Why A Grading System Is Used: A grading system provides a common language for describing various types of cattle. Transactions can be made without a buyer seeing the cattle. In the case of feeder cattle, a grading system allows one to predict the feedlot performance and carcass characteristics of the finished cattle. The current United State Department of Agriculture (USDA) grading system is based on frame size and muscle thickness (USDA, 1980).
Nine possible combinations (three frame sizes, three muscle thicknesses) of feeder cattle grades exist for thrifty animals, as well as an Inferior grade for unthrifty animals. The Inferior grade includes feeder cattle which are unthrifty due to mismanagement, disease, parasitism, or lack of feed. An animal grading Inferior can qualify for a muscle thickness and frame size grade at a later date, provided the unthrifty condition is corrected. "Double-muscled" animals are included in the Inferior grade, although such animals have a large amount of muscle. They are graded U.S. Inferior because of their inability to produce carcasses with a "standard degree" of marbling (intramuscular fat).
Frame
Frame size is used because frame is an inherited trait that is
not greatly affected by normal management practices. Larger frame
cattle typically reach an equal backfat thickness at heavier
weights than smaller frame cattle. The three frame scores used
are Large, Medium, and Small,
referred to as L, M, and S,
respectively.
Large Frame (L): Large frame cattle are thrifty, tall and long bodied for their age. Steers would be expected to produce the amount of external fat opposite the 12th rib normally associated with the U.S. Choice grade when their live weight exceeds 1200 pounds (usually .5 of an inch). Heifers would be expected to produce Choice carcasses when their live weight exceeds 1000 pounds and external fat at the 12th rib is .5 of an inch.
Medium Frame (M): Medium frame cattle are thrifty and moderate in height and body length for their age. Steers would be expected to produce U.S. Choice carcasses with about .5 of an inch fat at 12th rib at live weights of 1000 to 1200 pounds. Heifers would be expected to produce Choice carcasses with about .5 of an inch of fat at the 12th rib at live weights of 850 to 1000 pounds.
Small Frame (S): Small frame cattle are thrifty but are shorter in height and body length than specified for Medium frame cattle. Steers would be expected to produce U.S. Choice carcasses with about .5 of an inch fat at 12th rib at live weights less than 1000 pounds. Heifers would be expected to produce Choice carcasses with about .5 inch of fat at the 12th rib at live weights of less than 850 pounds.
Putting A Frame Grade On A Calf: The frame size portion of the grade standard must be determined by an evaluation of the animal's skeletal size in relation to its age. For example, two feeder cattle with the same height and body length but differing substantially in age would not be the same frame size. The appearance of feeder cattle can be use to estimate age. As feeder cattle mature, their ears decrease in size in relation to their heads; the muzzle becomes wider; the head becomes longer in relation to its width; and the tail increases in length and exhibits a more prominent switch.
Frame size and breed should not be automatically equated (Boyles et al., 1992). It is very possible for the larger cattle in a small mature size breed to be as large as the smaller cattle in large mature size breed.
| Large Frame | |
| Tall and long for age | Half inch of fat-12th rib Steers, 1200 lbs or more Heifers, 1000 lbs or more |
| Medium Frame | |
| Slightly tall and slightly long for age |
Half inch of fat-12th rib Steers, 1000-1200 lbs Heifers, 850-1000 lbs |
| Small Frame | |
| Small frame and shorter-bodied for age |
Half inch of fat-12th rib Steers, less than 1000 lbs Heifers, less than 850 lbs |
(Minish and Fox, 1982)
Thickness
Thickness is related to the muscle-to-bone ratio at a given degree of fatness to carcass yield grade. An example would be a thinly muscled animal having a Choice, Yield Grade 3 carcass, while the carcass of a thickly muscled animal may be Choice, Yield Grade 2. The three muscle thickness grades are designated by Number 1, Number 2, and Number 3.
Fat can visibly alter the perception of muscling. Therefore muscle thickness is appraised at a constant degree of fatness (slightly thin). Some feeder cattle may carry more than a thin degree of fat and should be appraised for the degree of muscling they would have possessed at a slightly thin fat cover.
Number 1: Number 1 muscle thickness feeder cattle typically have a high proportion of beef breeding. They must be thrifty and thick throughout. They are full in the forearm and exhibit muscularity over the back and through the loin with moderate width between the legs. Cattle can exhibit thickness with even a slightly thin covering of fat; however, cattle eligible for this grade may carry varying degrees of fat.
Number 2: Number 2 muscle thickness feeder cattle are thrifty and somewhat narrower throughout both the fore- and hindquarters. The forearm is thin and the back and loin have a sunken appearance. The legs are set closer together. Cattle exhibit this narrowness with a slightly thin covering of fat; however, cattle eligible for this grade may carry varying degrees of fat.
Number 3: Feeder cattle in this grade are thrifty and have less thickness of muscle than the minimum requirements specified for the Number 2 grade.
Summary
The USDA Feeder Cattle Grading System or any other system you use is a method of sorting cattle. Ideally, cattle should be sorted into similar types and sizes for a uniform nutrition program for all the animals in a pen. A certain amount of sorting may still need to be done when cattle arrive at the feedlot. Because of the genetic variation in cattle and the lag time associated in filling the feedlot, more than one feeding pen is recommended.
DEVELOPING A PRICE FOR CATTLE
A simple way to evaluate cattle feeding and marketing alternatives is to use "break-even" analysis. This is a way of comparing total cost and total return at various output levels. When returns equal cost, the operation is breaking even (Paine and Garton, 1972). To calculate a break-even point, use the following formula:
[(IW X IP) + (G X C)]/FW = FP
IW is the initial weight purchased
IP is the initial price of the animal going into
the program
G is the expected pounds of gain during the
feeding program
C is the cost per pound of gain
FW is the final weight sold
FP is the final price needed to break-even on
the investment
Example 1:
Suppose a 500-pound feeder that cost $.78 per pound is fed to
make a net gain of 200 pounds at an expected cost of 50 cents per
pound of gain. The resulting final weight will be 700 pounds.
What is the final price needed to cover cost of investment?
IW = 500 IP = 0.78 G = 200 C = 0.50 FW = 700 FP = ?
[ (500 x .78) + (200 x 0.50)] / 700= $0.70
The equation for developing a break even price is relatively simple. Determining accurate numbers is another matter. Economic projection articles and local auction barn prices are a good place to start for cattle prices. Gain projections may need to be obtained from personal experience or you might check with other producers that have similar feeding programs. The real "pencil sharpening" is on cost of gain. Standard components in cost of gain are feed, vet, electric, labor, interest, marketing, and other yardage charges.
Calculating a Break-Even: Purchase Price
Another way to use the break-even analysis formula is to work it backwards to determine the break-even purchase price, break-even cost of gain, weight of steer or heifer to purchase, or amount of gain to try to put on in the feeding program.
Example 2:
Suppose a cattle producer thinks they can sell 1100 pound cattle
$.63 per pound. In their pervious experience, gains have been 2.7
pounds per day. They can purchase calves that weigh about 550
lbs. The estimate for cost of gain is $.51 per pound of gain.
What is the most they can pay for these calves?
IW = 550 IP = ? G = 550 (1100-550) C = $0.51 FW = 1100 FP = $0.63
[ (550 x ?) + (550 x 0.51) ]/ 1100= $0.63
(550 x ?) + (280.50) = 0.63 x 1100
550 x ? = 693 - 280.50
? = 412.50/550
? = $0.75
If your algebra skills aren't what they used to be, the following formulas can be used to answer the following questions.
Summary
Break-even analysis will allow the feedlot operator some idea of
how much they can pay for their calves. Breakeven prices can be
calculated for the entire feeding period or only a certain part
of the feeding program. By looking at different parts of the
feeding program (e.g. growing versus finishing) a producer can
determine where the most returns to labor and management can be
obtained.