Download Profitable Cattle Marketing

Profitable Cattle Marketing
Options and Alternatives
Modified by Georgia Agricultural
Education Curriculum Office
June, 2002
Georgia Feeder Cattle Market
• 70 % of Southeastern calves are sold
during the Fall.
• Based on Seasonal Index Average (100),
February is 106, July is 97, October is 96.
• Plan for the Market.
What Kind Should I Raise?
Raise the kind the buyers want!
• 1/2
English & 1/2 Continental
• Uniformity (color, size, weight)
• Medium Frame
• Number 1 Muscle
Discounts
Factors
Small Frame
Large Frame
No. 2 Muscle
Breed
Discounts/CWT
$10.00
$ 2.00
$11.00
$ 2.00-13.00
Marketing Methods
•Public Livestock Auction
Market
•Graded and Pooled Sales
•Tele - Auction
•Video - Auction
•Private Treaty
Auction Market
Disadvantages
•
•
•
•
•
•
•
Seller has little control of prices
Encourages multi-handling spec trading
Overhead cost is high
Excessive stress and shrink may occur
Lack of volume and uniformity
Cannot ID stock & producers after sale
Hard to establish reputation for good
cattle
Auction Market
Disadvantages
•
•
•
•
Grade & price info hard to interpret
Prices are uncertain
Disease spread is more likely
Number of buyers may be small,
reducing competitiveness of bidding
Auction Market
Advantages
•
•
•
•
•
•
•
Provides competitive bidding
Convenient
Open to all sellers and buyers
Prompt cash payment
All types of livestock can be sold
Prices are determined and known to all
Supervised by the federal government
Auction Market
Advantages
• Requires no market knowledge
• Requires no minimum number of
cattle
Graded and Pooled
Sales
ADVANTAGES
• Can put large lots together
• Costs savings passed along to
sellers
• Large numbers attract buyer
competition
Graded and Pooled Sales
Disadvantages
• Grading, weighing, sorting, penning,
time consuming and expensive
• Individual producers lose their identity
• Facilities not designed for efficient
processing for this system
• Hard to get producers to agree on terms
Tele-Auction
Advantages
• Potentially increases competition
• Less transportation reduces stress,
shrink, and death loss
• Reduces buyer cost
• Reduces marketing cost
Tele-Auction
Disadvantages
• Requires prior producer commitment
• Reduces marketing flexibility
• Requires partial or full truckload lots
Video-Auction
Advantages
• Largest number of potential buyers
• Reduced buyer cost passed along to
seller
• Direct buyer-to-seller transportation
• Delivery schedules very flexible
Video-Auction
Disadvantages
• Marketing cost is generally higher
than tele-auction
• Requires producer to have on-farm
truckload (or more) of uniform cattle
Private-Treaty
Advantages
• Seller controls the marketing process
• Costs less than other methods of
marketing
• Producer can establish a reputation
• Animals are farm fresh with no stress
• Disease spread is minimal
• Producer can condition animals to buyer
specifications
Private-Treaty
Disadvantages
• Requires excellent marketing
knowledge by seller
• No supervision by the federal
government
• Producer must assume risk of
payment collection
• May be little or no buyer competition
Keeping Up With The Markets
Price Reports by Phones
Federal State Market News
Thomasville, GA
Toll Free 1- 800 - 342 -1440
Georgia Farm Bureau
Toll Free 1- 800 - 456 - 1192
Keeping Up With The Markets
Published Price Reports
Georgia Livestock Market News
P. O. Box 86
Thomasville, GA 31799
Market Watch
University of Georgia Cooperative Extension Service
County Extension Office
Parting Thoughts
A marketing plan is another important tool to have in
your management toolbox!
It is dependent upon other good management
practices!
•Controlled breeding, predictable sires, right type and
kind.
It may require a cooperative agreement with
neighboring producers!
Incorporate it into your long range plans!
It will require some hard work!