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Overview of APHIS’ Indemnity Calculators
Stephen L. Ott, Phd
Livestock Appraisal-Indemnity-Compensation Specialist
Available Appraisal Calculators (Spreadsheets)
BeefBreeding, Unweaned
Calves, Feeder-Stockers, Feedlot
DairyCalves, Heifer
Replacements, Milk Cows
Whitetail DeerFawns, Bucks, Does
PoultryBroilers (meat &
breeders), Turkeys (meat & breeders), and Table Egg Layers
SwineBreeders, Market Pigs
& Hogs
Steps in Determining Value via Sales Comparison Approach
Assess Asset QualityRole of VS field personnel
Gather Sale Prices of Comparable AssetsRole of AICS Field Personnel if doing own appraisalUse publicly reported auction prices
Preferably USDA-AMS reported prices
Steps in Determining Value via Sales Comparison Approach
Adjust Value For Quality Differences Appraisal calculators perform this functionConsequently, their appraisal values should
be viewed as market based values
An Animal Located at Its Premise Will Have ____ Value When Compared to
Its Upcoming Auction Barn Selling Price
A. Less
B. Same
C. More
33% 33%33%
Premise Valuation AdjustmentAuction Sale Prices: prices paid by buyers
Seller pays commission, yardage fees, check-off funds
Also animals must be transported to the auction barn
Premise Valuation AdjustmentConsequently, the net value received by an owner for selling an animal equals the selling price minus various marketing and transportation costs
This net value to the owner is what the calculators attempt to estimate
If a Ranch’s Business is Producing Beef for Direct Sale to Consumers, Then Animal Value Should Based
Upon Its ____ Form
A. Live
B. Carcass or Meat
50%50%
Form Matters
Calculators are for current condition of the animal at time of depopulation, i.e. live
Some producers will argue they should receive their planned future selling priceunweaned calves valued as weaned
calvesbeef steers valued at their direct sale
meat valuecervids as the value charged for hunting
them
Form MattersThis higher value desired is associated with a change in future conditionLighter to HeavierUnweaned to WeanedLive to Harvested
Change in form has a costWhen additional costs are accounted current market
value is obtained
This extra value could also be thought as revenue and APHIS doesn’t pay for lost revenue
Beef Calculator
Beef Calculator
Originally Developed by Dr. Darrel Peel, Beef Marketing Specialist, Oklahoma State UniversityFor Commercial HerdsBreeding Values are function of national
slaughter value for 500 lb cutter grade carcass with fixed regional adjustments
Feeder Values based upon Oklahoma market prices with fixed regional adjustments
Complete Revision for 2014Also for Commercial Herds
Breeding FemalesBoth Breeding Cows and Cow-Calf Pairs
Based upon regression analysis of USDA-AMS Oklahoma auction pricesOnly Oklahoma auctions included quality and
black hide parameters in their price reporting
Breeding Cows Regression Equation
Value ($/head) is a function of slaughter value (weight x cull cow price), age, 400 lb feeder price, pregnancy statue (1st, 2nd, 3rd trimester), if high quality, if black hide
Cow-Calf Pair Regression Equation
Value ($/pair) is a functionslaughter value (cow weight x cull price), age, calf value (calf weight x calf price), if high quality, if black hide
Breeding Females
Additional adjustments (from other data sources): if open for breeding cow, if pregnant for cow-calf pairs, if breed registered, regional differences
Breeding Females
User Data Entry: cow weight and age, calf weight (if applicable), pregnancy status, if high quality, if black hide, if breed registered, region
Being Breed Registered Impacts Commercial Cow Value
A. Very little
B. < 5%
C. 5-10%
D. > 10%
Very little
< 5%5-10%
> 10%
67%
0%0%
33%
Breeding Bulls & Cull CowPrices based upon USDA:AMS’ National Weekly Direct Cow and Bull Report
Cull cow grades: premium white, breaker (commercial), boner (utility), cutter (canner)
Bulls, single meat grade
Regional Adjustment
User Data Entry: weight, cull cow grade, region
Feeders & StockersPrices from Oklahoma auction marketsSteers: Medium & Large, No. 1; 300 – 1000 lbsHeifers: Medium & Large, No. 1; 300 – 950 lbs
Price for 950-1000 lbs is imputed
Bulls: Medium & Large, No. 1; 400 – 750 lbs
Feeders & StockersAdjustmentsRegional Differences from Peel’s feeder cattle
calculatorHolstein Steers: 75% of Beef Steer pricesNo adjustment for black hide, already top quality
User Data Entry: weight, sex, region, if Holstein
Feeders & Stockers: Unweaned Calves
Useful if need to split pairs, value cow as breeding female and calf as unweaned calf
A slide factor from analysis of light weight calves at Dodge City, KS auction is used to adjust feeder prices
Adjustments for regional differences
No adjustment for quality or black hide
User Data Entry: calf weight and sex, region of country
Fats or Feedlot
National value for animals 1000 - 2000 lbs
Prices from AMS’ National Weekly Direct Slaughter Cattle Report—Formulated and Forward Contract
Cattle type: beef steers, beef heifers, dairy steers & heifers
Grade: choice & select
Prices adjusted downward if carcass weight is greater than 900 lbs
Data Entry: number head in each cattle type, weight, and grade categories
Dairy Calculators
Milk Cow Calculator
Has been in use for several yearsFive major revisions, plus
minor adjustmentsLast major revision: May,
2013
Earlier version reviewed by Dr. David Anderson, Professor and Extension Economist, Texas A&M University
Appraisal Value of a Dairy Cow
Appraisal value is based upon expected value of future dairy production plus current cull value
It is determined through a combination of sales comparison and income appraisal methodologies
Total Expected Milk Production
Expected remaining lactationsBased upon published analysis of Dairy Herd
Improvement (DHI) data
Total Expected Milk Production (lbs / cow)
= expected remaining lactations
x DHI average milk production (lbs / cow)
for both Holsteins & Jerseys
Value of Expected Calf Production
Expected number of calves a function of expected number of remaining lactationsAdjusted for stillborns and death loss
at calving
Expected Value ($ / cow)
= expected calves
x calf price (avg. of male & female)Calf prices from Dairy Replacement
Calculator
Milk Production Premium
Total milk production premium ($/cow)
= Springer price (Holstein & Jerseys)
– avg. cull value (Holstein & Jerseys)
– value of expected calves to be born
Per pound milk production premium
= total milk production premium
÷ total expected milk production
of DHI avg. Holstein or Jersey
Individual Cow Appraisal Value
Appraisal Value ($/head) =
+ Value of expected milk productionPer pound milk production premium x 305
ME milk production x expected remaining lactations
+ Value of expected calf production expected births x newborn survival rate x
calf price
+ Salvage (cull) valueCurrent weight x cull cow price
Cull cow price is function of both weight (discount for being light) and quality grade
AdjustmentsOther breeds use their own weight, but use Holstein per pound milk production premium and calf value
Milk production is adjusted to reflect the impact butterfat content has on milk price
Increase calf value if have a positive Predicted Transmitting Ability Net Merit score (Merit $)Generally for breed registered cows
Two Regions: East and West of Mississippi River
Price Inputs
Springer Holstein HeiferMost common of dairy cow prices19 Auctions across the countryAssume prices are for Holsteins unless stated
otherwise
Cull cow price ($/cwt)From USDA-AMS’ National Weekly Direct
Cow and Bull Report of carcasses 500 lbs and up
User Input Parameters
The Milk Cow Calculator is very user data intensive11 user entered parameters
Good News: the calculator has default values for every input parameterSome default values are a function of breed
and lactation
Milk Production Parameters
Lactation
305 ME production (lbs)
305 ME Milk Butterfat (%)
Days-in-milk
Alternatively: Have calculator determine 305 ME based on:Daily Milk Production (lbs)Herd Milk Production Avg. (lbs / cow)Milk Butterfat (%) Days-in-milkLactation
Cull Cow ParametersCurrent weight (lbs): Cull price is reduced for cows having
carcass less than 500 lbsDefault cull weights are function of
breed and lactation
Quality grades: premium white, commercial (aka breaker), utility (aka boner), or cutter/cannerDefault values:
1st lactation: commercial;
2nd lactation: utility;
3rd lactation and greater: cutter
Pregnancy StatusProbability will be pregnant by 280 days-in-milkIf open too many days-in-milk, then
pregnancy probability begins to decline
Value less than 100% reduces number of expected future lactations
Default 100% if < 180 DIM, then declines to 0% by 280 DIM
0% probability implies the cow will be culled at end of current lactation
Breed Registered Parameters
If registered, initial value is increased by $50Value of improved genetics
is reflected in milk production and value of calves sold
Net Merit $ ValuePositive value increases calf
valueDefault value is $0
Dairy Replacement Calculator
Price InputsHolstein springers, Holstein short-breds, Holstein bull
& heifer calves, beef feeder prices
Appraisal values are linear Interpolation between above valuesWith increases for being weaned and bred
Breed Adjustment based upon relative appraisal value of 1st lactation, 0 DIM cows
East and West Regions
Poultry
PoultryValue Determined Using Income and Cost-of-Production Appraisal Methodologies
Based upon industry cost and productivity data supplied by Agri-Stats, a benchmarking company
Wholesale meat – egg prices from USDA:AMS
10% of gross margin is allocated back to bird value
Poultry
Tables of Values are GeneratedDay-of-age for meat birdsWeek-of-age for breeders
Broilers: Meat & Breeders
Turkeys: Meat & Breeders
Table Egg Layers
User Data Requirement: bird type, number of head, age
Swine Calculators
Piglets & FeedersPrices10 -12 lb early weaned pigs
Assume 11 lb
40 lb feeder pigsUSDA-AMS’ National Direct Feeder Pig Report
Value: linear interpolation between 11 lb piglet and 40 lb feeder
Assumed Quality: No. 1 & 2Discount if No. 3 or 4
User Data Entry: number of animals in each weight - quality category
Grower-Finishers & Slaughter HogsGrower-Finisher ValuePrice: USDA-AMS’ Weekly Direct Swine Report National Negotiated Live (slaughter) priceBase weight: 240 lbsLinear interpolation between
40 lb & 240 lb values
Slaughter Hog ValueWeight x Slaughter Price
Discount if No. 3 or 4 Quality
User Data Entry: number of head in each weight – quality category
Breeding FemalesIncome ApproachSow value function of expected number of weaned
piglets produced and their valueCost based upon Iowa State University Extension
farrowing budgetPositive gross margin generates a premium for
breeding gilts10% of gross margin is allocated back to gilt valueAlso value of weaned gilts
Use value of weaned gilts to determine value of sows in multiplier herds
Breeding Females
Values GenerateCommercial Herds: Gilt – 9th ParityMultiplier Herds: Gilt – 6th Parity
Price InputsEarly Weaned PigletsSow Slaughter PricesCorn & Soybean Meal Prices
User Data Entry: number of females in each herd type – parity combination
Final ThoughtCalculators Are a Work-in-Progress
Changes Due To:Data AvailabilityAlternative – Better
Approaches to Determining Value
Seedstock AnimalsFeedback from Users
Stephen L. OttAppraisal-Indemnity-Compensation Specialist
970-494-7239 (office)970-2178692 (cell)
