Selling one’s annual calf crop is a relatively painless marketing process for commercial cattle producers. Purebred selling strategies however need to be substantially more complex, since individual customers seldom buy more than a small percentage of a farm’s annual cattle production, particularly bulls.
I don’t presume to instruct breeders in the art of selling, particularly those well-established ranchers who have a consistently effective client base established over generations or an individual lifetime. But I have considerable empathy for new breeders anxious to move forward and create their own niche in what can be a richly rewarding segment of the beef industry, and this is the direction of my thoughts in this article.
Anyone grandly assuming their obviously superior cattle will “sell themselves” is embarked on a business plan guaranteeing disappointment. The day a half ton skids to a screeching halt on the gravel and wheels into a rancher’s yard with its driver demanding the right to pay $5,000 for that bull calf he just saw in the field is a long way down the road.
Each farm and each herd is unique but there are a number of marketing basics common to all purebred enterprises that might benefit the budding seedstock supplier.
The most essential element, absolutely, has to be ambition. You really need to want to do this above all else. Everything beyond that can be learned, adjusted or adapted.
We have encouraged aspiring young ranchers to go with a breed they admire rather than one that might be seen as being generally popular. Yes, buyers need to be interested, but seedstock marketers need to be actively engaged in a sales presentation and come across as truthful, credible and trustworthy and genuinely believe in your product.
The single most effective sales pitch is enthusiasm rooted in conviction. Insincerity and lack of assurance are difficult to conceal and customers will withdraw immediately if these factors become evident.
Once the beginning breeder has stock to sell the question of a marketing venue becomes paramount. There are only two practical avenues available — public auction sales or private treaty.
Learning the auction process, first, is an indispensable step toward the ultimate goal of “off the farm” sales, or if things go exceptionally well and the owner is so inclined, home auctions. Good, bad or indifferent, the auction ring does supply marketing experience as well as provide product exposure and thus begins the long and often-difficult journey to name recognition and buyer acceptance.
If you are new to the public auction system, expectation that the sales management team will do all the promotional work and sell your bulls for big dollars without any heavy lifting from you is a false hope that should be dismissed as soon as it is born. Certainly the catalogues, advertising and hands-on activity will be handled by professional management, but to presume that your obligation to help sell your cattle has been discharged by payment of participation fees can result in serious disappointment.
Produce a good product
Your foremost responsibility is to give the auctioneering firm a quality product to sell. Don’t play it too close to the vest because you are afraid of risk. And for heaven’s sake don’t be seduced by the argument that if the sale goes well you can always bring better bulls next year. Bringing anything except your top end to a select sale is likely the kiss of death for your expectations and indeed your hopes.
Give sale management an animal that is quiet, clean, clipped, brushed, leads well on a new halter and is free of skin diseases, warts and parasites. When a bull enters the ring it should look healthy, well cared for (in our experience about a 3.5 condition score) and move easily in the ring.
Knock on doors
Every consignor should be out actively recruiting buyers. Potential customers should be canvassed and invited to attend. Classified ads as well as human interest press and radio articles all add to sale momentum. Exposure at local expositions is an invaluable source of contacts and future sales.
Having done all that is reasonably possible for your entries, the dicey part now is deciding what price might be acceptable to both buyer and seller, the so-called free market price. This is a reading taken from other comparable sales reflecting a host of conditions that influence market values.
Generally speaking bids given and taken are straightforward. But if there is only one active bidder the most common technique used to “run up” a buyer is likely to be variations of the phantom bid “from the rafters.” The ring men are given a figure below which a seller will not be content. It is then incumbent upon this ring man to hoist invisible bidders to use as a lever to advance bids from the legitimate buyer, a technique handled with admirable skill by experienced practitioners.
Recruit some help
A somewhat more sophisticated version is to have a “plant,” someone in cahoots with the consignor who is directed to openly support the bidding up to a previously agreed range but who clearly has no intention of buying for his own account or anyone else’s. This is simply known as “driving up the price.” Failure to draw a genuine bidder up to the desired amount results in the bull going back to the consignor as a “no sale.”
A “sight unseen” or “order buy” is a huge advantage to sellers. Since the sales management team has been entrusted with the selection of the animal there is considerable latitude for them as to which bull is finally chosen as the favoured beast, the sale likely having a number of bulls meeting that buyer’s specific criterion. In the meantime this back-pocket order can successfully be used as a legitimate advancing bid numbers of times without actually filling the original requisition. The fact that a buyer may not be present in no way detracts from the validity of his or her bid.
Weather tends to be the largest single influence on a livestock sale. To ask producers to commit inventory for open bids when travel is possible for only a few buyers would be neither fair nor just.
Even on a normal sale day there is risk of an unprotected animal selling for less at public auction than the asking price off the yard. This would be calamitous for future private sales and indeed for deals already consummated. Customers could argue that the “free market” established a lower price for your bulls than they had paid and that is what they are worth and no more. Why should a buyer pay a higher price off the farm if the seller was clearly prepared to sell the same product for less at public auction?
Then there is the matter of principle. Some breeders (ourselves included) refuse to sell a breeding bull at below the cost of production, a very real possibility in a poor auction.
For beginning purebred ranchers, public auctions are an essential first step in the business of becoming established as a seed stock producer. Auctions have both up and downside potential. The level of involvement by the consignor can be the fulcrum between the two.