Written by Amanda Erichsen, OFN ContributorWith a rare moment of high corn and cattle prices, producers need to take advantage of all opportunities to make sure they get the most profit out of their sales.
A few experts in the livestock production and marketing arena from Oklahoma and Missouri offered the following about selling your cattle at a sale barn or feedlot.
According to Derrell Peel, extension livestock marketing specialist at Oklahoma State University, advantages of using cattle auctions is convenience and ease for producers.
Andy Stubblefield, owner and operator of the Lebanon Livestock Sale Barn, suggested that selling your cattle at a sale barn is advantageous because there is a set price at the current market value, and bidding is done to get the best price for the seller and buyer.
“Also, there are more buyers in front of your cattle, instead of just one at a feedlot,” Stubblefield added.
Peel suggested that producers do their homework to make sure that the auction will provide a good market for the specific set of animals being sold.
“For example, many auctions have lots of buyers looking for lightweight feeders but may not have buyers for heavy feeders,” Peel said.
“Call them and have a field representative come out and estimate a price for the calves,” Stubblefield said. “Don’t just drop them off – tell them about the calves, their weaning and medical history.”
According to Peel, the principal advantages of selling to a feedlot are reduction in transaction costs, no commission fees and potentially less shrink and handling and shipping of cattle. A feedlot sale can also result in a higher net price for the producer.
“Typically direct selling is going to work better when the producer can offer truck load lots of uniform animals,” Peel said.
Producers need to solicit bids from several buyers. With today’s tight cattle numbers, there is likely to be considerable interest on the part of feedlots to buy cattle directly, he added.
It is essential that producers understand the details of the trade in addition to selling price, Peel recommended.
“Don’t assume that the details are not negotiable,” Peel said. “In today’s situation with limited feeder cattle supplies, producers likely have more leverage in negotiating deals than they might in times of plentiful cattle inventories. Finally, insist on a substantial percentage or full payment before animals are out of your control.”
“There is not a one-size-fits-all best way to market cattle for a single producer not to mention all producers,” Peel said.
The bottomline is that this year’s specific choice comes down to the producer’s considerations of convenience, ability to negotiate, network of contacts available, availability of loading and weighing facilities.
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