overview of aphis indemnity calculators n.
Skip this Video
Loading SlideShow in 5 Seconds..
Overview of APHIS’ Indemnity Calculators PowerPoint Presentation
Download Presentation
Overview of APHIS’ Indemnity Calculators

Loading in 2 Seconds...

play fullscreen
1 / 48

Overview of APHIS’ Indemnity Calculators - PowerPoint PPT Presentation

  • Uploaded on

Overview of APHIS’ Indemnity Calculators. Stephen L. Ott , Phd Livestock Appraisal-Indemnity-Compensation Specialist. Available Appraisal Calculators (Spreadsheets). Beef Breeding, Unweaned Calves, Feeder-Stockers, Feedlot Dairy Calves, Heifer Replacements, Milk Cows Whitetail Deer

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'Overview of APHIS’ Indemnity Calculators' - gafna

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
overview of aphis indemnity calculators

Overview of APHIS’ Indemnity Calculators

Stephen L. Ott, Phd

Livestock Appraisal-Indemnity-Compensation Specialist

available appraisal calculators spreadsheets
Available Appraisal Calculators (Spreadsheets)
  • Beef
    • Breeding, Unweaned Calves, Feeder-Stockers, Feedlot
  • Dairy
    • Calves, Heifer Replacements, Milk Cows
  • Whitetail Deer
    • Fawns, Bucks, Does
  • Poultry
    • Broilers (meat & breeders), Turkeys (meat & breeders), and Table Egg Layers
  • Swine
    • Breeders, Market Pigs & Hogs
steps in determining value via sales comparison approach
Steps in Determining Value via Sales Comparison Approach
  • Assess Asset Quality
    • Role of VS field personnel
  • Gather Sale Prices of Comparable Assets
    • Role of AICS
    • Field Personnel if doing own appraisal
    • Use publicly reported auction prices
      • Preferably USDA-AMS reported prices
steps in determining value via sales comparison approach1
Steps in Determining Value via Sales Comparison Approach
  • Adjust Value For Quality Differences
    • Appraisal calculators perform this function
    • Consequently, 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
  • Less
  • Same
  • More
premise valuation adjustment
Premise Valuation Adjustment
  • Auction 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 adjustment1
Premise Valuation Adjustment
  • Consequently, 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
  • Live
  • Carcass or Meat
form matters
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 price
    • unweaned calves valued as weaned calves
    • beef steers valued at their direct sale meat value
    • cervids as the value charged for hunting them
form matters1
Form Matters
  • This higher value desired is associated with a change in future condition
    • Lighter to Heavier
    • Unweaned to Weaned
    • Live to Harvested
  • Change in form has a cost
    • When 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 calculator1
Beef Calculator
  • Originally Developed by Dr. Darrel Peel, Beef Marketing Specialist, Oklahoma State University
    • For Commercial Herds
    • Breeding 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 2014
    • Also for Commercial Herds
breeding females
Breeding Females
  • Both Breeding Cows and Cow-Calf Pairs
  • Based upon regression analysis of USDA-AMS Oklahoma auction prices
    • Only Oklahoma auctions included quality and black hide parameters in their price reporting
breeding cows regression equation
Breeding Cows Regression Equation
  • Value ($/head) is a function of
    • slaughter value (weight x cull cow price),
    • age,
    • 400 lb feeder price,
    • pregnancy statue (1st, 2nd, 3rd trimester),
    • if high quality,
    • if black hide
cow calf pair regression equation
Cow-Calf Pair Regression Equation
  • Value ($/pair) is a function
    • slaughter value (cow weight x cull price),
    • age,
    • calf value (calf weight x calf price),
    • if high quality,
    • if black hide
breeding females1
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 females2
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
breeding bulls cull cow
Breeding Bulls & Cull Cow
  • Prices 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 stockers
Feeders & Stockers
  • Prices from Oklahoma auction markets
    • Steers: Medium & Large, No. 1; 300 – 1000 lbs
    • Heifers: Medium & Large, No. 1; 300 – 950 lbs
      • Price for 950-1000 lbs is imputed
    • Bulls: Medium & Large, No. 1; 400 – 750 lbs
feeders stockers1
Feeders & Stockers
  • Adjustments
    • Regional Differences from Peel’s feeder cattle calculator
    • Holstein Steers: 75% of Beef Steer prices
    • No adjustment for black hide, already top quality
  • User Data Entry: weight, sex, region, if Holstein
feeders stockers unweaned calves
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
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
milk cow calculator
Milk Cow Calculator
  • Has been in use for several years
    • Five major revisions, plus minor adjustments
    • Last 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 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
Total Expected Milk Production
  • Expected remaining lactations
    • Based 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
Value of Expected Calf Production
  • Expected number of calves a function of expected number of remaining lactations
    • Adjusted 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
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
Individual Cow Appraisal Value
  • Appraisal Value ($/head) =
  • + Value of expected milk production
    • Per 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) value
    • Current weight x cull cow price
      • Cull cow price is function of both weight (discount for being light) and quality grade
  • Other 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 $)
    • Generally for breed registered cows
  • Two Regions: East and West of Mississippi River
price inputs
Price Inputs
  • Springer Holstein Heifer
    • Most common of dairy cow prices
    • 19 Auctions across the country
    • Assume prices are for Holsteins unless stated otherwise
  • Cull cow price ($/cwt)
    • From USDA-AMS’ National Weekly Direct Cow and Bull Report of carcasses 500 lbs and up
user input parameters
User Input Parameters
  • The Milk Cow Calculator is very user data intensive
    • 11 user entered parameters
  • Good News: the calculator has default values for every input parameter
    • Some default values are a function of breed and lactation
milk production parameters
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-milk
    • Lactation
cull cow parameters
Cull Cow Parameters
  • Current weight (lbs):
    • Cull price is reduced for cows having carcass less than 500 lbs
    • Default cull weights are function of breed and lactation
  • Quality grades: premium white, commercial (aka breaker), utility (aka boner), or cutter/canner
    • Default values:

1st lactation: commercial;

2nd lactation: utility;

3rd lactation and greater: cutter

pregnancy status
Pregnancy Status
  • Probability will be pregnant by 280 days-in-milk
    • If 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
Breed Registered Parameters
  • If registered, initial value is increased by $50
    • Value of improved genetics is reflected in milk production and value of calves sold
  • Net Merit $ Value
    • Positive value increases calf value
    • Default value is $0
dairy replacement calculator
Dairy Replacement Calculator
  • Price Inputs
    • Holstein springers, Holstein short-breds, Holstein bull & heifer calves, beef feeder prices
  • Appraisal values are linear Interpolation between above values
    • With increases for being weaned and bred
  • Breed Adjustment based upon relative appraisal value of 1st lactation, 0 DIM cows
  • East and West Regions
  • Value 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
  • Tables of Values are Generated
    • Day-of-age for meat birds
    • Week-of-age for breeders
  • Broilers: Meat & Breeders
  • Turkeys: Meat & Breeders
  • Table Egg Layers
  • User Data Requirement: bird type, number of head, age
piglets feeders
Piglets & Feeders
  • Prices
    • 10 -12 lb early weaned pigs
      • Assume 11 lb
    • 40 lb feeder pigs
    • USDA-AMS’ National Direct Feeder Pig Report
  • Value: linear interpolation between 11 lb piglet and 40 lb feeder
  • Assumed Quality: No. 1 & 2
    • Discount if No. 3 or 4
  • User Data Entry: number of animals in each weight - quality category
grower finishers slaughter hogs
Grower-Finishers & Slaughter Hogs
  • Grower-Finisher Value
    • Price: USDA-AMS’ Weekly Direct Swine Report
    • National Negotiated Live (slaughter) price
    • Base weight: 240 lbs
    • Linear interpolation between

40 lb & 240 lb values

  • Slaughter Hog Value
    • Weight x Slaughter Price
  • Discount if No. 3 or 4 Quality
  • User Data Entry: number of head in each weight – quality category
breeding females3
Breeding Females
  • Income Approach
    • Sow value function of expected number of weaned piglets produced and their value
    • Cost based upon Iowa State University Extension farrowing budget
    • Positive gross margin generates a premium for breeding gilts
      • 10% of gross margin is allocated back to gilt value
      • Also value of weaned gilts
    • Use value of weaned gilts to determine value of sows in multiplier herds
breeding females4
Breeding Females
  • Values Generate
    • Commercial Herds: Gilt – 9th Parity
    • Multiplier Herds: Gilt – 6th Parity
  • Price Inputs
    • Early Weaned Piglets
    • Sow Slaughter Prices
    • Corn & Soybean Meal Prices
  • User Data Entry: number of females in each herd type – parity combination
final thought
Final Thought
  • Calculators Are a Work-in-Progress
  • Changes Due To:
    • Data Availability
    • Alternative – Better Approaches to Determining Value
    • Seedstock Animals
    • Feedback from Users
Stephen L. OttAppraisal-Indemnity-Compensation Specialist970-494-7239 (office)970-2178692 (cell)Stephen.L.Ott@aphis.usda.gov