t is never too soon to begin weighing your marketing options,” said Scott Brown, research assistant professor for the Department of Agricultural and Applied Economics at the University of Missouri.
According to Rob Campbell, livestock producer from Witts Springs, Ark., there is more to marketing cattle than planning. There must be communication with the seller before unloading or getting ready to put your cattle on the market.
“People will follow all of the proper marketing strategies in planning, however often times they don’t tell the seller or auctioneer at the sale barn in time to add value to their sales,” Campbell said.
Planning
Brown advised that there is no single answer to a marketing plan. It should be different for every producer.
Five factors every marketing plan should consider:
1. Risks the producer can handle
2. Available forage
3. Information known regarding performance of the herd including feed efficiency, death loss and cattle quality
4. Relative feeder cattle prices at alternative weights and finished cattle prices
5. Futures market prices
There are many things to consider that will be common to most producers in planning for the future. Brown provided the following examples that producers may consider:
• Are you hoping to expand your operation if finances and weather cooperate?
• Are you seeking to take advantage of available technology to improve the genetics/quality of your herd, whether to maximize premiums or reduce your calving window?
• Or are you comfortable with your current production practices/quality grades?
According to Brown, producers must remain focused on their herd. “Producing high-quality calves that grow efficiently is the number one step they must take,” he said. “Demand for these types of calves will always be high.”
If a producer is participating in a program such as the Missouri’s Show-Me-Select, there are certain guidelines they will have to follow regarding vaccinations, production methods, and etc.
Weather also plays a significant role in the number of cattle you will take to market. Regarding the drought and its effect on the amount of feed you have for the year, Campbell said you simply have to pencil out what you have to feed between now and the time you go to market.
“Timing is everything when getting ready to market cattle,” Campbell said.
Campbell recommended that producers do everything feasible to have a uniform weight for sales, more so than color. Color is second to uniformity when it comes to sales.
Marketing
“People will make a living off of others mistakes, by purchasing mismatched calves and matching the calves up,” Campbell said. So the more you can do in advance to make a uniform sale, the better chance you have to get more money from the right buyer.
Calves are marketing by the semi-trailer full or pot load. “Producers can add value to their sale if they work with other producers and the sale barn to take a uniform load to market,” Campbell said.
Producers must remember they can’t control markets, and prices will adjust over time. “Retaining flexibility in the plan will be important to make adjustments when relative cattle prices adjust,” Brown said.
“The outlook is beginning to brighten, and those in the cow/calf industry not affected by drought are in the best position of any to reap the rewards of a strengthening economy and projected cheaper feed,” Brown said. “Plan today to ensure that your operation will not miss out on the good times ahead, regardless of what particular goals you have set for your enterprise.”
