Want to see what the livestock market is doing on sale day in Philip, SD; Joplin, MO; or Beatrice, NE? Nowadays you can, simply by logging on to the Internet.
New Internet technology is making online broadcasts from the auction ring possible. As a result, producers, feeders and order buyers can view and bid on cattle in the sale ring almost simultaneously on the Internet — from any location.
Jerry Roseth, owner of the Philip (SD) Livestock Auction, began offering Internet broadcasts of his weekly cattle sales in mid-January.
“You always want to have as many bidders and buyers available,” Roseth says. “We got involved with this Internet service because this is an opportunity to expand the exposure of our sale offering.”
Roseth has teamed with Lincoln, NE-based DVAuction, a company that offers real-time video streaming and actual online bidding. DVAuction's Internet software allows cattle buyers to view video and listen to audio with a delay of one second or less. This real-time transmission allows Internet bidding to take place as the cattle are in the sale ring.
Roseth says it was that real-time capability that appealed to him. Other livestock auctions around the country are also turning to the technology to expand their base of potential buyers.
Joplin Regional Stockyards went online with DVAuction this spring. Like Roseth, Steve Owens, co-owner of the Joplin facility, sees this online service as a tool to get more exposure and more buyers for the nearly 400,000 head of cattle they sell annually.
“As a marketer, our job is to sell cattle at the highest market price possible. And the more buyers involved in the competitive bidding process, the more opportunity there is to do that,” Owens says.
The auction markets at Beatrice and McCook, NE, and Guymon, OK, currently offer real-time broadcasts through DVAuction as well, says Craig Blunck, president of the company. And, more than a half dozen additional barns — including Billings (MT) Livestock — are looking to sign on with DVAuction in the next few months, he reports.
With alliances, video/satellite marketing and closed-bid Internet sites offering stiff competition to auction barns for marketing calves, many speculate this new technology could be a key to survival for the next generation of auction barns.
Blunck points out that the continued success of feeder cattle auctions via satellite transmission shows the willingness of feeder cattle buyers to purchase livestock online. “In our case, buyers will be purchasing cattle for immediate sale and delivery just as if they were attending an auction in person,” he says.
“We came into business because a lot of folks were putting up Internet sites to sell cattle that were closed-bid style,” says John Shepard, DVAuction's vice president of information systems. “That was taking market share from auction barns. We believe these online video broadcasts allow livestock auctions to stay in the game and expand for the future,” he says.
Simple And Convenient
Gary Jessen of Jessen Feedlots at Bloomfield, NE, and Marvin Koehler, an order buyer from Osmond, NE, bought cattle through DVAuction's site. Both are pleased with the system's ease and the cattle they purchased.
“You can walk in the office, turn on the computer and buy cattle. It's that simple,” Jessen says. He's bought nearly 1,500 head through the online sales.
“You can see the cattle very well on the Internet. And if anything, I think the cattle are actually greener once they arrive than they appear on screen,” he adds.
Neither Jessen nor Koehler had bought anything over the Internet prior to using DVAuction. Now it's a regular part of their cattle buying routine.
“I wouldn't have had the opportunity to buy a lot of these cattle just because I wouldn't have had time to get to the sale,” says Jessen, who watches at least one online sale per week. “I'm looking forward to DVAuction getting a lot more barns from around the country on the Internet. This will increase the availability of cattle to suit my needs.”
Koehler agrees. “This system is convenient, and it broadens the area we can buy cattle from. In the future, I think it's going to be part of everyone's business.”
Lots Of Window Shoppers
For now, Jessen and Koehler are in the minority. At Philip, Roseth reports there's been a lot of interest from online lookers, but it took a month of offering the broadcasts before his barn had its first actual sale of cattle over the Internet.
“Right now, we have a lot of buyers looking and investigating,” Shepard says of the video broadcasts. “Because it's new, people are cautious.”
However, interest continues to mount, and Roseth is enthusiastic: “It's going to take some time for people to get used to buying cattle this way. But already we've had some new buyers pre-register, so we know we're getting additional exposure.”
Roseth realizes that for some buyers there's no replacement for seeing the cattle in person. But he does see a niche: “We have a lot of feeders who buy the same calves every year because they know and like the history of them. Those are the people this will appeal to.
“As the younger generation of order buyers comes in, I see this method of buying gaining popularity because they are comfortable with the Internet and e-commerce,” Roseth adds.
He also anticipates those feeders who don't have time to travel or who want to reduce travel expenses purchasing more cattle online. He sees future opportunities to offer video broadcasts of bull and horse sales as well.
And, even if producers or order buyers don't want to buy cattle this way, online broadcasts are still beneficial for the price discovery information they provide, according to all those involved.
Kindra Gordon is a freelance writer based in Spearfish, SD.
How Online Telecasts Work
At the auction barn, a video camera displays the cattle entering the ring. A second camera records the head count and weights from the weight board. This live video and the audio of the auctioneer are then broadcast simultaneously on the Internet through a high-speed or wireless Internet line.
During this process, a computer operator at the barn can type additional messages, like breed and health history on the calves, to the online buyers as the cattle are in the ring.
To view a specific sale online, it's recommended that buyers have access to a wireless or high-speed Internet connection. Before bidding, they're required to register at the DVAuction Web site (www.dvauctionline.com) and receive pre-approval from the auction barn. Registration provides buyers with a username and password that gives them access to a bidding console. The computer operator at the sale can then accept bids from the registered online buyers.
While the mechanics of the system might sound complex, those who have bid and bought online say the process is relatively simple for buyers.
Technology's Price Tag
While online buying offers a broader audience to sellers and convenience to buyers, it comes with a price.
Hardware and software costs for auction markets installing the DVAuction system are about $30,000 — including broadcasting equipment, computers, software, installation, training and an equipment warranty.
For online buyers, DVAuction charges $1.50/head to purchase cattle from any of the participating livestock auction markets. (There's no cost to the auction market.) The buying fee is added to the total purchase price of the cattle. The buyer submits payment to the livestock auction market, and it reimburses DVAuction for the fees.
Another Online Option
In addition to DVAuction, Livestock R Us is another Internet start-up company working with auction barns to offer video viewing of livestock sales. The Mobridge, SD-based business was initiated in August 2001 by Jesse Hubner and Eric Ulmer.
Livestock R Us differs from DVAuction in that it has about a 20-second delay in the video picture, and it does not currently allow for actual online bidding. But Hubner says it still serves the same purpose of allowing potential buyers and sellers the opportunity to see what is being offered at the sale and then phone in to place a bid with an order buyer.
They say utilizing an on-site buyer to do the actual bidding means less for bidders in the quality and kind of cattle they purchase. Their system is also less expensive for the sale barn to install and maintain, they add.
Herreid, Fort Pierre, Mobridge, Gettysburg and McLaughlin are South Dakota auction barns that have teamed up with the Livestock R Us service. The livestock auction at Manchester, IA, also utilizes the service, and additional barns in the region are in the process of adding the service, too, the company reports. Viewers just simply log on to www.livestockrus.com to view a sale.
Fort Pierre's Dennis Hanson was the first livestock auction to sign up with Livestock R Us and has been pleased with the response to the video broadcast.
“It gives producers and buyers an idea of what's going on at the sale and what's happening with the market,” he says.
Although buyers can't bid online, Hanson says it offers the opportunity for interested buyers to phone in to an order buyer with bids.
“This is more of a tool to let people know what's happening at the market. I believe the vast majority of buyers still want to be there,” Hanson says.
Hubner and Ulmer agree. “The purchase of tens of thousands of dollars of cattle over a computer screen is something we feel will never become a substitute for being there. That is why we feel our simple yet effective format covers all the bases,” they say.
In addition to their video broadcasts, Livestock R Us offers services for producers to list everything from seedstock to bison, horses and livestock equipment on their site. They also have the ability to upload sale catalogs and supplement sheets to the Web.
Hubner describes it as a one-stop shopping site where “livestock people can find everything they need.”