Come on, really? A bull sells for $800,000? How’s that possible? What’s the return on investment on something like that? All questions that went through my head when I first heard that Schaff Angus Valley sold a registered Angus bull for $800,000. After a quick scan on Facebook on the announcement and the comments I began to see were people questioning why on Earth someone would spend $800,000 on a 14 month old bull. Well, here are a few numbers for you to chew on. I went and looked at the list of top 25 sires for registrations (http://bit.ly/2GmSs3U) on the American Angus Association website and found that number 1 for 2017 was RB Tour of Duty 177 at 5,837 calves registered. Number 2 on that list was Quaker Hill Rampage 0A36 at 5,557. So, in 1 year you have the top Angus bull in the breed registering close to 6,000 calves and each one those calves more than likely represents a unit of semen sold. If you do a quick look at the price of semen on RB Tour of Duty 177 you’ll see that it costs $30.00 for a single straw. If you buy in bulk the price goes down a little bit, but let’s just stick with that number.
5,837 calves registered x $30.00 (single straw of semen) = $175,110. Not bad, right? It doesn’t end there, though. You still have to buy an AI Certificate for each one of those calves that gets registered. And most of the time the AI Certificate is just as much or more than the price of the semen.
5,837 calves registered x $35.00 (going rate for AI Certificate on RB Tour of Duty 177) = $204,295. Not bad, huh? That would show a return of $379,405 in one year to Riley Brothers Angus of Darlington, Wisconsin.
That made me think, what other bulls have been out there a long time and producing mass amounts of calves?
After further research I came across an article from Drovers (http://bit.ly/2sy6he0) that talked about one of the legendary Angus sires that passed away in 2014, GAR Predestined. The 14-year-old Angus sire earned enormous industry acceptance and is one of the all-time top semen selling beef bulls at Select Sires according to the Drovers article and also is on record for selling more than 265,000 units of semen. Wow!! Also, as of January 1, 2014 there were more than 36,649 of his progeny registered with the American Angus Association. Still thinking that $800,000 purchase was unwise? Let’s run some hypothetical numbers here just for grins.
If SAV Elation 7899 was to sell over 265,000 units of semen at $30.00 a pop that would equal $7,950,000 over the lifetime of that bull. Oh, and don’t forget about those AI Certificates. Let’s just say SAV Elation 7899 had over 36,000 progeny registered (similar to GAR Predestined) at $35.00 a piece that would equal $1,260,000. So, over the lifetime of a bull that sold for $800,000 it now shows a potential return of $9,210,000. Who’s laughing now?
Now, I realize that this is all hypothetical. This bull is still 14 months old and has yet to produce a single calf. However, it is important to look at the genetics on this bull. GAR Predestined who sold more than 265,000 units of semen was a direct descendent of B/R New Design 036 and his dam was sired by N Bar Emulation EXT, which traces back to the same bull that sired SAV Elation 7899 so that’s a good sign. Only time will tell, but from the outside looking in, it might not have been a bad purchase after all. Congratulations to the crew at Schaff Angus Valley for their years of hard work building a genetic package like that and also congratulations to Square B Ranch & Cattle Company of Warsaw, Mo and Bogle Ranch LLC of Langley, Ok.