Last weekend, I took my family to a backyard BBQ. I told my wife on the way there that there was going to be three kinds of people there, cattle buyers, sellers who despise cattle buyers, and sellers who attach themselves to the hip of a cattle buyer and talk directly into his ear.
I get why some sellers despise buyers. After all it was the buyers who wanted one sorted off and that one brought less money. For most people it is just about that one that took the discount. I am not sure if they even realize what happened with the rest of the group.
Sellers vs. Buyers
I’ll give an example. A couple weeks back the auction I was at was trying to sell a nice set of 4 weight steers. I noticed one had something wrong with its leg. I asked to hold it. The auctioneer ignored me and got someone else to start the whole group. I finally stopped the auctioneer and told him he had to hold the one since it was bleeding out. The ring man moved the cattle and sure enough everyone could then see the puddle of blood. The auctioneer then agreed to hold that one and I ran that group nine higher. I didn’t get them bought, but I sure helped the seller. If the auctioneer would not have agreed to hold the one, I would not have bid.
The one with the injury sold for fifteen dollars less, a discount of $70 by the head. Since the injury happened at the barn, the barn paid to have the vet fix it, if the guy that bought the group, he would take it for $15 off.
I really upset that seller because in his eyes I cost him $70 on that one. The fact that I made him an extra $900 on the others is lost on him.
I saw something similar a few years ago. We had bad weather here during calving and there were a lot of cattle that year that had froze off ears. One buyer was holding all short eared cattle. He’s buying them on order and only doing what his customer wants. The stockyard was holding the short-eared cattle at this buyer’s request, which meant sorting them off in the ring. This was ok for me because I was the guy buying the discounted shorted eared cattle.
Finally, one day the auctioneer bowed up to that buyer and told him there would be no more sorting. That buyer got up and left. That was even better for me because I was getting some really nice cattle bought under the money. Three weeks later the stockyard called the buyer and convinced him to come back and they would sort off, what he needed sorted off. This guy was making the market. Sellers were making more money with him there sorting than they were without him being there.
Knowing what works
Most buyers, (most doesn’t mean all) are not trying to screw anyone over. We know what works for our deal, and what doesn’t. We will pay for what works, and we won’t pay for what doesn’t. We are trying to make money just like everyone else. We are good at what we do, and if one needs to be discounted and they don’t hold it we will bid less on the entire group and if you average it out the seller will net the same, as he would if one was held and the rest brought more.
Ear tags tell a story
I’ll share one more thing from a buyer’s perspective. I hear people say that they have to calve in the winter so the calves are “big enough” to sell in the fall. I’ve seen 40-pound twins sell so I have no clue what “big enough” means. Here’s what I can tell you. Some cow calf operations put birth dates in the ear tags. Every fall when I put groups together (and I’m grouping them by size) I will have calves with January birthdates and May birthdates in the same group. I would say the guy with the May calves did a better job getting them to market, simply because he produced the same pounds (big enough) and he didn’t have to fight winter weather during calving, or after calving. And he should have a cheaper carrying cost taking his cow through the winter.
As a buyer I don’t care when you calve. I am just happy to have something to bid on. I am just sharing a thought that my save some labor and make people some money.
I haven’t talked about cows for a while and this week I got to take in a cow sale. The sale took place in an area that had some rain and what I saw surprised me. There was no demand for females of any age.
A 600-pound feeder heifer in that area is bringing $950 by the head. A high yielding cow is bringing $1050 by the head. Bred females of any age weighing 1200-1600 pounds brought right around $1050 by the head. Pairs brought a few hundred dollars more and that was a direct reflection of the value of the calf at side. The cow bell curve was flat at this auction.
Feeder auctions were much the same as last week. Some sales had $20 slides on cattle under 600-pounds and others $7 slides. This greatly affects Value of Gain from one sale to another. To be clear the sales with the wide slides are the sales where fly weight cattle are being bid up. On feeders over 600-pounds it is easy to see what buyers are zeroing in on. VOG saw a bump on seven weights and nine weight steers.
I didn’t see enough unweaned cattle or feeder bulls to make a comparison this week. I did see some NHTC cattle sell this week that brought commodity price. Remember value added only means value added if you capture the added value.
Note: You can get personal insight from Doug Ferguson at Husker Harvest Days, September 14-16 in Grand Island, Neb. Mr. Cattlemaster will be speaking each day at 11 a.m. in the livestock demonstration area on the northwest side of the show lot. It's your chance to meet him and get insights on his sell/buy approach in person. Make plans to attend.