Advances in technology offer new avenues to market cattle. Here's a guide to what's available in satellite and videomarketing.
Time to market your cattle? Maybe you should just stay home... with the cattle. Whether by satellite or on the Internet, remote cattle sales are surging. It likely won't replace the auction yard, but remote selling can be a great marketing tool that gives buyers and sellers more options.
Unlike conventional marketing methods, remote cattle sales give buyers and sellers national exposure. Buyers can view cattle and bid at several locations without leaving the office. Meanwhile, buying fresh, country cattle means less death loss, labor, medicine and healthier, better doing cattle.
Sellers often have their cattle exposed to 30 or 40 active bidders, and they usually realize a lower cost/head to consign their cattle. Rather than being at the mercy of the day's price, remote selling also offers sellers an option to no-sale cattle in a depressed market. Shrink is less of a problem, too.
Currently, five major companies offer various forms of remote cattle sale opportunities, and other companies aren't far behind. All have representatives who describe the cattle in the field and either photograph or videotape offerings.
Buyers and sellers must register, and sellers pay either a consignment fee or up to 2% of gross sales. Representatives assist in bringing buyers and sellers together and follow up with traders to ensure the sale contract is followed.
While video satellite auctions have been around about 15 years and still dominate the remote selling world, satellite costs continue to escalate as companies are forced to compete with the networks and cable stations for time. Satellite auctions also require expensive production equipment and a printed catalog.
By comparison, an Internet auction can be put together on short notice with an inexpensive online catalog. The savings are passed on to customers, who can expect to pay less/head to market their cattle on the Internet than through a satellite auction and will usually pay less than running their cattle through a traditional sale barn auction.
One limitation to Internet auctions is that real-time video isn't yet available. On the Internet, video appears as if it's being played in slow motion and isn't as clear as a photograph.
Real-time bidding is possible on the Internet, but only one company is currently offering regularly scheduled, active-bid auctions on line. Most other companies market cattle on the Internet with bid-ask auctions and say they will offer real-time Internet auctions within the next couple of years when real-time video technology is available.
Suzanne Wright is an agricultural freelance writer based in Grass Range, MT.
CattleinfoNet Interactive MarketPlace, formerly CyberStockyard, is an online brokerage and auction service that reportedly moves 200,000 head of cattle/month. The service is a product of eMerge Interactive, a publicly held company that has brought together beef industry professionals and information system technology to develop profit-enhancing solutions for the cattle market.
"We call it value chain integration," says Scott Sanders, vice president of cattle sales for eMerge. "We want to lower cost and increase the value of the marketing system."
Sanders created CyberStockyard in 1997, sold the company to eMerge Interactive in 1998, and went to work for eMerge in 1999.
The company's goal is to integrate the whole cattle industry, says Sanders. To do that, Interactive MarketPlace provides interactive management tools to more than 150 feedyards across the West via high-speed Internet connections.
Since most cattle are sold through auction yards, the company's vision is a network of company-owned facilities, where cattle are tagged with electronic ID tags, are on a specified health program and are sorted into load lots - all to drive a better price.
"We're not just an Internet company," says Sanders, "we're all about creating a better product."
The company offers two different options to buyers and sellers. Feeder cattle and stockers are brokered, either by traditional means or on the Internet, and cattle are sold on Internet auctions. Brokering is available all the time, and Sanders says the company plans to hold biweekly Internet auctions this fall.
"The Internet is enhancing the current system, not replacing it," he says. "We're here to make the producer and feeder more efficient and to make them more money."
Headquarters: Sebastian, FL
Number of years: 3
Services: brokering, Internet auctions, interactive management services, news, market and weather reports
Type of cattle: mostly feeder and stocker cattle, some breeding stock
Description: number of head, sex, average weight, weight variability, implanted (yes or no), vaccinated (yes or no), preconditioned (yes or no), source, originating state, flesh, slide, frame score, delivery dates, type of feed, quality breakdown, color breakdown, Brahman breakdown, weighing conditions, representative, comments
Cost to the seller: Internet auction - 2% of gross; brokering - $8/head
Area represented: nationwide
Web site: www.cattleinfonet.com
E-mail: info@emergeinteractive. com
Phone: 877/578-BEEF (2333)
Cattlesale.com, which offers cattle for sale Monday through Friday on its Web site, is more of a bid-ask format than a true auction. Just two years ago, Cattlesale.com was a part-time venture for Oregon feedlot operator John Freeman. But in 1998, Freeman moved the company to Boise, ID, to take advantage of the high-tech services there.
The bid-ask format on the site's Country Page allows buyers access to feeder cattle, breeding stock and dairy cattle five days a week from 9 a.m. to 2 p.m. The company has moved more than 80,000 head this way since August 1999, nearly doubling its volume every quarter.
"We have held auctions, but our Country Page is more popular," says Michelle Packard, director of marketing. "We will hold auctions more often if requested by the sellers."
Buyers can keep their bid active for as many as five days, but all bids are purged on Fridays. The cattle can stay listed until a buyer meets the asking price, or the seller accepts a buyer's bid. At any time, a buyer can withdraw an unaccepted bid; and at any time, a seller can pull the listing without penalty or paying a consignment fee.
Cattlesale.com sends its representatives to the sellers with digital cameras and description forms. "The cattle can be consigned, posted and up for sale on our Web site the same day," says Packard.
Besides listing the cattle, Packard says representatives also actively contact buyers and sellers and follow through on transactions.
Headquarters: Boise, ID
Number of years: 2
Services: continuous Internet bid-ask auctions, news and market information Type of cattle: mostly feeder and stocker cattle, some breeding stock, some dairy
Description: number of head, sex, average weight, weight variability, implant information, vaccination history, bangs, source, origin, breed, flesh, slide, frame, muscle, condition, delivery dates, type of feed, quality breakdown, color breakdown, weighing conditions, representative, comments
Cost to the seller: 1.5% for stocker and feeder cattle, 2% for breeding stock and 3% on dairy cattle; no consignment fee if seller withdraws offering
Area represented: West and Midwest
Web site: www.cattlesale.com
Superior Livestock Auction is the originator and industry giant of satellite video marketing. The company has offered video satellite sales since 1987 and markets 1.3 million head annually.
Superior's first satellite auctions were shown closed circuit in a meeting room. It now broadcasts auctions via satellite so buyers can view the auctions from anywhere there is satellite access.
Superior markets load lots of cattle using competitive bidding. Says business manager Paul Branch: "Time after time competitive bidding will bring more money for the seller than private treaty."
Until mid-July when Superior added its Internet component, the firm had conducted all sales as weekly video satellite sales. Initially, Internet sales will be conducted periodically to accommodate sellers needing a quick sale until real-time video is available.
Efficiency is the reason Superior prefers video satellite sales to the Internet. In a recent four-day satellite auction, Superior sold 140,000 head - 1,100 lots at a rate of 44 lots/hour.
In comparison, real-time Internet auctions are currently only able to process about 6-8 lots/hour. As soon as the Internet will support real-time video, Superior will hold Internet auctions simultaneously with its regular satellite auctions.
Headquarters: Brush, CO, and Fort Worth, TX
Number of years: 13
Services: weekly satellite video auctions, Internet video auctions, Value-Added Health vaccination program
Type of cattle: feeder and stocker cattle, some bred stock
Description: number of head, sex, base weight, weight variability, implant information, vaccination information, source, origin, current location, flesh, slide, frame score small, medium or large, delivery dates, type of feed, horns, weighing conditions, vaccination program, representative, comments
Cost to seller: $2/head non-refundable consignment fee, credited toward the 2% commission on gross sales when the cattle sell
Area represented: nationwide
Web site: www.superiorlivestock. com
E-mail: info@superiorlivestock. Com
California's Western Video Market, a confederation of auction yards, recently launched an Internet company, WVMcattle.com, that works in conjunction with its video sales.
Sellers can consign cattle on the Internet site for one week prior to regularly scheduled video auctions to give the cattle extra exposure. On the Internet, it's a bid-ask system. If the cattle don't sell in that first week, they roll into the upcoming satellite auction.
"Adding the Internet makes us full-service cattle marketers with all the mass marketing potential available," says Western Video's Kevin Devine. Last year, the company sold 350,000 head via video satellite sales. They expect to top that number this year.
Headquarters: Cottonwood, CA
Number of years: 11
Services: monthly video satellite auctions, Internet bid-ask auctions, news, market and weather reports, links, advertising
Type of cattle: mostly feeder and stocker cattle, some breeding stock
Description: number of head, sex, base weight, implants (yes or no), vaccinations, source, origin, current location, flesh, slide, frame, delivery dates, type of feed, weighing conditions, representative, comments
Cost to the seller: Satellite - about 2% of gross; Internet - 1% of gross
Area covered: 14 Western states
Web site: www.wvmcattle.com
Producers Video Auction (PVA) is the only company offering regularly scheduled real-time Internet cattle auctions. With $33 million in gross sales last year, the company is the only proven business model for real-time Internet livestock auctions. Sales have steadily increased, and the company sells between 5,000 and 10,000 head/month on the Internet.
The company uses real-time bidding technology, but doesn't use videos of the cattle. During the Internet auction, there's no sound except a bell to signal bid changes and last calls. The buyer, however, can view still photos and descriptions of upcoming lots, as well as the current lot. In the near future, bidders will likely hear the auctioneer's voice in real-time and will be able to view videos of the cattle.
PVA started with video satellite auctions, which it still provides, then transitioned to include Internet auctions. Originally owned by the Texas Livestock Marketing Association, PVA was bought in the mid-1990s by a group of the association's representatives.
Stockholder Pete Clemens is owner and operator of the Okeechobee Livestock Market, the largest auction market in the state of Florida. Stockholder and CEO John Cargile owns Producers Livestock Auction, the largest cattle market in Texas, and the largest sheep/goat market in the U.S.
"The professionalism and integrity of our people is extremely important," says Cargile. "Consigners turn their cattle over to us to sell, and people buying cattle are trusting us to deliver cattle as they've been represented."
In a virtual market, direct examination of the cattle and a reliable description are crucial, he adds.
Headquarters: Fort Worth, TX
Number of years: 6
Services: monthly satellite auctions, biweekly Internet auctions, market information, Value Added Calf (VAC) vaccination program
Type of cattle: mostly feeder and stocker cattle and calves
Description: number of head, sex, average weight, health program, source, origin, flesh condition, slide, frame size, delivery dates, feeding program, quality breakdown, Brahman blend, weighing conditions, representative, comments
Cost to the seller: Internet auctions - $8/head; satellite auctions - 2% of the gross.
Area represented: nationwide
Web site: www.producersvideo auction.com