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October 17, 2011

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Soap, great looking calves. And what could be better than a good year and working at home with your family.
Sparky sure is a creative and artistic man.
I hope ya'll have a great winter.
 
BRG said:
Big Swede said:
If I was a cattle buyer the main reason I would want to buy direct is that I am thinking the cattle will cost me more if I wait. It doesn't always work that way as some times during the fall runs the price gets weaker. Also not exposing the cattle to the sale ring would cut down on some stress and exposure to other catlle. Do you ever buy direct BRG or do you always buy your cattle through the ring.

We do both, whatever our customer wants to do. But I do think it is usually better to go through an auction of some sort for a couple reasons. 1. If a buyer gets them bought at X amount, he usually has a little left on the table. Not always, but usually. 2. Soap already has the reputation to get top $, but for the guys who don't, selling privately doesn't build a reputation like an auction will. Reputation is very important when selling your calves.

Having always dealt with country order buyers, I can tell you that
those calves get a reputation too. So many come back wanting the
same calves year after year. Plus, as a seller, you
have an opportunity to say yes or no and have
a little time to think about it. You can talk to more than one
order buyer and find out what someone else thinks
your cattle are worth before you have the cost of transportation
in them. Shrink or weighing conditions are a big deal too.

I think Soap did a fine job. It was an 'insurance policy' at the time
he sold in the country. I guess I would call it another form of dervisification. He's fortunate that he's got enough cattle to sell both ways. Order buyer AND auction.
 
Sorry for this long dissertation, but here's my opinion:

Back around 1985, we sent our yearlings to the sale barn for the first time. Prior to that we always sold privately to farmer feeders who became repeat buyers and close friends. It was a satisfying way to do business. Eventually order buyers took over as it was more feasible for the farmers to hire the job done. It was always more rewarding doing business with the farmer but as times changed we saw fewer of them and more order buyers looking for cattle.

The order buyers changed our perspective. They are typically tougher to deal with and know the market trends much better than we do. The price settled upon was always based on what the average sale barn market was, less a customary value for sales expense (including trucking) at the barn. It is peculiar to me that "sales expense" is always deducted from the price in the country, while the buyer pays for it in town. After a number of years of dealing with the sharks, we decided to try our luck at the barn.

We were astonished at what we received there, trucking and shrink combined. It started a long relationship that I have continued on to this day. Some sale barns are better than others, so it is important to choose a good one.

I am uncomfortable pricing my cattle at home. At the barn, they bring what the market will bear on any given day. The market is always either up or down on a daily basis, but this "price discovery" is a fair way to determine the price.

There are ways to minimize shrink at the barn, but I think many folks are overly sensitive to it. It is an important factor, but in competitive bidding, cattle showing shrink are bid higher and those with excessive fill are bid in for less. Therefore, I think the shrink issue is over rated.

I don't see much comparison as far as building a "reputation" between selling at home versus sending them to the sale barn. A reputation can be built at home, but only the buyer and eventual feeder ever see the cattle. If you have top quality cattle, the rewards of having them seen publicly and fought over is immeasurable. The reverse might be true for those of poorer quality.

More importantly in my view is how the cattle are sorted. Anytime uniform load lots of cattle are offered, they will bring top dollar. Several loads of top quality, uniformly sorted cattle that buyers are wanting will bring much more in town than at home with one shrewd order buyer bargaining for them.

On final thought pertains to the payment. We never had trouble with any "rubber checks" when selling privately but it is an issue to consider. Dealing with a reputable sale barn removes the risk factor out of the equation. One bad check from some one you don't know could be a very unprofitable adventure!
 
I tend toagree with JF ranch, the times have changed in the past 25 years. Ranchers today can't do things the way Dad did.

That said, it still boils down to a satistfied buyer and a satistfied seller. The day is past when a farmer-feeder who want a hundred or so feeders will come to your place and look for cattle. time is to expensive. Sometimes the order buyer has a better eye for cattle, no matter who you are. He has eyeballed more cattle. When I looked at my neighbors cattle, I always saw the best and biggest ones, when I looked at my own I always saw the smaller and poorer ones.

Lots of people believe when you sell direct you collect the middlemans profits, but maybe you are just not collecting the benifits for his services.
The same goes for the sale barn, they provide a service in helping to establish a price, a place to bring similur cattle together to market and to sort cattle into more attractive packages. I always thought that my cattle after being sorted and put into the ring looked better then they did at home. I never had enough cattle that I could sort at home.
 

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