Turns out the consumer isn't the only buyer in the beef process

Doug Ferguson

August 13, 2021

4 Min Read
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What do you know about your customer? When I use the word customer what image comes to your mind? For many I’m sure it’s the end consumer. Millions of dollars have been spent convincing us we are beef producers and our focus should be on the consumer.

Beef is a little over 40% of the critter. We do not have beef until the hide is off. Unless you’re involved in that you are most likely a cattle producer. That means we must focus on 100% of the critter, and your customer buys 100% of the critter. A mercantile business exists to serve its customer, and unless we approach marketing that way we probably won’t do a good job of it.

The best way to appeal to your customer is to sell them what they want in a manner that they are comfortable with.

Until this week I never considered that a buyer had to be comfortable with the process. Mostly because I thought we all understood the process, but I was wrong about that.

At an auction this week a seller had what he felt were replacement quality heifers. He wanted the auctioneer to sell them by the head instead of by weight. When the auctioneer announced that you could feel the energy in the room change, and not in a good way. Instead of getting out their calculators some buyers just folded up their cards and decided to wait this one out. Selling cattle this way is not what they are accustomed to. If you want to head them off sell them on a production sale.

The other thing that seller did that buyers don’t like is interrupt the auctioneer. We got more information about those heifers than was needed. Know what information your customer wants and give that to them. If you go so far that we now have individual birth dates, then you’ve gone too far. If your cattle are under the money a good auctioneer will stop and talk them up. If you interrupt the bidding process yourself it is 99% effective in killing it, and all you’re gonna get is the bid at the point of your interruption.

A good auction will have momentum. This sale had good momentum right up until they sold this guy’s heifers. If you are a seller and the auction has good momentum do not disrupt it. You increase the probability of buyers leaving their seats with disruptions.

Selling pressure

This week in my local area we saw the back to school or property tax sell offs. What that means is some people go out and catch one to maybe seven head of calves, depending on how much money they need. They strip them off the cow and bring them to the sale barn. The first part of the week here was hot and humid. A lot of these cattle had an overnight stay at the barn and were over heated by sale time the next day. Not many buyers want to deal with this.

We all have a good idea what a certain weight of animal is bringing and that is why these sellers only bring in the number of calves they do. It should be enough to cover their bills. Problem is the auctioneer had to back up a long way to get these calves started. He’s got to back up far enough that buying them is less of a gamble. At the end of the day we are price takers. Putting these calves in front of buyers under those conditions the cattle did not show well, and the price taken was a reflection of that. I am sure some of these people will be bringing in more cattle next week because they didn’t get enough money this week.

When you sell at auction the sale barn is your agent. Use them and get information out of them. If you are not sure what your customer wants as your agent. Sale barn managers, and auctioneers are in communication with buyers multiple times a week. Most selling blunders are easily avoidable.

A look at the markets

Feeder heifer sales really captured my attention this week. For the most part there was a 25 to 30 dollar roll back on fly weights, but at some auctions there was only a 4 dollar roll back on the big heifers. This is sets heifers up for the best Value of Gain. As we look at the weight spectrum by 100# increments the best VOG is on cattle weighing under 600#. Above that weight VOG fluctuates from one auction to another. Some will have a VOG that easily covers the Cost of Gain while others do not.

Geographical spreads are in play right now. Paying a little trucking can make or save you some money right now.

Speaking of trucking, the shortage of drivers is real. Freight is paying pretty good right now, so some bull haulers pulled the pin on the punch hole trailer and are pulling refers right now. If you plan on shipping some cattle give dispatch some notice rather than waiting until the last minute.

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