Sale barns are here to stay
September 12, 2008
With today’s technological breakthroughs wowing generations every day, the livestock industry has come into the new century with options never before available. From the time beef cattle were introduced to this part of the country, people have always depended on local auctions to market their product. The old days of trailing cattle for miles to rail heads and auction barns such as Belle Fourche, Omaha, Chicago or Abilene paved the way for creating the competitive market that exists today.
While some skeptics say the progress in communication and new marketing techniques will usher in the demise of the American sale barn, there are plenty out there who disagree.
“I have to say that I’ve noticed a lot of people going to the video sales and looking at options other than what a sale barn has to offer,” said 1983 World Champion Livestock Auctioneer Bud Knight of Powell, WY. “However, being a sale barn man myself since ’73, I would hope to see them continue on – and I believe they will.”
Knight managed several barns throughout his career and sold at auctions throughout the Tri-State area – beginning after auctioneer school at the since closed barns in Rapid City and Edgemont (SD). He went on to work in many capacities including auctioneer, field man and manager at several other barns including Sturgis Livestock, Belle Fourche Livestock Exchange, Billings Livestock and later in Worland, WY as a part owner of that barn.
“Sale barns are a necessary thing,” Knight continued. “There will always be a need for them and always a loyal crowd of regular customers who bring their calves to town every year and have no intention of changing that. Order buyers and customers on that end will also continue to need the services provided by local markets. There is also the need to market the lower end of cattle and smaller lots selling as singles and two’s, etc. It’s been a crucial part of marketing for 100 years and I believe it will continue to be that way for another hundred.”
One predominant issue that may hinder how far a producer is able to go with his cattle is obviously the price of fuel. Freight is sure to play a major role in how ranchers decide to market their cattle this year. Increasing numbers of cattle, especially yearlings off of grass and feeder cattle in the fall, are being bought and sold in the country or by private treaty. While it takes a lot of work to properly market cattle this way, it has its benefits among which would be the savings when it comes to freight because as a general rule, the buyer pays for the freight.
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When producer’s sell at live auction, the price is settled on the auction block and the sale is final. Of that sale, freight is subtracted and the proverbial “check is cut” which can be a huge relief just knowing that everything is final and the gambling is over – for that year, at least.
While the same principle applies with video auctions or contract sales, the exception is the fact that the buyer generally pays the freight. Either way, the producer will pay for that cost, but for many it’s another hurdle they won’t have to leap in an already stressful time. There are also more complicated aspects to consider when selling cattle in an alternative market. Often feeder cattle are contracted months in advance while still on the cow with a base weight quote. For instance, a truck load of steers could be contracted to average 600 pounds to take delivery on Oct. 10th. If they miss the weight, a price slide applies which can greatly hinder the outcome on either the buyer or producer’s end of the deal, depending on whether the cattle are under or over the contracted weight and whether the slide works both ways.
If the contract states there will be a $.10 slide for overweight cattle, the seller will take that loss. Shrink also plays a part in the transaction in both live auction marketing and video or private treaty. When cattle are sold off the ranch, the shrink is figured on a percentage basis in the price upfront and can be seen on paper when the final numbers are tallied.
Producers need to be aware of what their cattle weigh and many have purchased portable scales or have had scales installed on their property so as to keep a close eye on things, thus thwarting a surprise when it comes time to sell out of the country.
Technology brought about what some say are more efficient means of marketing cattle when video and internet sales entered the arena. Video auctions are quickly gaining popularity and offer a wide range of benefits to the producer as well as the buyer.
“It’s all about management,” said Myron Williams of Wall, SD. “You need to know what your cattle are going to weigh and make sure things don’t happen.”
Williams has been a cattle and sheep buyer for many years as well as a cattle feeder. He was also named the 2008 Stockman of the Year at the Black Hills Stock Show.
“Marketing cattle isn’t easy,” Williams added. “Whether it’s in the country or at the sale barn there are all kinds of things that come into play such as bad futures, corn prices, weather, and worldwide demand. Things can change a lot in 30 or 60 days. All grain markets and fuel prices have a direct effect on the producer and how things will play out.
“It would be hard to see sale barns exist just as a butcher cow market,” Williams continued. “I’ve made a part-time living as an order buyer for many years and it’s hard to believe the changes I’ve seen in my lifetime. We can’t be afraid of change, though.”
Williams is well known to be a forward thinker and says he does not believe video auctions will be the end of the local auction barn.
“I think if anything ends up really hurting the sale barns it will be the I.D. programs, Environmental laws or animal rights activists,” he says.
Dean and Eileen Strong have owned and operated Belle Fourche Livestock Exchange for over 31 years now. During that time, both have seen a lot of changes. Today, thanks to technology and advances in communication, Strong is not only a sale barn owner but a representative for Western Video Market, a competitive video sales cooperative that serves ranchers in 13 western states and cattle buyers from coast to coast.
“It used to be just the sale barns,” Strong said. “For so many years that has been the exclusive marketing tool. In this part of the country everything moves in the Fall which can cause a problem. For the most part there is a three week period from around the middle of October to the first part of November (depending on the weather) when feeder cattle are really moving. That can lead to a lot of congestion at sale barns and make availability of trucks a real issue.”
While many ranchers have their own trucks these days, marketing part of a herd through video sales will often help with that congestion because the buyer can then line up his/her own trucks rather than taking from the pool of local truckers who are already booked.
“It’s not for everyone,” Strong continued about selling cattle on the video auction. “But it sure works well for some. A lot of these guys will sell a load or two on the video but they still have the rest and they need to go somewhere with them. It all boils down to the producer. They will decide whether or not the sale barns will continue.”
Long time respected cattle buyer, Wayne Anderson of the Rapid City area, shared similar sentiments concerning the American sale barn as we know it.
“Video sales are here to stay,” Anderson said. “It encourages larger parts of the business to branch out and be able to buy and sell without the expense involved. It’s not encouraging for the smaller producers, however, and the slaughter end of the business is getting more technical as well.”
Anderson says he has been in the business as an order buyer for 54 years and does not plan to continue at this point.
“I can’t see how they’re paying so much for cattle right now,” he continued. “It’s just not a risk worth taking.”
Anderson went on to say that there might be a hole in the number of fats coming up and the high price of feed will play a part in what happens in the future.
Ted Thompson of Whitewood, SD represents Superior Livestock as well as long time respected Thompson Livestock, along with his father, Tommy, and family. Thompson was quick to say there will always be a home for sale barns but that the trade and big deals such as sales of over 1,000 head of cattle from one ranch is becoming a thing of the past.
“Video marketing is an option but not the demise of the sale barn,” says Thompson. “The big producers have the option now to market their calf crop in April, May or June, trade at home and know that the delivery will be on a certain date in November or whenever they choose. It’s a chance to take advantage of the market and plan ahead.”
Many producers who choose to sell from home whether it be private treaty or via video auction will not sell their entire calf crop.
“A lot of times a producer will not sell 100 percent of the calf crop via contract and just sell the steers or the heifers from a ranch,” Thompson added. “It’s all up the producer and we all want the best for our industry no matter what venue they decide to use to market their cattle. We still need the sale barns but they are consolidating and maybe won’t be located in every small town like they used to be. I think I can speak for a lot of cattle buyers when I say I depend on the sale barns for part of my living.”
Sale barns hold a special place in the hearts of people in rural America. One would be hard pressed to find a grown man or woman who was raised on a ranch who cannot remember spending the day at the local livestock barn. Reminiscent of Leroy Vandyke’s “Auctioneer Song,” many a young kid spent an afternoon listening to the chants of an auctioneer and maybe getting a treat of home made pie from the sale barn cafe.
More than a marketing tool, sale barns represent a history steeped in hard work and hard-nosed deals. They stand for the pain and triumph Agricultural families have endured together through good times and bad – a sentimental slice of Americana in many ways. In this day and age of cell phones, email, internet and what seems to be the loss of one on one communication thanks to “automated services,” the sale barn has changed very little from what it was in the beginning. Folks come to town to market their livestock, maybe do some shopping and visit with people they might only see a few times a year. Small town economies rely on them for these reasons. On a good year or bad, families may sell their cattle, sheep, or hogs and have a rare treat of eating supper at a local restaurant. The kids might get a new pair of shoes. The hard-working wife might get a new outfit (or pair of five buckle over shoes). The husband might afford that upgrade on the feed wagon he’s been eyeing (and needing) for years.
No matter what people say, sale barns are emotional places. People have cried upon receipt of the check for their stock during terrible economic times and rejoiced together during a good market year. While some barns might be dwindling down or sitting empty and seemingly lifeless, the ghosts of a thousand sale days seem to echo through the halls, the sale ring and auction block as well as throughout the massive yards from the load out chutes to check-in gates.
Producers and buyers alike continue to need and utilize the services provided by local markets. Despite continued mandates, complicated laws and fuel prices as well as heavy competition from other means of marketing, it looks like sale barns will always have a place when it comes to the sale and purchase of livestock.