Cost of Living

A $140,000 lesson in the economics of bovine genetics and breeding

An "exquisite" specimen of female Angus sold at auction in southern Alberta for a record $140,000 this month. But what are the economics behind a very expensive cow?

The Cost of Living digs into the numbers behind the record sale of a cow

The U2 Ranch catalogue describes 109z as "the most influential cow to walk our pastures. She is admired by all with her unique blend of massive power and exquisite femininity." (U2 Ranch Complete Herd Dispersal Catalogue )
Listen5:48

A black Angus cow from Coaldale, Alta. sold for a record $140,000 earlier this month, setting a record for a southern Alberta auction house and the industry as a whole.

Listed as U2 Erelite 109z in the auction catalogue, the sale was part of U2 Ranch Ltd.'s complete herd dispersal, held at the Perlich Bros. Auction Market in Lethbridge, Alta.

It was standing room only at the auction, with buyers from Canada, the United States, Mexico and Europe all hoping to get the chance to own the prized animal.

I don't think there was anybody there that expected that kind of price range.- Ken Perlich, Perlich Bros. Auction Market

"The sale started on Monday, Nov. 12," recalls Ken Perlich, one of the five family partners who own and operate the auction.

"We sold all through the red [Angus] and the top seller there was $65,000. That was very impressive. Then the next day when the black [Angus] came in, they topped-out the the two-day sale at at $140,000. That was truly amazing," Perlich said. 

Ken Perlich is one of the five family partners who own and operate Perlich Bros. Auction Market in Lethbridge, Alberta. (Tracy Fuller/CBC)

"I think the [seller's] family was surprised. We were surprised," Perlich said.

"I don't think there was anybody there that expected that kind of price range."

Cow had a "unique blend of massive power and exquisite femininity"

The auction catalogue included a detailed description of the $140,000 cow.

"109z is the most influential cow to walk our pastures," it reads.

"She is admired by all with her unique blend of massive power and exquisite femininity. She and her daughters are beyond compare for teat spacing and udder quality."

Every rancher is looking for different traits in a bred cow to improve the quality of their herd. The Canadian Angus Association evaluates about 25 different traits.

The full catalogue description for the $140,000 black Angus cow sold at auction in Alberta on November 12, 2019. (U2 Ranch Complete Herd Dispersal Catalogue)

That's why there's so much detail in the auction catalogue descriptions like those listed above.

"[109z] ranks in the top one percent for Weaning Weight, Yearling Weight and Total Maternal Value. Since 2015 she has had a perfect production record and turned into a very productive donor," read the catalogue.

Doing the $140,000 math

$140,000 seems like a lot of money for one cow to many outside the cattle industry.

But insiders say that a price for bovine that's higher than a Buick shouldn't be a surprise.

Cows await auction in the yard outside Perlich Bros. Auction Market in Lethbridge, Alta. (Tracy Fuller/CBC)

"It's not uncommon for an Angus female to sell for $25,000 up to $50,000," said Myles Immerkar, Chief Executive Officer of the Canadian Angus Association. 

Many Angus bred cows will sell for $1,000 to $2,500 each.

It's about total maternal value

When it comes to 109z specifically, Immerkar says the value of that cow came down to her total maternal value.

If you're buying 109z, you're not buying her for meat. You're buying her for her production record and her pedigree.

When it comes to her breeding potential, 109z is a pregnant 8-year old cow. She's no spring chicken, but in those years she's proven herself.

All three of her sons have sold to purebred herds. One bull, named Coalition, sold for $32,000. Another called Temptation sold for over $47,000.

Selective breeding to better the herd

While 109z is entering her twilight years, she's not done producing yet.

She's likely got another two to seven breeding years left in her.

Every year she'll give birth to a single calf and produce another 25 to 30 embryos, which can be transplanted into surrogate cows or sold for hundreds of dollars each.

If all goes well, 109z could produce over two dozen calves every year for the rest of her fertile life, which could mean hundreds of thousands of dollars.

Breeding better beef

So what does all this mean for the average Canadian beef eater? 

Nothing directly. You're never going to find cuts from a $140,000 dollar animal on sale at Safeway or Loblaws.

However, the meat from her lineage will eventually end up on your kitchen table because 109z's progeny will pass her expensive genetics to the greater North American Angus herd.

Some of those genes will end up in the commercial sector, which provides meat for fine butchers, steak houses — even on the menu at mass-market burger chains such as McDonalds or Harvey's.

Red Angus cows are sorted according to when they are expected to calve. These beauties await auction in a shed outside Perlich Bros. Auction Market. (Tracy Fuller/CBC)

Genes matter because producers are always striving to breed better beef.

Science can't help us grow a better burger, so instead it helps the herd through selective breeding.

A historic day for the auction and the industry

"Well, certainly [109z] is a record within our association in Canada for a female selling," said Myles Immerkar, Chief Executive Officer of the Canadian Angus Association.

"Earlier this year we did have another record where a bull sold for $200,000," he said. 

Myles Immerkar, Chief Executive Officer of the Canadian Angus Association, says the record sale of 109z helps all Angus breeders in Canada. (Submitted by Myles Immerkar)

At the Perlich Bros. Auction, the sale of 109z will stand as an important day in the market's 52-year history.

"It was a historic thing for not just the cattle industry or the Angus industry but for our family business," said Maureen Perlich-Kasko, who was on the block during the historic sale. 

"I don't think we'll ever be a part of anything so momentous. It's something we're very proud of, that it got to happen here and that we were a part of that day."


Written and produced by Tracy Fuller. 

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.