marketing cattle

[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...

[grassfarmer]

Been away all day so there are lots to reply to.
Cowman, Yes I made money with my calves, I'm a low cost producer remember with crazy ideas like calving on grass and feeding cows some straw. In fact the calculation I ran for a discussion with kpb a while back shows that I broke even with the calves over the weaning to sale period. Given the estimated off cow values this year and the price collapse there has been since then I think this is no mean feat. It proves that by differentiating my calves from the crowd by adding value in terms of animal health and buyer appeal I am earning a lot of extra income most years by this process. I am selling now because I do not have confidence we can make more net income with this calf crop however long we keep them. If the markets move lower in the spring we have the option to buy cheaper calves although this would require renting summer grass and as we increasingly seem to be getting constricted in this industry to working on $20 margins (if we are lucky). I think I'd rather just send a cheque to my investment advisor who can earn me a 15% return with no work on my part and probably less risk than the cattle.

F_S, your trend line still doesn't seem very different from comparing your cattle to the average. Maybe comparing to the market average was the wrong terminology I used. I was in fact comparing them to cattle in the same weight range and in lots of more than 5 head. Bottom line comes out the same we still got close to 10 cents above the trend line by my rough calculation.

Greybeard, I think that it is easier now than ever before for feedlots or any buyer to keep track of where the animals came from - the eid tag will tell them and I'm sure the feedlots will look for this data. I know I am selling cattle that will not give them health problems - our death loss from weaning to sale (usually anywhere from 2-5 months) has been 0.4% over the last 6 years. Given the rate of pulls, treatments, deaths and poor performance sick calves give the feedlots they do want healthy calves.

Blackjack, we had quite a healthy ring of buyers - around 12 main ones. Three guys buying cattle for their (or a neighbours) farm feedlot operations. About 3 larger feedlot buyers and the rest order buyers. We had 6 different buyers on 9 pens of cattle so there was a wide base of interest in the calves. My top price 5 weight calves were bought for a guy who is going to background them and grass them next summer.

[rkaiser]

Hate to throw a curve at you grassfarmer---- but why not go another step further? You have already made a step into the purebred door --- why not go at it whole hog and show the ultimate pride in your product and confidence in your choice? Yes the purebred thing takes a bit more time and energy; even more yet than your auction barn prowess. But there is not more pure free market left on this planet that compares to a good honest bull auction.

Competition drives you, and success is measured by your ability to retain customers; first with acceptance and then satisfaction.

I still have to market my cull cows from time to time through the auction barn, and dread that trip to town each time. The only thing that keeps me entertained about the trip is the bows on the backs of those cows, that I have no choice but to gift to some lowly industry scoundrel. Our cull steers and heifers continue to be custom finished and marketed through choices other than the multinational pirates unless I am backed into a corner. No room for middle men in my world - they all have families to feed, but mine comes first.

Just my two bits folks. Hope you all have a great Christmas and 2007 puts a few extra bucks in your pocket for those things you want the most.

[cowman]

grassfarmer: Thanks for giving me your insight into how you see this market. I always like to see how other people think.
I've decided to roll the dice on these calves. I don't expect to make a lot(or maybe any) money on these calves...but who knows! A big crop everywhere next year, an open border to older cattle...maybe another big blow up in the middle east? Could make for a hot market next fall!
Maybe I am an eternal optomist! LOL

[cowman]

Willowcreek: Tell me more about this impending disaster? How do you see that coming about? I thought you boys had pretty well elected the smartest bunch of politicians in the world and were going to clean up the evil Bush administration?
Is a devaluation of 50% in the American dollar realistic? Who tells you this stuff?
As for following the "experts"...well I seldom do! They usually don't have a clue what they are doing? As far as "futures" go...they are a best guess...usually based on what happened yesterday...and made by "experts"?

[grassfarmer]

Yeah, Randy we are getting there slowly. Getting into keeping bulls till two year olds is hard though - we have more customers than bulls and they keep taking them younger than that. We are producing some embryos at this moment that will save me a few years genetically in the race to where we are going. Give me 3 or 4 years and I'll be good to go with a bull and female sale! I still like Purecountry's idea of a joint "hardy" or "efficient" F1 and purebred female sale bulls. You boys provide the blacks and I'll do the reds.

This thread was about selling commodity cattle though and that will remain the way most producers market their cattle for the forseable future so we have got to try and make it as profitable as we can within the constraints of the current rigged marketplace.