbs. and yielded an average hot carcass weight of 841.8 lbs. Dressing percent averaged 63.38 after a 4% shrink from the live weight. Individual carcass characteristics, as estimated by visual or ultrasound appraisal and by carcass after harvest are reported in Table 3.

Average carcass characteristics, as reported in Table 4, show that average quality grade was estimated as low choice by both visual and ultrasound appraisal. Actual post-harvest carcass evaluation identified the carcasses to average small marbling or low choice. Backfat thicknesses and associated yield grade appeared to be overestimated by visual appraisal (0.60, Y63,respectively) as compared to ultrasound estimates (0.43, Y62) and actual evaluation (0.45, Y62).

Hot carcass weight was used for comparing cattle value as determined by three pricing methods. The flat bid pricing method is based on averages and rewards with an average price. The flat bid price used in this example was $102.50 per cwt. hot carcass weight. When all cattle were sold via the flat bid, the average actual gross return was $861.67 per head.

The quality pricing grid rewards cattle that grade prime but discounts cattle that are over conditioned or fat (i.e. YG 4, YG 5) or cattle with little marbling (i.e. Quality grades Select or Standard). When all cattle were sold via the quality pricing grid, the average actual gross return was $850.15 per head.

The cutability pricing grid rewards carcasses that are well muscled and contain less fat (i.e. YG 1, YG 2) . Carcasses containing more fat are discounted. Also, quality grade is not greatly rewarded or discounted by the cutablity pricing grid used. When cattle were priced using the cutability pricing grid, the average actual gross return was $871.35 per head.

Cattle were sorted by visual and ultrasound appraisal and priced as a group to each of the three pricing methods. Visual appraisal estimated that the best single group pricing method was the flat bid ($861.67 average gross return per head) while ultrasound evaluation identified marketing by the cutability pricing grid ($866.36 average gross return per head) as the optimum marketing method. Post harvest carcass evaluation identified the cutability pricing grid to be the best pricing method ($871.35 average gross return per head) for this demonstration project.

When cattle were sorted and individually sold to the best pricing method, cattle returned $888.43 average gross return per head when sorted visually. Cattle sorted by ultrasound actually returned $898.99 average gross return per head. Cattle priced according to post harvest carcass evaluation returned $898.99 average gross return per head.

Sorting cattle by ultrasound returned $9.68 more per head than visual sorting when cattle were sold as a group. When cattle were sorted and individually priced to the best pricing method, ultrasound returned $10.56 per head more than visual sorting. Also, cattle sorted individually and sold to the best market price returned $27.64 more than when cattle were sold as a group to only one market pricing method.

Even after deduction of the price of ultrasound ($2-10 per head), ultrasound appears to be a cost effective method for determining carcass value when different pricing and marketing options exist. Sorting and then selling individually to the best market appears to return more value per head compared to selling as a group to only one market

Implications

Sorting cattle with ultrasound aids in discovering cattle value prior to marketing. Since time needed to ultrasound can be as low as 2-5 minutes per head, cattle carcass characteristics can easily be measured, cattle value calculated, and calves sorted prior to harvest. This creates the opportunity to market cattle to the best price and return more value to the owner even after the expense of ultrasound ($2-10 per head) is considered.


Table 1. Premiums and discounts for determining quality and cutability value.

Quality Grid     Cutability Grid  
Carcass quality adjustments
         Prime +10.00 + 3.00
        Certified Programs
            - Average or high choice + 2.50 0.00
        Choice 0.00 0.00
        Select - 6.00 - 3.00
        Standard -25.00 - 3.00
        Bullock/Stag - 31.00 - 31.00
        Hard Bone - 25.00 - 25.00
        Dark Cutter - 31.00 - 31.00
Carcass cutability adjustments
        Yield Grade 1 0.00 + 3.00
        Yield Grade 2 0.00 + 2.00
        Yield Grade 3 0.00 - 1.00
        Yield Grade 4 - 10.00 - 20.00
        Yield Grade 5 - 15.00 - 25.00
Carcass weight adjustments
       < 500 pounds - 21.00 - 21.00
       500 - 550 pounds - 17.00 - 17.00
       550 - 950 pounds - 0.00 - 0.00
       950 - 1000 pounds - 17.00 - 14.00
       > 1000 pounds - 21.00 - 21.00

Table 2. Individual live and carcass weights and calculated dressing percent.

Steer number                                  1          2          3         4         5         6         7        Overall  
Live weight, lbs. 1412 1334 1416 1592 1147 1385 1398 1383.4
Carcass weight, lbs. 876 843 803 958 680 855 878 841.8
Dressing percent 64.62 65.83 59.07 62.68 61.76 64.31 65.42 63.38
        (after 4% shipping shrink)

Table 3. Individual carcass characteristics as determined live by visual, ultrasound and after harvest carcass evaluation .

Steer number                                          1          2          3          4          5          6          7    
Quality Grade
     Visual Ch+ Se+ Ch- Pr- St Ch- Ch
    Ultrasound Ch Se+ Se Se+ Se Ch Ch-
     Carcass Ch Ch- Se+ Se+ Se+ Ch- Ch-
Yield Grade
     Visual 4.00 2.90 3.40 5.00 2.20 2.80 3.20
     Ultrasound 3.04 2.34 1.97 2.03 0.94 2.71 3.11
     Carcass 3.44 2.80 1.91 1.68 1.05 2.99 3.78
Backfat thickness, inch
     Visual 0.85 0.45 0.50 1.10 0.25 0.50 0.60
     Ultrasound 0.57 0.49 0.33 0.39 0.21 0.43 0.59
     Carcass 0.60 0.56 0.28 0.36 0.24 0.48 0.64
Ribeye area, sq. inch
     Visual 14.70 14.00 12.70 15.70 12.00 15.00 14.70
     Ultrasound 13.63 14.53 14.37 16.90 14.70 13.48 13.18
     Carcass 13.40 15.00 14.50 17.70 15.10 13.60 13.00
Kidney, pelvic and heart fat, %
     Visual 3.00 2.50 2.50 4.00 1.50 2.00 2.50
     Ultrasound -- -- -- -- -- -- --
     Carcass 2.00 2.50 1.50 1.50 1.00 2.00 2.50

Table 4. Average carcass characteristics as determined live by visual and ultrasound and by carcass.

Carcass characteristics                                     Carcass           Visual                  Ultrasound  
Quality Grade Choice Choice Choice
Yield Grade 2.52 3.35 2.30
Backfat thickness, inch 0.45 0.60 0.43
Ribeye area, sq. inch 14.6 14.1 14.3
Kidney, pelvic and heart fat, % 1.85 2.57 ---

Table 5. Cattle value as priced by flat bid, quality grid, cutability grid, or sorted by actual, visual, or ultrasound to best market price.

Average Cattle Value, per head

Group priced to pricing method

Actual
Flat Bid ($102.50/cwt carcass or $64.88 live)                     $861.67  
Quality grid ($105.50/cwt base w/grid) $850.15
Cutability grid              ($105.50/cwt base w/grid) $871.35

Group priced to best market through sorting by:

Best Price Estimated Actual
Visual Flat Bid $861.67 $861.67
Ultrasound                   Cutability                                 $866.36                $871.3    
Carcass Cutability $871.35 $871.35

Individual priced to best market through sorting by:

Estimated     Actual
Visual                                                              $887.96     $888.43  
Ultrasound                   $895.38     $898.99
Carcass $898.99     $898.99

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