Marketing Feeder Cattle
How can I market feeder cattle through the CHB program?
Today cattlemen have more marketing options available to them than ever before. The key to marketing success is knowing which marketing option works best for you and your cattle and the willingness to do the research. Regardless of whether you market your cattle on a grid or on a cash basis, people in all segments of the industry are making it clear that if you want market price or to add value to your cattle, you must know how they perform in the feed yard and produce desirable carcasses. Once you have data on your cattle there may be genetic improvements that need to be addressed.
There are a few important factors when it comes to estimating the value of feeder cattle:
- Quality: cattle must have stretch, muscle and bone,
- Uniformity: cattle are like in kind, weight, size and same sex,
- Flesh: cattle must appear light to moderately fleshed,
- Weigh-up: cattle with less fill (feed and water) in them at the time they are sold are worth more to the buyer,
- Health: cattle with a documented health program are beneficial, those that are weaned and vaccinated with modified live shots ect.,
- Past-performance: history of shrink, health, feed yard performance, carcass merit and how fast they start on feed at the feedlot.
There are a number of options for marketing your feeder cattle in today’s industry. Some are very simple and some are complex.
- Producer Co-mingled Auction Sales
- Special CHB Feeder Calf Sales
- Producer “pooling” Ranch Direct Sales
- Ranch Direct Sales
- Partnership Sales
- Retained Ownership
Producer Co-mingled Auction Sales
These sales are often held at auction facilities where cattle are sorted or scanned into like kinds, like colors and like weights and are being sold in load lots. This is a way for smaller producers, to take advantage of added value that is often gained with selling load lots. This concept works great for both the seller and the buyer. There are some state organizations that have recently had numerous successful sales.
Special CHB Feeder Calf Sales
These sales are coordinated through state programs, national and state breed associations or through sale barns. These programs tend to have varying degrees of participation to help fit as many producers needs and capabilities as possible. The most progressive of these programs requires cattle to be castrated, dehorned, vaccinated, bunk broke and pre-weaned 45 days. It’s these that often have the most success for the buyer and seller. Some of these sales are offering information back to the producer. In order to receive this, your cattle must have visual or electronic identification.
Producer “pooling” Ranch Direct Sales
This practice is becoming more common by smaller producers who do not have enough cattle to make a truckload. Producers with cattle of similar type, weight, sex and health programs can make like loads of feeder cattle. This is a good value for the seller and the buyer, especially if the cattle fit similar management and genetic types.
Ranch Direct Sales
This type of transaction is used mostly on a minimum of one load (50,000 lbs) of cattle of the same sex and the same weight from one ranch. This marketing method works well for producers that have enough numbers that can supply even and uniform loads. The price is established off the cash market, the seller pays no freight and no commissions. The seller will have to pay for the health paper and brand inspections. Many CHB buyers like this method for the sake of the health of the cattle. It is very low stress and if you deal with the feeder that is buying your cattle there is a good opportunity that there will be information flow back to you.
This type of transaction is becoming more prevalent with the producer owning 25%-50% of the cattle until harvested. The negotiated price is just like a Ranch Direct Sale, with the seller splitting the cost based on the percent of retained ownership. The seller has more control in the marketing of the fed cattle and may receive the performance and carcass information back. Partnership sales eliminate all commissions and middlemen. It also gives the seller a repeatable market every year depending if the buyer was satisfied with the cattle.
CHB has a large number of feeders that are willing to work with you on getting started in a retained ownership program. This type of agreement can be the best deal for all of your marketing needs subject to the risk of the market, weather, health, genetics, and management of the cattle. Retained ownership can provide you with the individual documentation that will allow you to improve your economical management practices. To experience retained ownership with just 5 steers or more, producers can participate in the American Hereford Association’s Genetic Outreach Program.
Today cattlemen have more marketing options available to them. Selling their cattle out of habit or because they are out of feed, or out of money, is often a big mistake. We at Certified Hereford Beef urge producers to become savvier marketers. Look for different avenues and different angles by which to sell your cattle and your value as a supplier. Learning your strengths and weaknesses and producing for common goals is vital. Consumers are our end point. Everything you do affects them positively or negatively. Consumers are fragile and their perception is market reality. They not only want a product that is consistent, convenient, priced competitive, and tastes great every time, but the satisfaction of knowing the producer is actively involved in assuring the safety, quality and integrity of their food. Cattlemen are great stewards of the land and great producers of our beef products. Beef is safe for our family and it is produced with American pride. Let’s work together and develop a better marketing edge for your program.