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LMA want to sell all animals

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Big Muddy rancher

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June 19, 2001

America's livestock markets 'last hope' for price discovery, new LMA President Goggins says

OKLAHOMA CITY -- America's livestock markets "are the last hope (for) price discovery and profit for cow-calf operators," Patrick K. Goggins, the new president of Livestock Marketing Association, said here at LMA's recent annual meeting.

Describing the many forces aligned against the independent producer, he said, "We, as market operators, cannot let the livestock grower down. We must continue to create price. We must create value, and through advertising and sorting of cattle...we can and do add value to the product."

Goggins, a well-known purebred breeder, has owned and operated Public Auction Yards in Billings, Mont., since 1968. His many business enterprises also include the weekly newspapers, "Western Livestock Reporter," and "Agri-News." A long-time supporter of youth activities, he and his wife, Babe, have six children and 16 grandchildren.

In addition to Goggins, LMA's officer corps for 2001-2002 includes President-elect Billy Perrin, Ada, Okla.; Vice President Charles Messer, Asheville, N.C.; Treasurer Randy Patterson, Anthony, Kan.; and Secretary Steve Bartholomew, Fayetteville, Ark. Eight directors were also installed during the June 15 meeting.

Goggins, known as an outspoken advocate of competitive marketing, said three "cartels," of the major livestock feeders, packers and retailers, "want to eliminate auction markets across America. You know why? Very simple: we discover and create prices, and we are a thorn in the side of the pricing system. In other words," he said in remarks prepared for delivery, "we tend to make their raw product cost too much.

"But you and I represent the farmer and the rancher and the small independent growers of grass, food and fiber across America. It's our duty to get a fair price for their products. We know the only way you're going to get a string price, a consistent price, is through competitive bidding."

Goggins traced the history of the pork and poultry industries, from the days of independent producers to today, when price competition has virtually been eliminated. "And now the cattle industry is in the center of the bullseye and (packers) are working very hard at eliminating price discovery in cattle." If the marketing sector lets this happen, "we will surely lose our industry as we know it."

Goggins urged his fellow market operators to fight back by going back home "and talking about price discovery and what the auction method means to your community, your farmers, your ranchers and your local businesses...are you willing to defend your business and your livelihood?"

When you go back home, he told his audience, "Make sure you're committed to selling the auction way. Make sure you're committed to doing it better than you did last time, because if you do, the auction method will thrive forever."

LMA's newly-elected directors, serving three-year terms, are Max Olvera, Galt, Calif.; Jim Santomaso, Sterling, Colo.; Mike Tasler, Atkinson, Neb.; Bobby D. Smith, Fairview, Okla.; E.H. Fowler, Sedalia, Mo.; Jack Green, Roanoke, Ala.; and Ken Hurlburt, Farm Macleod, Alberta, Canada. Serving a one-year term as director at large is Bill Stockton, Albuquerque, N.M. Immediate past president John Willis, Lake City, Fla., becomes chairman of the board.

LMA represents the interests of independent livestock marketing businesses across North America.
 

cowzilla

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No argument there! The more bidders you have for your cattle the better chance you have in getting a good price :) However many a cattlemen have taken there cattle to a sale where there was a least 10 to 15 buyers around the ring but there was only 2 active bidders. And Guess What :roll: they seem to be taking turns buying the cattle. I sold 200 yearlings this year in a Video sale . Still had several buyers bidding but cattle where still in the yard. Not as stressfull as cattle going though ring but results where very good.
 

Denny

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My big problem is when the salebarn sorts your cattle into a dozen small lots sure you top the market on one set but donate a group or two also when the smoke clears you feel raped no thanks.I will skip the middle man arond here it figure's out you need 7 cents a pound more if you sell through the barn.My buyer this year took all the calves I had we had treated one for footrot on a saturday and shipped the following thursday. The foot was still swollen but he walked fine.I told him to sort him off he said he'll be fine weigh him.If I would have taken him to the salebarn that calf would have brought in th 70 cent range.
 

katrina

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Denny, Why do you let them sort them??? They are your cattle till they cross the scales.....You can sell them anyway you like. We've even went back and sorted them ourselves. Anything that is sorted, lame, frozen ears, ect. Let them bid on them and then stand up and no sale them. Once or twice of that and they get the idea that your there for buisness. Most sale barns don't like me because they can't push me around. The ones I sell to know they can't. I know that raped feeling but you have to be in the drivers seat and till they say SOLD....
 
A

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The true cost of selling in the sale barn is at least $25 per head.

Commission and Yardage - $10 - $12 per head
Unnecessary sorts for color- $5 per head
at least an additional 1% shrink - $5 per head min.
Extra trucking - $5 per head.


More stress on the calves from the salebarn environment and exposure to the "whistlers" and "whipping boys" costs the buyers in more sick calves when compared to selling off the place.

The only true "price discovery" is what the consumer is willing to pay for high quality beef. The rest is just a guess of what that value will be.

There is no question the Livestock Marketing Police would love to carve their commission dollars out of the sale of fat cattle too.


~SH~
 

katrina

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Unnecessary sorts for color- $5 per head
at least an additional 1% shrink - $5 per head min.
Extra trucking - $5 per head. SH says:
Helloooooooo!!!!
I don't know where you sell your calves. but they don't sort $5.00 per head. YOUR WRONG..
Anytime you haul cattle you will get shrink. That's the bottom line and it don't matter if it's to the salebarn or to the packers......That's just life.
Extra trucking?? for what???
Sh, When you load your calves or fats, do you have anything special you do to get them ready to be trucked?? :wink: :wink:
 
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That's right Katrina.

We sold in Herried for many years. When I put a pencil to how much the hit we took for unnecessary sorts on color and size was costing me, it cost me an average of $5 per head on the whole bunch due to the reduced price for the sorted animals. When we sold off the place we never sorted on color and the heaviest calves sold with the rest.

As far as shrink, when we sold off the place, we sold for a 2% pencil shrink and that's the same way I bought calves. When you sell in the sale barn, they will shrink 3% to 5% depending on how long they stand and how full they were when they were loaded. Put a pencil to it. 1% of a 600 pound calf is 6 pounds. At current calf prices, my $5 is low. $7 would be more accurate and that is just for an additional 1% of shrink which is virtually guaranteed above a 2% pencil shrink.

Extra trucking? When we sold off the place, we didn't pay for the trucking to the feedlot. When we sell at the auction barn, we paid for the trucking to the barn.

I'm right on this! I put a pencil to it many times.


~SH~
 

HAY MAKER

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~SH~ said:
That's right Katrina.

We sold in Herried for many years. When I put a pencil to how much the hit we took for unnecessary sorts on color and size was costing me, it cost me an average of $5 per head on the whole bunch due to the reduced price for the sorted animals. When we sold off the place we never sorted on color and the heaviest calves sold with the rest.

As far as shrink, when we sold off the place, we sold for a 2% pencil shrink and that's the same way I bought calves. When you sell in the sale barn, they will shrink 3% to 5% depending on how long they stand and how full they were when they were loaded. Put a pencil to it. 1% of a 600 pound calf is 6 pounds. At current calf prices, my $5 is low. $7 would be more accurate and that is just for an additional 1% of shrink which is virtually guaranteed above a 2% pencil shrink.

Extra trucking? When we sold off the place, we didn't pay for the trucking to the feedlot. When we sell at the auction barn, we paid for the trucking to the barn.

I'm right on this! I put a pencil to it many times.


~SH~

I think you just told me something about the quality of your cattle,just because you got docked for scrubs dont necessarily mean I do,get your cattle uniform and same colored,quit blaming every body else for your Inadequacies,thats the problem with you self proclaimed experts,# 1 you are half ass lazy #2 You need packers to tell you how to market your cattle #3 You need some one to blame ...............good luck
 

katrina

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SH,
How's things in your neighboor hood?
My guess the reason for less dollars for your colored cattle is quality. In my experiance, you or us can fatten less quality cattle better than the feeders and do well. And just common since tells me that they wouldn't bring as much as some fancy black even set of calves.
My guess that you, selling off the place, they are covering there butts by maybe not offering you as much for your high quality calves to take the colored cattle.
And if your buying. You don't want to buy the full calves anyway.. Right?? I would bid up green calves more so than fuller calves right??? Don't you get a better gain??? My experiance is that better quality calves do better, gain better, thus less time to feed and more dollars for us. Plus I would much better look at an even set of one colored cattle everyday than a whole bunch of colored catttle. That's just me....
 

ocm

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The sale barn is not the only auction format available.

And remember the auction outfit is working for YOU. You pay the bill. If he doesn't do a good job, fire him.
 

katrina

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There are lots of ways to market cattle and we have to do what works for us. That's what our troops are fighting for. We sold yearlings for years off the place and to me it was a hassle. Having buyers in and out bid offers and such, I thought it was a headache. But if SH wants to do it, good for him. I just choose right now to sell at the barn. And like Denny I have had that raped feeling, but I never went back to that perticular barn. The bottom line is: I want the same dollar for my cattle as any other seller with the same quality. Whether it be 20 head or 200. If you choose to sell at a salebarn, you have to find one that fits the type of cattle you have to offer. You don't want to sell at a barn that sells green cattle and you bring in bunk broke grain-fed cattle. It won't work. Because the buyers there are there for green calves. and vise versa. Enough said. Now I'll get off my soapbox and let you guys have the floor.
 

TimH

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~SH~ said:
That's right Katrina.

We sold in Herried for many years. When I put a pencil to how much the hit we took for unnecessary sorts on color and size was costing me, it cost me an average of $5 per head on the whole bunch due to the reduced price for the sorted animals. When we sold off the place we never sorted on color and the heaviest calves sold with the rest.

As far as shrink, when we sold off the place, we sold for a 2% pencil shrink and that's the same way I bought calves. When you sell in the sale barn, they will shrink 3% to 5% depending on how long they stand and how full they were when they were loaded. Put a pencil to it. 1% of a 600 pound calf is 6 pounds. At current calf prices, my $5 is low. $7 would be more accurate and that is just for an additional 1% of shrink which is virtually guaranteed above a 2% pencil shrink.

Extra trucking? When we sold off the place, we didn't pay for the trucking to the feedlot. When we sell at the auction barn, we paid for the trucking to the barn.

I'm right on this! I put a pencil to it many times.


~SH~

A few years ago, a friend of mine weighed some calves ,at home ,before he hauled them to the auction. These were 8 to 900 lb. black steers he had been backgrounding. Good ones!
He found that the shrink on them was between 8 and 11%, by the time they went through the ring!!
Some of it could be attributed to the difference in the scales, maybe some of of the calves that had the higher shrink had just drank a bunch of water before he weighed them, etc.
Bottom line is, they shrink more than you might think and that takes dollars out of your pocket. Any time a person can sell cattle with a 2 or 3% pencil shrink , it usually makes $en$e !! :)
 
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Katrina: "My guess the reason for less dollars for your colored cattle is quality. In my experiance, you or us can fatten less quality cattle better than the feeders and do well. And just common since tells me that they wouldn't bring as much as some fancy black even set of calves."

I know exactly what our cattle are capable of doing in the feedlot so no, quality was not an issue. Color was! Color has nothing to do with quality. Quality is defined by the cattle's ability to perform in the feedlot and the quality of the carcass they hang on the rail not the color of their hide.

Like I have said, we gained an additional $75 per head by retaining ownership over what we would have got in the sale barn. I never skimped on the price I paid for high quality bulls and I AI'd for many years so don't even venture to speculate on the quality of our calves. Our calves gained 3.4 pounds per day and converted 5.5 pounds of feed to a pound of gain. The local feelot told me that they had never fed more efficient calf feds. They then went on to grade over 70% choice. Color means absolutely nothing when you compare feedlot closeouts and carcass data.

We may have had a few loud colored calves in a group of predominantely black hided calves and they sold for far less than they were worth. One of the hazards of selling in a "PRICE TAKING" system of cattle marketing.

A friend and I put together a pen of smokies and off colored cattle one year and they were by far the most profitable cattle in the feedlot. This only convinced me further how this off color sorting is just one more way to "LEGITIMATELY" screw the producer in the sale barn. I wasn't about to trade hybrid vigor for hatchet assed razor backed purebred angus bulls just so they were all black.

A good friend of mine sold his cattle in Valentine. I bought and fed his calves one year until I couldn't affored them. They are red angus simmental cross calves and usually have a few loud colored calves. The main draft of steers weighed 713 in the first week of Oct. They averaged $132.50 and he has 98% fertility in his cows. Few herds will top that. My point? Color doesn't mean anything when the buyers know what the cattle are capable of. These usually sell to repeat buyers.


Katrina: "My guess that you, selling off the place, they are covering there butts by maybe not offering you as much for your high quality calves to take the colored cattle."

Your guess is wrong again. The off the farm buyer knows the genetic program he's buying into and wouldn't think of offending me by sorting for something as stupid as color. Once again, color has nothing to do with quality.


Katrina: "And if your buying. You don't want to buy the full calves anyway.. Right?? I would bid up green calves more so than fuller calves right??? Don't you get a better gain???"

I'm not buying full calves, I'm buying at a 2% pencil shrink. Sometimes green calves are bid higher but not enough higher to offset the additional 2% - 3% shrink that was lost.


Katrina: "Plus I would much better look at an even set of one colored cattle everyday than a whole bunch of colored catttle. That's just me...."

I'd rather look at an even set of mixed colored calves that I know were capable of gaining 3.4 pounds per day (pay weight to pay weight and adjusted to a 62.5% yeild) and converted 5.5 pounds of feed to a pound of gain and would grade over 70% choice with 70% Yield grade 1's and 2's but that's just me.......and my banker.



~SH~
 

katrina

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Good for you. My banker doesn't say one way or the other. :wink:
We do our own trucking, and after cleaning out the trailier countless times, there is a secret to having less shrink... But SH, I can tell you don't need to know because you know everything and do everything just right and make all kinds of money Hell your just plain ass perfect. So just why are you here? Most of us are here to learn. I would guess it would be a waste of time. Go ahead pat yourself on the back... You are full of it...I'm outa hear.....
 

Andy

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SH is right. The only thing salebarns do is eat into the profit of carcasses. I make way more money retaining ownership on the calves than if I were to sell them in the salebarn.
If I put all the time and money into breeding cattle for the salebarn that I have put into breeding them for quality on the rail I would have a very nice set of cattle that would top th market but I would be alot less profitable.
We buy all the calves that we feed out of the country. On most of those calve the rancher sets the price and we then agree on the terms.
We have one set of calves that we have bought for 16 years in a row and they are very good calves, but they calve in Feb. and they are Shorthorn, herford, Angus cross cattle. They are miss colored and there are short ears, but he gets the same price as the fancy blacks becouse of the quality. They would be back atleast 25-50$ if they sold through the barn.
 

Jason

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There is a huge difference in markets. I have sat and watched them sort at one market and wondered the "genius" out back that couldn't figure out there was a buyer sorting off 1 or 2 head in every batch of heifers.

When you see a buyer paying a premium for a certian set of cattle, sort to him. When allowed to pick off 1 or 2 they always bring less as other buyers are afraid to look stupid by buying the ones the first guy didn't want.

One seller one year a while back freaked at the 3% pencil shrink on calves at a private deal. They weighed the calves and he then took them across the road to stand overnight. The shrink was 13.5%!!!

Granted some buyers pay more per pound for shrunk out calves, but often it is nip and tuck if they pay enough extra.

I know when I buy I like a deal where I get calves settled as soon as possible after weaning. When they are weaned in the morning have bawled all night, sell late in the afternoon and then you have to haul them home and settle them in, they can really get set back.

On the other hand, calves weaned and then not fed properly are a disaster waiting to happen.

Basically each producer needs to do what works for them. Katrina standing up and passing her cattle out is what more need to do if the market doesn't know what they are doing, or the buyers start playing games.

Auctions have their place, sometimes it forces buyers to step up, but often private deals are based on the same numbers as auction cattle are and the extra costs of commission etc are split between buyer and seller.
 

HAY MAKER

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katrina said:
Good for you. My banker doesn't say one way or the other. :wink:
We do our own trucking, and after cleaning out the trailier countless times, there is a secret to having less shrink... But SH, I can tell you don't need to know because you know everything and do everything just right and make all kinds of money Hell your just plain ass perfect. So just why are you here? Most of us are here to learn. I would guess it would be a waste of time. Go ahead pat yourself on the back... You are full of it...I'm outa hear.....


OK Katrina,you have me interested,what's your secret to less shrink ?............good luck
 

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