The Cattleman July 2009 - RMG : Livestock Markets – Livestock Markets

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Rancher's Managment Guide: Livestock Markets – Valuable Partners for Cattle Producers
By ELLEN H. BRISENDINE

TSCRA's market inspectors inspect brands on 4 to 5 million head of cattle sold through livestock auction markets in Texas each year. According to The Cattleman magazine's annual subscriber survey, the majority of our readers will be responsible for bringing almost 1.5 million of those cattle to market in the coming months.

Bill Hughes, Groesbeck, immediate past president of the Livestock Marketing Association of Texas and owner of Groesbeck Auction and Livestock Co., briefly explains the service that livestock markets provide to their customers. He also offers suggestions on how producers can avoid problems on sale day.

"Our goal as a market operator is to work for that consignor," Hughes says. "When he or she places their cattle in our protective custody, so to speak, we are there to give them the best bottom line we can."

Hughes feels responsible for protecting the health of the cattle to be sold at his market. It is his job to make sure the livestock arrive at their final destination in the same good shape in which they arrived at the Groesbeck market. "If that calf, or cow, whatever, arrives at its final destination in less than 100 percent health and appearance, then that's a reflection on the consignor and on us."

Hughes says it becomes the auction market owner's responsibility to feed and water the cattle, to present them to the prospective buyer in a "very marketable condition. We re-pen the livestock for that buyer; we keep it until that truck arrives; and we put it on the truck in good condition," he explains. All this is done in about 12 to 18 hours turnaround time, 800 to 2,500 calves a week. This is what livestock market owners mean when they use the phrase "speed of commerce'.

Because of this speed of commerce, the national association for auction markets, Livestock Marketing Association (LMA), Kansas City, Mo., has reservations about the proposed national animal identification program. Bobby Smith, Fairview, Okla, is president of LMA and spoke at the 2009 LMA of Texas annual meeting in Austin in May.

Smith explains the national organization supports a voluntary animal identification program, but not a mandatory program. "I've run my market for 35 years. I don't see any way that it is practical at all at my place, unless those cattle have the tag in their ear when they step off the trailer."

Smith has concerns about more injuries to humans and animals if a mandatory animal identification program is enacted because of the numbers of cattle that will have to be run through chutes and tagged at auction markets around the country. "You're going to have more injured cattle, more dead cattle, more insurance cost, more labor costs, more workman's comp costs.

"We represent the grass roots producers and we encourage them to come to any of our LMA-member markets with their concerns. We'll voice them for our customers,' Smith promises.

Selling the right product

Hughes agrees with Smith that the auction market system works very closely with grass roots producers. His favorite class of cattle to sell through the ring are healthy, young replacement cows or steers from reputable programs, "not big ranches, because most of my customers have 25 or fewer head."

While acknowledging the modest herd sizes, Hughes doesn't allow excuses for bad or no herd management. "We need to educate our customers as to what is marketable and what is not," he says.

"We pull out cattle that are not marketable. I call it 'making the circle' -- that's from unloading, to brucellosis testing, through the sale ring, across the scales, into the holding pen, on a cattle truck, the trip to the slaughter house and she must walk upon the kill floor. If she can't make that circle, we never market her."

When calf prices are high, many producers might be tempted to keep a marginal cow just one more year to get just one more calf. Hughes says that's not the best idea. "They need to market that animal while she still has some salvage value." He says to consider culling the cow at least a year or two years earlier, rather than keeping her in the herd.

"The public is sitting there and a lot of them know nothing about the cattle business. If we put a severely emaciated cow through the ring, it's not good publicity for us, not good for the business, not good for foodservice."

Every auction barn provides the same basic services, Hughes explains. "We receive a commission, three to four cents per dollar evaluation of that calf. We furnish our customer a guaranteed check. It's up to us to collect (payment) from the buyer," but the seller can cash the check he or she receives from Hughes' market as soon as they can get to the bank.

"RMG: Livestock Markets –Valuable Partners for Cattle Producers" is from the July 2009 issue of The Cattleman magazine.