1. Overview of APHIS’ Indemnity Calculators
Stephen L. Ott, Phd
Livestock Appraisal-Indemnity-Compensation Specialist

2. 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

3. 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

4. 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

5. An Animal Located at Its Premise Will Have ____ Value When Compared to Its Upcoming Auction Barn Selling Price
Less
Same
More

6. 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

7. 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

8. 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

9. 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

10. 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

11. Beef Calculator

12. 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

13. 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

14. 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

15. 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

16. Breeding Females Additional adjustments (from other data sources):
if open for breeding cow,
if pregnant for cow-calf pairs,
if breed registered,
regional differences

17. 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

18. Being Breed Registered Impacts Commercial Cow Value
Very little
< 5%
5-10%
> 10%

19. 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

20. 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 lbs is imputed
Bulls: Medium & Large, No. 1; 400 – 750 lbs

21. 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

22. 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

23. 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

24. Dairy Calculators

25. 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

26. 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

27. 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

28. 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

29. 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

30. 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

31. Adjustments
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

32. Price Inputs Springer Holstein Heifer Cull cow price ($/cwt)
Most common of dairy cow prices
19 Auctions across the country
Assume prices are for Holsteins unless stated otherwise
Cull cow price ($/cwt)
From USDA-AMS’ National Weekly Direct Cow and Bull Report of carcasses 500 lbs and up

33. 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

34. 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 (%)

35. 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

36. 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

37. 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

38. 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

39. Poultry

40. Poultry
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

41. Poultry Tables of Values are Generated Broilers: Meat & Breeders
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

42. Swine Calculators

43. Piglets & Feeders Prices
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

44. 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

45. 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

46. Breeding Females Values Generate Price Inputs
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

47. Final Thought Calculators Are a Work-in-Progress Changes Due To:
Data Availability
Alternative – Better Approaches to Determining Value
Seedstock Animals
Feedback from Users
Purpose: my contract information

48. Stephen L. Ott Appraisal-Indemnity-Compensation Specialist (office) (cell)
Purpose: my contract information