Pooling calves to make more profits at market
September 5, 2008
Marketing calves is a challenge sometimes, especially if a producer has a small herd. Order buyers are mainly interested in full semi-loads and it’s harder to sell a smaller number of calves. It’s also hard to get a fair price for small groups of calves at an auction yard. When cattle go through one or two at a time, you never get the best market price.
“The buyers always steal those, putting them 10 cents back off the going price, and sometimes more than that,” says Ron Skinner, DVM, veterinarian and purebred breeder near Hall, MT. Skinner has bought and sold many calves over the past 40 years and has also been an order buyer.
Group marketing is often the best way to overcome this problem.
“If a rancher can get together with other producers and put together a uniform group to merchandize privately, rather than take them to an auction, there’s more chance to get full market value for those calves,” he says.
If you can put together a large enough group to attract an order buyer, the price can be negotiated ahead of time, rather than having to take your chances on what you might get at an auction yard.
“We have a group of ranchers at Arlee, Montana, where we’ve been shipping their calves for 20 years and doing very well,” explains Skinner.
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Those ranchers have been buying his Angus and Salers bulls for many years and the herd genetics are very similar. Even though there are six different owners, with calf crops ranging from 150 head down to 10 or 15 animals, the calves all look the same. All the ranchers have to do is weigh them and sort by size to make uniform groups.
“We send five or six semi-loads out of there, and this makes a big enough deal to attract buyers,” Skinner says. “This is the only way I know for the small producer to get what his cattle are worth. If he goes to a sale ring and only has 10 calves, and they sort those into two or three lots, he won’t get what they are worth, and it’s not fair. If he can join up with someone else’s program and market the calves together, it’s better for everyone.”
Order buyers are most interested in large groups. Peak marketing time is in the fall when cattle are coming off ranges and pastures, being weaned and sent to feedlots. A few groups are weaned and sold early, but the bulk of the calves being marketed are shipped from early October through early December.
“The order buyer is going like a madman for a few weeks and then it’s over,” says Skinner.
The buyer’s yearly income is all dependent upon that peak marketing period and he has to move 20,000 to 30,000 head in that short time.
“Most of the order buyer’s income happens in just two or three weeks, and he doesn’t have time to go to a small stockyard somewhere and have a bunch of small producers bring in 10 or 12 calves apiece,” says Skinner. This type of situation takes all day because the farmers and ranchers bring those calves to the stockyard in the back of a pickup or in a two-horse trailer and it’s a congested mess.
“They’re all standing around in the way, or chatting in the scale house, and here comes the truckers, and the calves aren’t all sorted and weighed yet,” says Skinner. “I make my truckers stay in town until I call them. I don’t want them waiting around, standing in the way, talking to the people who are supposed to be helping me.”
These small groups can be hard to sell because they are such a hassle that the order buyers won’t bid on them. The buyers just don’t have time to deal with this.
“So if small operators can get some kind of marketing group arranged ahead of time, so a person can move five or six loads on a certain day, then it’s a good day and worth the buyer’s time – and you’ll get market value for those calves,” he says.
Small breeders often feel at a huge disadvantage and feel they are being beat up on prices just because they are small. But they need to understand the logistics of selling these cattle. It’s merely a matter of economics for the buyers. Thus in order to get the top prices for calves, it usually pays to put together uniform groups to sell together.