Lights, camera, auction! Many producers would agree they are more comfortable with their daily ranch duties than they are in marketing their product. While traditional auction barn sales will always have their place in the cattle business, video auctions may be the ticket to boasting cattle on a broader screen.
Online video auctions combine modern-day technology with benefits of improved cattle safety, buyer accessibility and added security. While this route is not for everyone, it has the potential to be a profitable alternative to the traditional sale barn route.
“Livestock auction barns will never be replaced, and many sell cattle in person and over video,” says Dr. Andrew Griffith, associate professor and extension economist for the agricultural and resource economics department at the University of Tennessee. “Keep in mind it is possible for both to coexist, and that allows producers to reap maximum benefits.”
Exploring a new marketing method can be overwhelming, especially when it comes to dealing with technology. Griffith breaks down the video auction process into four simple steps:
- Contact a video sale auction marketing agency and express interest in additional information.
- Schedule a time for a representative to video the cattle, set expectations for the condition of animals on delivery day and discuss delivery details.
- Consign the cattle for a sale date.
- The buyer will take on-farm delivery or at a load-out location. The seller will receive the payment through the marketing agency.
Although the process sounds simple enough, Griffith reminds producers there are advantages and disadvantages to every marketing method producers should consider.
Pros
- Reaching buyers nationwide
Increasing accessibility through the utilization of technology can broaden the scope of potential buyers.
“If you increase your number of buyers by 10 percent, 20 percent or 50 percent through a different platform, it’s going to bring more competition and likely better prices for those cattle,” Griffith says. “When you go to the auction barn, you’re mainly dependent on your relationship with those local order buyers and feedyards.”
- Keeping cattle fresh until delivery time
Sale barn auctions require the producer to load and haul their cattle. With video auctions, the cattle do not leave until they are delivered to the buyer. This can prevent the exchange of disease from other cattle at the auction barn, transportation stress, injury and shrink.
- Reduced costs for the producer
According to Griffith, the marketing agency for video auctions typically has lower fees. A large number of cattle can be marketed and sold in a shorter period of time, and the agency does not have to pay for housing, feed and water because the animals stay on-site. Transportation costs are also reduced, as the producer can avoid making several trips to the sale barn if selling numerous loads of cattle.
Cons
- Buyers cannot evaluate the cattle in person
“At an auction barn, you can physically see the cattle, look for any defects and know exactly what they weigh,” Griffith says. “In a video auction, you’re dependent on someone else’s description of those cattle.”
- Sale prices are likely to change between consignment and sale day
With video auctions, cattle are usually consigned two weeks before sale day, and unpredictable market fluctuation means producers could receive lower prices.
- Difficult to make a uniform truckload
Marketing feeder cattle via video is most adventitious if the producer can fill a truckload with animals of similar sex, weight, frame and muscling, but this can be a challenge to achieve.
Representation and reputation
“A big challenge is just making sure your cattle are accurately represented in their description,” Griffith says.
Building a reliable reputation as a producer is a critical component to success when using video auctions, since buyers do not get to see the cattle in person before they make a purchase. One way producers can ensure their cattle are correctly represented is to research and select a video auction agency that will help them throughout the marketing and selling process.
Dennis Metzger, a representative for Superior Livestock Auction, has been videoing cattle for 20 years and has a few tips for producers who are interested in using the video auction platform.
“Many of us are very good at the production part of the business, from keeping the cattle healthy to managing grass and water quality,” Metzger says, “but marketing seems to be the one area we don’t put as much effort into.”
Metzger strongly advises new customers to be proactive in planning. Proper preparation to sell via video auction often begins before the cattle are even born. Decisions such as sale contracts, special certifications for the cattle and unique marketing avenues should be made far in advance of sale day to maximize return and develop a dependable reputation with buyers.
A producer’s thoughts
Hart Ranch, a cow-calf operation in northern California that has been in production for 169 years, transitioned to video auctions about 11 years ago. Alex Hart, the sixth-generation operator, says the decision to change their marketing has impacted their operation in a multitude of ways.
“We’re located just outside of the Oregon border, so we’re in a region that faces increased shipping costs and challenges,” Hart says. “To become more competitive, we felt the video marketing options offered superior competition and an increased buyer pool.”
Shipping cattle to the sale yard poses the risk of exposing them to diseases from other cattle raised under different protocols. Additionally, stress from loading and hauling can greatly impact weight, feed intake and overall well-being.
“The largest impact is the increased control we have over cattle health and security,” Hart says. “We can make sure our cattle are in their best health when they get on the truck, giving them their best chance to go straight to the feedbunk when they arrive.”
Hart says they also have more flexibility with shipping dates, as opposed to the traditional sale barn where producers have to meet a set schedule. Having the control to select a day when cattle will bring higher prices gives producers more financial stability.
For those interested in using video auctions, Hart suggests attending a bigger sale event and networking with other producers.
“They can help you network and find a cattle representative that you feel will best understand your current operation, where you want your operation to go and how to best accomplish your goals,” Hart says. “Be prepared to take a leap of faith, to develop a team and work with that team to improve your product, marketability and competitiveness.”
