marketing cattle

[grassfarmer]

I'm constantly amazed at how poorly most producers market their calves in this country. I grew up with a very different system of selling and it always strikes me as strange how Canadian producers work for a year to produce a calf crop and then give up on the last day, when they unload their calves at the auction. We sold our calves this week and got substantially above the market averages - although this year that still doesn't amount to great money.
I sell weaned, preconditioned calves that are age verified and they have a typed note written up for the auctioneer to read out. I sort my calves backstage because I know them - I know how many lots they will be sold in before they leave home because I have already pulled off any odd sorts and shipped them to a presort. When our calves hit the ring invariably the buyers are all interested in bidding and they don't waste time trying to pull out calves to get them cheaper. I was taught years ago that the best you could do in a commodity market was to have the best quality type of animal suitable for the greatest number of buyers.

I watched 3 hours of calves being sold the other day and couldn't begin to calculate the money being lost by producers due to poor marketing. I would say over 25% of the calves sold were discounted due to being bulls, stags or horned. Then there is the sorting - how can a market employee be expected to know your calves well enough to sort them into even lots? left unchecked I find they often have my heaviest and lightest calf in the same pen - they seem to judge on height rather than weight. I saw one larger entry being sold (90 calves) and the first pen of calves they sold contained 8 steers - 2 red, 3 black, 2 tan and one red white face - some of them horned! Out of 90 calves that's pretty poor uniformity. It is clear many people get into problems because their cowherd contains many and varied genetics but in some cases they seem to use bulls of three or four breeds/colours.

In the 3 hours I saw maybe two other lots that were said to be age verified but the certificates were not produced. A couple of groups were said to be weaned - for how long was not revealed. A couple of groups had a health history with them. I guess a lot of producers just aren't interested in the marketing side, content to stay home and do the production side. I really think they are missing out on a large sum of money by not getting more involved. One trend I note is that the satellite and internet sales attract more of the cattle with health histories, records etc. They seem to attract the bigger and better lots of cattle too although they don't always top the auction ring on prices that can be achieved with a good set of calves that all the buyers want.

I think we need to be aware of this trend - in the UK fat cattle are now largely sold on the hook, via the satellite or internet but the price they are paid is still based on the fats going live through the auction ring. It is another trick packers use to buy cattle cheaply - get the good cattle, in bulk, the way they want them with the price based on the odds and ends going through the auction ring plus a few cents premium. Given that these odds and ends are severely discounted because they don't fit hook selling it has the effect of lowering the overall fat cattle price. I could see the feeder market in Canada going the same direction. In my opinion you can't beat showcasing your calves in the local auction ring with as many buyers as possible competing for them - it is transparent and if you have a pride in your cattle and turn them out right you will be paid for them.

[rookie]

Hey grassfarmer, I 've been wanting to get in touch with you for a while now, and with this chat of this site closing I am taking this opportunity to contact you now, here is my email, and number. In the new year, I hope to touch base with you vslonows@telusplanet.net 780.645.1504

[grassfarmer]

rookie, contact details are on our website www.luingcattle.com get in touch sometime.

[farmers_son]

Grassfarmer: There is marketing and then there is selling. I would tend to think that as long as you are a price taker, and you would be a price taker if you calves are going through an auction, then you are not marketing rather you are selling. In the cattle business, the marketer is the packing plant, the person raising the live cattle would be the prospect. The packing plant sets the price that everyone else down the line works off of. They are the marketer, not you.

If you must sell calves in an auction market the very best way to increase the size of your cheque is to increase the size of your herd thereby having more calves to sell. Yes having the calves dehorned and properly castrated is essential but even the best calves will not sell, especially steers, above the market trend line on a given day no matter what. Sometimes heifers will bring a premium if someone is looking for replacements.

It is my impression that auctions are not real honest. I know for a fact that I have sold calves at a very reputable auction and what my calves weighed in the auction ring was 15% lighter than what they should have weighed even considering crazy high shrinkage. Those calves (850 pounds average) weighed 27% less in the ring than they weighed at home the day before… now something had to be wrong. The auction sale is a sham more than anything else. It is a performance with the auctioneers, ringmen and a couple of buyers (if you are lucky) being the actors. If you cannot trust the scales, then you cannot trust the price. I would trust the scales at a packing plant any day before I would trust the scales at an auction mart.

If you want to do some real *marketing*, insist the trucks are weighed going to the auction and then weighed again after the calves are unloaded. Better yet, have a good scale at home. Make sure the weight of your calves through the ring bears some relation to the weight of the calves you unloaded minus a realistic shrink. There is more money to be gained by knowing what your calves really weigh than by anything else you can do.

My calves do not leave home unless I know the price per pound before they leave. I will not haul them to an auction and have to settle for whatever they bring ever again. Been there, done that.

[cswilson]

The odd time I sell yearlings I sort them at home and get the auction guy to come look before I load-if there's any outs they get taken out at home. They sell in one draft and are told if any shenanigans start with sorting in the ring they'll get no saled. It works well but I don't sell very many cattle through the ring-except cull cows.

[grassfarmer]

Agreed on the auction shrink farmers_son - I have used a home scale since 1985 and know what my calves really weigh. What are you calling the "market trend line" that steers can't sell above?

[farmers_son]

I graph the dollars per head versus the per calf weight of each larger pen of calves (5 or more) by sex going through the ring. After enough graph points are established you can see a trend line for that days sale. I have never seen a pen of steers bring significantly above that line although sometimes heifers will. Lots will bring less though.

[cowman]

About two weeks ago at the presort a rancher sold all his calves seperate...I think about 200 calves. Good calves in fairly big uniform lots and selling right in the "prime time" of the sale. I don't think he made anymore than the other cattle in the sale...and maybe worse on the smaller heifers! The auctioneer pointed him out and gave a little talk about how he used good bulls, age verified, had them all cut, vaccinated etc. He looked pretty glum when it was all over!
A good presort from a good area gives you some pretty even, large lots that sell as good as anything...if not a little better?
The days when a producer got a premium are basically over, as the farmer/feeder who was willing to pay extra for "fancies" are mostly gone?

[grassfarmer]

farmers_son, as I understand you the trend line graph is more simply called the market average? Market averages are made up of highs and lows. I didn't sit and work it out too scientifically but at the sale we sold at the dearest 5 weight steers I saw were $1.11 most were in the $1-$1.05 range. We got $1.2075 which was my point in making this thread about marketing. I believe we get rewarded significantly for making a job of the presentation of our calves. I didn't read of any higher priced 5 weight steers across Alberta this week (or the previous week) until Strathmore yesterday where they show some at $1.22. Strathmore is one of the few that shows an average, yesterday the range was .95-1.22 with an average of 1.13. The top seller got a 9 cent premium on 5 weight calves - that's $45 which I consider significant when you sell a few pens of calves.
I didn't start out to champion the auction ring over internet selling although my original thread may read that way. I still feel the auctioneer can do a good job in a live ring - even among order buyers they can tempt them to bid a little extra in the heat of the moment.
Cowman I think you are talking through a hole in your hat.... it's always some other guy you saw selling and not getting a premium. Clearly the guys with better calves will not get rewarded adequately in a presort although owners of lesser quality calves may. I've yet to hear anyone that has actually made a job of presenting good preconditioned calves in recent years tell me they weren't paid for their work. It's always anecdotal evidence from someone who either has never done it or doesn't believe in it, or someone who tried it once 20 years ago. I've done it for 6 years now and I've been paid for it every time. Preconditioning and presentation are money earners in my opinion whether the market is up or down.

[cowman]

grassfarmer: Just wondering, did you make any money on those pre conditioned, weaned calves? Just wondered why you decided to sell them now...when the market is so bad?
Not trying to be a smartass here just trying to figure out how you see it?
We decided to keep all our calves and feed them out on a cheap hay/straw ration. If price is decent in the spring will pull the trigger on the steers, if not will take them to grass and hope for a strong Aug/Sept yearling market.
Do you think that is a dumb idea?

[cowman]

And grassfarmer, I did it that way until 2000? I went in and fed them with home grown quality hay and presorted them at home and phoned the guy who bought them every year...to make sure he would be at the market? I never just "sent them to the sale"! And I went down and thanked any buyer who bought my cattle, personally!
And I got the auction market guy out a week before to look them over!
Now without a doubt I got a premium. I don't really see that happening too much anymore...sorry if my observations don't live up to your expectations! And I will admit I finally just found it a big conflict of time, because I was getting so involved in the oil field!...But then I've never regretted that as it was a much better return for my time and effort.

[Willowcreek]

cowman-- I don't know if you'll do any better in Aug/Sept--as the futures and all the "experts" are not showing much of anything positive...But if you have the feed and the grass, its probably the best way to get the most money out of them...
But unless some things change drastically fast, I think the US is starting into one of the worst recessions/depressions in a long time--some of the rural areas are already feeling it--and from what I've been reading, it could drag down Canada as badly as the Great Depression did...Some are now forecasting a devaluation of the US dollar by as much as 50%-with the Canadian dollar being even worse...

[farmers_son]

Grassfarmer: I am not talking about a market average. I am talking about the top price paid for a given weight of calves. I can only say I wish I was at the sale to see your calves sell. It would seem possible that if there were only one group of quality calves at a sale and the rest were of lower quality then it might appear that the one group brought a premium. I would question that if the same calves were put with other calves of similar quality if a premium over the other top calves would be realized. Obviously some calves bring more than other calves but you can’t beat the market. There are things you can do to make sure you are not one of those getting the lower price however.

I gather you sell breeding stock. I have seen top purebred breeders sell their cull cows in the ring. These cull cows looked great and literally shone. Although the seller did not get more than the going market price for his culls I would say that there was some good marketing going as a positive impression was formed among the people in the stands who might remember that breeder next spring when thinking about buying a bull.

I put some numbers together a few years ago that showed if an individual could truly get consistently more for his calves, say $45 a head, than the market was paying everyone else that within a generation that individual could own the entire industry. Obviously that would never happen as others clued in to how that person was earning a true premium then they would do the same and the premium would disappear.

[greybeard]

There is no doubt much of what is said here is absolutely true. Good, market ready cattle will always sell better than the type’s grassfarmer describes.
Most of the time markets remind me of pro wrestling. Order buyers pound on the table and glare at each other. Sometimes they will even get up and pace back and forth.
Then things settle down as a bunch of second stringers go through. People doze off or go get coffee. The regulars talk about how so and so really ran that new buyer, taught him a lesson!
In fact, I think most suffer from a severe lack of local buyers. If order buyers are the only ones buying it will be very orderly, as FS points out. We were told years ago that it was cheaper to have an order buyer buy your backgrounder calves. As FS points out the only ones above the trend line are breeding stock purchased buy locals.
Maybe locals bought your calves at a premium, as they will truly benefit from any savings in health. If they are going on a truck with 60 unrelated calves as part of a larger order it’s hard to conceive the true buyer, (not the order buyer) is willing to pay you much premium for either preconditioning or age verified. How do you sort age verified out of a load when there were only two other lots to fill an order from?

[blackjack]

...i think you nailed greybeard...someone one in the crowd wanted grassfarmer's excellent calves that were outside the normal buyers...i have found an order buyer can save me a couple cents a pound or more than if i try to buy my own... personally i like to sell them on the satelite so i know whether i like the price or not...though i just sold some 9 weight hfrs on the showlist i should have saved grass and sold them as 7 weights...lol...as for shrink why would you guys not have your calves weighed at 3%... if your not selling big bunches i have to agree with cowman and the presort...your just asking to get slaughtered if you take them to town and drop them off...