Jones et al.: Value of Bull Characteristics
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Based on elasticities, the variable uribepd is
found to have the greatest effect on price
among the ultrasound EPDs, although its
effects are much smaller than any of the actual
measures or production EPDs. This shows
that the ultrasound EPDs provide additional
information to buyers but, based on simple
elasticities, may not be as important as other
factors used in purchasing decisions. The
argument would be that producers are most
concerned with producing pounds of beef
while becoming somewhat concerned with
improving the carcass quality of their animals.
Figure 3 compares the estimated premiums
received for uribepd, birthepd, and adjyearwt
across a two-standard-deviation range of
equally likely changes, calculated using the
sensitivity approach outlined earlier. Based on
this calculation technique, an ultrasound rib
EPD observation that is one standard devia-
tion above the mean would on average yield a
premium of $440, while an adjusted yearling-
weight measure that is one standard deviation
above the mean would yield an average
premium of $234, and a birth-weight EPD
that is one standard deviation above the mean
would result in an average discount of $186
for the bull. These results indicate that the
relative premiums received for uribepd are
considerably higher than those received by
birthepd or adjyearwt at sales that report all
three measures. This alternative method of
interpreting the results provides insight re-
garding the effects of specific variables based
on equally likely changes in these variables.
Based on the findings in Figure 3, the
inclusion of ultrasound EPDs should be
considered by sales that failed to report them,
given the high premiums received for bulls
possessing large ultrasound ribeye EPDs.
Conclusion
The two primary objectives of this study were
to reexamine the economic values of produc-
tion EPDs and how they compare to the
values assigned to actual weights and to assess
the impact that various carcass trait predictors
(e.g., ultrasound EPDs) have on Angus bull
prices. Although the elasticities associated
with actual weights were consistently higher
than those associated with their corresponding
production EPDs (similar to the findings of
Chvosta, Rucker, and Watts), sensitivity
calculations suggest that the predicted premi-
ums/discounts for birthepd are greater than
those associated with birthwt after accounting
for the likelihood of change. These results
indicate that on a relative scale, buyers
consider birthepd more important than its
related actual measure when selecting bulls.
This relationship did not always hold true
when comparing EPDs with actual underlying
measures, however, indicating the continued
importance of actual measures in bull selec-
tion.
Marketing factors were also examined in
this study. These factors were found to yield
premiums or discounts in addition to those
received for production characteristics and
predictors. An examination of the discrete
variable shifts offers several interesting con-
clusions. Across model specification, pictures,
embryo transfers, semen rights, and pathfinder
dams are found to positively impact bull
prices. Retention of semen rights yields a
premium in all models. Bulls sold in the spring
are consistently discounted relative to bulls
sold in the fall. The significance of several of
the sire variables suggests that the pedigree of
the bull is important to buyers. Several sale
variables were also found to be significant,
indicating that buyers consider the reputation
of the breeder when purchasing purebred bulls.
This study also examined the value of
carcass quality predictors. All four ultrasound
EPDs were highly significant, with three out of
the four exhibiting the expected sign. Com-
parisons between premiums or discounts
associated with ultrasound and production
EPDs and actual weights showed one ultra-
sound EPD, uribepd, to have significantly
larger price responses than either birthepd or
adjyearwt when evaluated on an equally likely
basis. This finding is significant because it
suggests that buyers understand and place a
high value on ultrasound data when making
purchasing decision. On the basis of this
finding, breeders that currently fail to report
these data may want to consider its inclusion