Industry At A Glance: Auction Market Volume

Data collected over the past 15 years in the state of Kentucky suggest that producers increasingly are exercising new or alternative methods to sell/market their cattle – e.g., utilizing video or direct sales vs. auction markets. What does this portend for auction marketing in the years to come?

Nevil Speer

January 30, 2013

1 Min Read
Industry At A Glance: Auction Market Volume

Beef producers have been provided with a number of alternative marketing methods over the past decade or so. And it appears they’re increasingly taking advantage of those new venues. That reality is best demonstrated by the data below.

The illustration highlights auction market volume vs. beef cow inventory over the past 15 years in the state of Kentucky. Two important points:

• Market volume always exceeds potential calf crop in the state due to cattle from other states also being marketed through Kentucky’s auction markets.

• Both cow inventory (i.e., calf crop) and market volume have declined over time.

All that said, what’s most important is the rate of change. That is, market volume has declined much more rapidly compared to the decline in cow inventory. In fact, the difference between the two has plunged during the past six years; the two-year moving average is just over 40,000 head in 2012 vs. nearly 216,000 head in 2007 – a decline of over 80%.

kentucky auction market numbers

The bottom line is that it appears that producers in and around Kentucky are exercising new or alternative methods to sell/market their cattle – e.g., utilizing video or direct sales vs. auction markets. While auction market data isn’t available in most states, do you perceive these trends in Kentucky as representative of the broader industry? If so, how have new marketing venues influenced your business? What adjustments have you made over time regarding the way you market the calf crop? How do you see these trends progressing in the years to come?

Please leave your thoughts in the comments section below. 

About the Author

Nevil Speer

Nevil Speer serves as an industry consultant and is based in Bowling Green, KY.

Nevil Speer has extensive experience and involvement with the livestock and food industry including various service and consultation projects spanning such issues as market competition, business and economic implications of agroterrorism, animal identification, assessment of price risk and market volatility on the producer segment, and usage of antibiotics in animal agriculture.
 
Dr. Speer writes about many aspects regarding agriculture and the food industry with regular contribution to BEEF and Feedstuffs.  He’s also written several influential industry white papers dealing with issues such as changing business dynamics in the beef complex, producer decision-making, and country-of-origin labeling.
 
He serves as a member of the Board of Directors for the National Institute for Animal Agriculture.
 
Dr. Speer holds both a PhD in Animal Science and a Master’s degree in Business Administration.

Contact him at [email protected].

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