Going once, going twice–Sold. For those who grew up attending sales at local auction barns, those words conjure up images of cowboys packed into theater-style seats anxiously watching as cattle were herded through the sale ring. The auctioneer’s song echoed over the loud speakers while experienced buyers signified their intentions with a nod, a wave or a shout.But as the number of auction barns declines, the way farmers market their cattle also is changing. Today, the picture of a cattle auction might be a buyer sitting at a computer screen viewing digital images of cattle hundreds of miles away; it could be a farmer watching his calves being sold on a satellite broadcast; or it could be a group of ranchers sitting in a meeting room while buyers phone in their bids from half way across the country.Dr. Walter Prevatt, an extension economist at Auburn University, said there are at least six ways to market cattle: through traditional stockyard auctions, by private treaty, at board sales, on the Internet, in satellite video sales and through retained ownership agreements.Board sales, Prevatt said, have been around for a long time, but in recent years have become organized gatherings involving 10-20 producers and hundreds of cattle. Traditionally, board sales have taken place at the stockyard. Auction barns set a special time to sell large, uniform groups of cattle, and buyers evaluate the calves prior to the sale. Once the auction begins, the lot number of each group of calves is posted on a board so the buyers know what they were bidding on.That concept led to some cattlemen forming associations and conducting their own board sales either in cooperation with an auction barn or independently. The oldest organized board sale in Alabama is the Producers Feeder Calf Sale, which held its 21st annual sale earlier this year at the Extension Office in Autaugaville. Ten producers from Autauga, Dallas and Chilton counties consigned more than 1,700 head of cattle in the sale. About 100 people crowded into the meeting room to watch the spirited bidding, which lasted 40 minutes. Buyers, who had viewed the cattle prior to the sale, manned a dozen phone lines while an auctioneer introduced each lot and made the call for bids. For the most part, the calves were sold in semi-truckload lots with O.W. Till Jr. receiving the highest price of $100.25 per hundredweight for a 60-head lot of 630-pound heifers. Buddy Carlee of Randolph had the highest selling lot of steer calves, which averaged more than $725 a head.Carlee said one of the advantages of board sales is the producer gets a consistent price.”Here, what one steer brings the whole lot brings,” Carlee said. “If you take them to the stockyard, the price might vary by as much as 10 cents (a pound).”Carlee said the sales commission also is generally lower than the stockyard, and, over a period of years, the producers earn a reputation among buyers. “If a buyer gets a group of cattle that work well for him, he is likely to come back the next year.”That’s certainly the case for Carlee. For 11 of the past 13 years, his steers have been purchased by the same buyers–Eldon and Doris Wiemken of Dixon, Ill.One of the reasons the Producers Feeder Calf Sale has such a good reputation among buyers is the strict herd health management program that all the members follow. By vaccinating their calves, the cattlemen help reduce potential problems when their cattle make it to the feedlot.That philosophy is the cornerstone of the Southeast Alabama Feeder Cattle Marketing Association (SAFE), which held its 7th annual sale this year in Dothan.The eleven farms that participated in this year’s sale all follow the ALA-VAC health program developed by Auburn University, and their cattle were all weaned at least 45 days prior to delivery.Max Bozeman Jr., who serves as chairman of SAFE, said the ALA-VAC program has paid dividends for the consignors.”It takes more time and labor to get the calves ready, but we are getting well paid for what we do,” he said.Dr. Prevatt said long-term averages indicate that producers who sell their calves in board sales could make $40-$50 more per head. The added value comes from a combination of factors including premium prices for load lots and a good herd health, less shrinkage, lower transportation costs and a lower sales commission.Shrinkage, Prevatt explained, is the weight a calf loses between the farm and the auction barn scales. Normally, that figure is about 5-6 percent. Board sales generally figure in a “pencil shrink” of about 2-3 percent.As for the commission, that varies among sales. Producers in the SAFE sale, pay a 2 percent commission, compared to 4 percent at the stockyard.John Moseley Jr., who runs Moseley Livestock Yards in Blakely, Ga., is the marketing consultant for the SAFE sale. As an auction market operator, he is able to charge a lower commission at board sales because his expenses are reduced.”We are just trying to find new ways to help producers market their cattle,” Moseley said. “Board sales are not for everyone because some smaller producers don’t have the time to do this type of intensive management. But for those that do, we hope to get them a premium price.”
Slade Rhodes of Parkman Cattle Co. in Montgomery buys cattle at board sales, stockyards and from individual producers. He said board sales are mostly geared to producers who can put together a 50,000-pound load of light cattle.For producers who don’t have that many brood cows, Rhodes suggests working with an order buyer who has a good reputation. He will have established customers who trust his judgment, Rhodes added, and he will be able to group your cattle with similar calves from other farms.That’s exactly what David Buzzerd of Superior Livestock Auctions has been doing with a group of farmers in Mississippi–only he’s been auctioning their cattle via satellite.
Each year, eight producers, who all use the same bulls and vaccines, group their cattle together to make five truckloads. The five lots are then auctioned in one of Superior’s satellite video sales.Prior to the sale, Buzzerd videotapes the cattle, and Superior sends out 6,000 sale catalogs. On the day of the sale, buyers and sellers tune into a pre-determined satellite frequency where the videotape is played, and bids are taken in real time. Sellers communicate with the auction house by phone and can immediately decide whether to accept or decline the highest bid. If they accept, arrangements are made for the buyer to pick up the cattle at the farm–just like in a board sale.”I believe the auction is the best way to sell cattle, no matter how it’s done,” Buzzerd said. The satellite video auction is good because it exposes the cattle to a lot more buyers.”Buzzerd said cattle sold in the satellite auctions usually bring about 5 cents more a pound than they would at the stockyard. And if the producer has a good reputation, that premium could be 8-10 cents.I.D. McClurkin of Montgomery has been selling his cattle through Superior’s satellite sales for seven years. “I like it because you have more buyers,” McClurkin said. “After the first couple of times, the buyers get to know your cattle, and you seem to get a better price.”Like the SAFE board sale, producers who sell their cattle through Superior follow a vaccination program and wean their calves at least 45 days prior to delivery.But satellite sales aren’t the only high-tech way to sell cattle. Internet auctions also are growing in popularity. These sales work much like satellite auctions, but instead of video taping the cattle, digital photos are taken and posted to the web along with a thorough description of each lot.Superior holds an Internet auction every other week. Other Internet cattle sites include www.cattleinfonet.com, www.producersvideoauction.com, www.cattlesale.com and www.CowZone.com. Some conduct live Internet auctions while others provide a classified listing service. But whether the sale is conducted by phone, satellite or Internet, most of the cattlemen agree that the key is putting together truckload lots of uniform cattle. Prevatt said there are six keys to a good board sale:• Cooperative participants — “It’s got to be a team effort.”• Quality cattle — “You’ve got to have good quality cattle when you put board sales together or it’s not going to be any different than any other auction. Quality cattle will draw buyers and help producers get a premium price.”• Quantity — “We like to see at least 700-800 head in a sale.”• Weight — “It’s important that you sell 600-800-pound animals that are well suited to go directly to the feedlot.”• Health — “The cattle have got to be healthy and have the proper kind of vaccinations. And, they need to know how to eat and drink out of a trough.”• Work with local stockyard — “They bring a lot of marketing knowledge to the sale as well as buyers. They can do it at a lower commission rate because they aren’t hiring the additional labor needed at the stockyard.”John McDaniel, who was one of the founding members of the SAFE sale, said it has been a learning experience for him.”It’s been educational. We’ve met the buyers and found out what they want, and sometimes we’ve been able to track the cattle all the way through the feedlot to see how they perform,” McDaniel said. “We just basically learned that buyers all want healthy, fast-growing cattle that will grade (choice). It’s probably the most successful thing I’ve been a part of in the cattle business in this area of the state.”