As we near Independence Day, things are flying by at the Greet Ranch. The other day our yearling steers sold. I just walked in from gathering the heifers to draw blood for a pregnancy check tomorrow. And those steers and heifers will ship in the next week: the steers to their new owner and the heifers up the mountain for some greener grass and cooler weather.
This week I wanted to get into the sale of cattle using a video auction. Big Trails Beef has the benefit of meeting the final consumer face-to-face and having a relatively set price for our beef. The price does not jump up or down depending on what the futures boards are doing and what the trade climate is a the moment. However, most people are dependent on buyers who watch these things day to day.
So here is how it works. We consign our steers on a particular sale, this was Northern Livestock Video Auction's "Early Summer Special." The auction actually occurs in Billings, Montana, but is broadcast over the television and internet so people can see videos of the cattle and bid from anywhere. We advertise that the steers are certified by IMI Global to meet the standards for Verified Natural Beef (VNB), Non-Hormone Treated Cattle (NHTC), and Global Animal Partnership "Pasture-Centered" (GAP Level 4). We also explain that they are coming off of grass (not out of a feedlot) and post how much we think they will weigh, a date range for delivery, and how many we have. Our sale representative uses this information and his contacts to market our steers getting a commission on the sale.
At sale time the auctioneer takes bids until the final price is reached. We then have the option to "no sale" if we think they are underpriced. We and buyer agree upon a date for delivery and when the time comes, we weigh our steers and put them on the truck. We have a certified scale on our place which means we don't have bring another one in for this job. Our representative is there and will sort off any steers that he believes the buyer will not want. For example, animals with short ears from being born on a cold day, animals that don't fit with the size of the rest of the bunch, or maybe a white calf in a herd of all black calves would be sorted off.
Once all the steers are weighed, the weight of the steers that are going on the trucks is averaged. Three percent "shrink" is taken off the average weight because of the weight that will be lost during transport. Then this "net weight" is compared to the weight that we advertised the animals at. Say that we put the steers on the sale at 800 lbs. On shipping day, they average 850 lbs. After the 3% shrink, they net 824.5 lbs. In this example, they are overweight and the price "slides." A slide if they are overweight means that for each pound over our price is lowered eight cents. So an example would be that we received $160/cwt, or $160/hundred lbs) and were overweight 24.5 lbs. The price would then go down $1.96 (24.5 lbs. x $0.08) to $158.04/cwt. This slide can also work the other way and if we are light we get a four cent slide up (half of the slide down). Each of these slides is limited to 30 lbs. I hope you all enjoy math after that explanation (the numbers were just made up, but are in the ballpark of the current market).
The commission is then paid to our representative and the brand inspector checks our brands on each animal which another check being written to the Wyoming Livestock Board for this. Finally, the steers are loaded on the truck and going to their new home. This year our buyer is in Texas (*An update on this: the buyer is actually in New Mexico and the steers are going to a feedlot in Nebraska where they will remain in the "All Natural" program.*) so the steers will have a long truck ride ahead of them.
As always, feel free to ask me anything if this sparked some questions. I will try to take some pictures of the blood testing that is going to happen tomorrow. Have and good week and a very happy Independence Day.
by Brandon Greet