Video Auctions a Win/Win for Buyer, Seller

By LaRayne Meyer

Head ‘em up! Move ‘em out! At one time it took weeks to drive cattle from Texas and Montana ranches to railroad towns where they were shipped east. But it’s been a few years since trail drives routinely moved cattle from range to market. In more recent times, stockyards and sale barns provide marketing sites where ranchers with calves to sell connect with feeders looking for cattle to fill their feedlots.

Today, those two factions can be connected by a superhighway of a more recent type – video marketing. Cattle don’t have to make an appearance in a show ring to be sold through video marketing; however, the result is the same – ranchers sell, feeders buy.

Cattle are photographed at the ranch and shown on a screen at the auction site any number of miles away. Auctions typically aren’t held in dirt floor show rings but at auditoriums or hotel conference rooms. The auctioneer takes bids from those on hand and from cattle buyers who call in over the phone. As the sale progresses, buyers’ laptops may be connected to other sales going on simultaneously.

Jerry Griffith, a cattle feeder and buyer from Wisner, is familiar with both marketing styles. Griffith is especially tuned to cattle markets since he resides in Cuming County, which is well known for its beef production. The county ranks in the top five in the nation for income – a direct result of cattle production. Griffith, who started feeding in the mid 1980s, has steadily increased the number of cattle he buys yearly. Today, he feeds 2,000-3,000 head annually. Griffith has spent the last two decades traveling across the country as a cattle buyer for Cuming County feedlots as well as his own feeding partnerships in Nebraska and Kansas. In the past half dozen years, however, Griffith has parked his pickup truck a little closer to home, choosing instead to purchase a large percentage of his cattle from the comfort of his home office.

“There’s no expense, just a telephone and a TV,” he explains.

Griffith subscribes to three main video marketing services that send out sale catalogs packed with statistics including base weight, breed type, frame size, estimated sale weight, amount of slide, vaccination updates and whether the animals are home-raised or bought. Also included is the total number of head available and the dates and times of each sale.

“You can call and ask when a particular lot will sell,” Griffith says. “They can tell you approximately when. There’s always a good buy if a cattle buyer wants to sit and watch the video stream all day. You just have to pick up the phone if you want to bid. As long as the phones are ringing the auctioneer keeps crying.”

However, sometimes the buyer can be dialing in when a lot sells, although video marketing companies have dozens of people answering the phone lines. For that reason, Griffith chooses to go to live sales sometimes instead of watching via television or computer. “It’s easier to bid,” he says. “I just put my hand up.”

A number of auction barns have also been utilizing video marketing as another way of doing business, according to Ryan Creamer, an owner of Creighton Livestock Market in Creighton, located on the invisible line that divides the state into western ranchers and eastern feeders. “They can use the auction method to establish prices just like forward contracting for beans or corn,” Creamer says.

As a representative for one of the video marketing companies, Creighton Livestock Market not only films and consigns cattle, but is also with the rancher on sale day and when their cattle are loaded out. Customers bid at the auction barn on those pens of cattle that Creighton Livestock Market has consigned.

Typically, ranchers sell cattle in lots of 300-1,000 head, either backgrounding them, bringing them off grass or wheat or shipping them out of a growing or conditioning yard where they’ve had silage or hay. Wherever the cattle are from, Griffith believes the secret to success for buyers at a video auction is to know something about the company representative serving as a liaison between rancher and feeder. “If I know the rep, I’ll know if he’ll do me a good job,” he says.

Another factor in working with video marketing is to have knowledge of the region of the country from which the cattle originate. “That tells you the quality you’re going to get,” Griffith believes. “You have to know your breakevens. You have to know your cattle, where they’re coming from and how they’re going to perform.”

Griffith is not afraid to buy cattle that need to be shipped a distance, outbidding smaller feeders who typically like to stay closer to home, fearing shipping fever or weight loss complicated by shipping longer distances. “I don’t mind paying shipping. If I pay too much, I’ll deal with it. When they’re fat, they’re worth the same.”

Having said that, Griffith is careful to buy cattle that are acclimated to Nebraska’s cold winters. Cattle born in warmer states may be too thin skinned or fine framed and don’t develop a heavy enough hair coat. Bad winters will add $5-$10 per hundredweight more in feed costs than a mild winter, cutting into profits, Griffith says, unless cattle are purchased low enough to offset the higher costs.

Video technology provides a number of advantages to cattle producers who live long distances from markets or feeding areas, and to the feeders as well. Because cattle are kept on the farm or pasture until the sale, sellers can select delivery times. With cattle filmed in their natural surroundings, they appear fresh and calm, unlike stressed calves crowded into show rings. Marketing costs are reduced and farmers or ranchers experience some price protection with calves still on the home lot. Cattle weight is listed in the catalogs as an estimate. Prices are adjusted accordingly at delivery time. Finally, the buyer exposure is vast, with video sales held all across the United States.

Griffith enjoys the people he meets across the country, with black cattle as their connecting rod. “I put it all together and sit and watch the Ouija® board,” he says with a confident grin that belies the fickle nature of the cattle market. “I watch the Board of Trade.”  Y  By LaRayne Meyer, Pilger, a freelance writer who has published in many agricultural and Nebraska publications.

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