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CATTLE TODAY

SPECIAL SALES BRING PREMIUM PRICES FOR CALVES

by: Heather Smith Thomas

Local auction yards and alliances can be a good place to get premiums for your calves, if you take advantage of special sales. Whether these sales are for preconditioned calves, age-and-source-verified cattle, CAB or natural cattle, buyers know they can go to that sale and get what they want—and sellers are rewarded because of the demand created by special sales. Many auction yards and regional alliances are making efforts to enable cattlemen to consistently market their calves successfully, taking advantage of special sales. Even if stockmen don't have a truckload, they can co-mingle their calves with others of similar weight, type, condition and health processing, to create attractive truckloads for buyers.

SPECIAL SALES AT AUCTION YARDS -- East Tennessee Livestock Center in Sweetwater, Tennessee is an example of a local auction yard that has been working for a long time to obtain premiums for their customers. Owned by Mark and Jennifer Houston, this auction was started by Mark's father in 1962 and is now in its 47th year of operation.

They started doing graded calf feeder sales many years ago. “Before Mark's dad started the auction, he was an Extension agent. When they started graded calf sales it was a cooperative venture between the state Extension service and the state livestock association,” says Jennifer. Calves were graded by the state, weighed, and grouped according to breed, weight, sex and grade. They were grouped and graded and sold in uniform lots. If you had one 500 pound black heifer, she would sell with however many other 500 pound black heifers (of similar grade) there that day. A person with just one or two calves can receive the same price as the person with a trailer load.

When premium (certified health) sales came into existence 15 years ago, Tennessee started what they called the TNT program. “For these sales, calves need two rounds of vaccination. All the states were doing different things and the Southeast came up with a uniform set of guidelines we called Southeast Pride. That worked for awhile, and we were one of a few markets that kept that up,” she says.

These sales evolved over the last few years into Pfizer SelectVac sales. “Pfizer went into partnership with us when we first added electronic ID tags to our special sale nine years ago. At that time they said, if you'll use SelectVac, we'll buy the ear tags for the farmers. It was a new concept at that time. The farmers were used to the graded sales but didn't know about the EID tags,” says Jennifer.

“After a couple years of those sales, we added age and source verified sales. In the last three years these have evolved into full fledged PVP (Process Verified Program, in which cattle are certified for export) sales, affiliated with the Southeastern Livestock network, and through them to AgIncLink.” For this, stockmen go through a certification program, keep records on birthdates, or calving season dates on the farm, plus the Pfizer SelectVac health program, and the calves are graded and sold in uniform lots.

“Those sales have been very successful over the years. Our state extension person, Dr. Emmit Rawls (an economist with University of Tennessee) has done studies on how much extra money some of those sales have returned. His comparisons showed that premiums from last year's sale ranged up to $14.34 per hundredweight. There have been significant premiums for cattle going through these sales, as compared to the regular Tennessee auctions' weighted average for that type of calf that week,” says Jennifer.

Many farmers have been marketing calves through this auction ever since the first TNT sales. “Each year we pick up a few more customers, as more and more producers learn about selling their calves this way. It's a little more record keeping for some of them, or making sure their records can be easily found if an auditor comes in, but well worth it,” she explains.

Two years ago they added a December sale, exactly like their PVP feeder calf sale in September. “Those are our top of the line sales, using electronic ID, PVP, etc. All these producers are BQA certified,” she says. They've done all they can to ensure ideal health and conditions for these animals.

“We also have 4 premium calf feeder sales. They are not electronic ID nor PVP certified, but the calves have gone through two rounds of vaccination and a health program that's open to other programs besides SelectVac. The cattle are healthy and farm fresh,” says Jennifer.

Any cattle brought to graded sales are farm fresh, directly from the producer. They have not gone through any other sales and have not been stressed by previous transport. “They are brought in the day of the sale, we process them and sell them that night and load them out that night,” she explains.

The premium feeder calf sales provide another option for the cow/calf producer. He may not want to go the extra step of becoming PVP certified or may not be able to sell in September or December. “So we have a premium feeder calf sale in January, March, August and October. This gives people other options if they are on a different calving schedule or for whatever reason they don't choose to participate in the PVP sales,” she says.

They have four more sales that are just regular feeder calf sales. These calves are farm fresh and are state graded. “They usually receive a little more per pound, especially if they are black or black baldies, than they would through a regular Wednesday auction, because they are being sold in large groups. This attracts more buyers and a different set of buyers,” she explains.

They also have special Holstein feeder sales. “Our region has a lot of dairy cattle. About 20 years ago, before Mark's dad retired, he saw we had a large number of Holstein steers on our Wednesday sales and decided to have a graded Holstein steer sale. We now have seven of those, each year. These are run just like the other feeder calf sales; those calves are brought in farm fresh, graded by a state grader, grouped and sold in uniform lots. These sales have been very successful. A lot of farmers buy Holstein steers in the spring, graze them through summer and sell them in the fall. It's a ready made market on both ends for the farmers and for guys who want to carry steers through winter—buying them in the November sale to put on whatever crop aftermath they have, and sell them in the February or March sale,” says Jennifer.

These sales have been so successful that they get Holstein steers from a very large area. “Because there are so many sale yards here, cattle generally don't travel very far to market because they may have three markets within 50 miles, but our graded Holstein steer sales draw cattle from several states because these sales are so unique. For many years we were the only place you could see 1,800 to 2,000 Holstein steers at one sale,” she says.

Another option is a video sale, for stockmen with semi-load lots. “We do ours a little different than Superior or other video sales, because we can do it on an as-needed basis. We offer it every Wednesday at 4 pm during our regular sale. Mark will go out and visit the farmer ahead of time, video the cattle, write a description of them, their health program, weighing conditions and potential date of delivery and I type it up and fax it to about 30 of my regular video buyers,” she explains.

“We send that information to our buyers ahead of time, and on Wednesday they have a number they call in if they are interested. We sell the cattle over the phone, at 4 p.m., whether it's one load or six loads. We have a few Wednesdays where we don't have any, and others where we sell several, and we can do it fairly quickly. If a customer says he needs to sell some on Wednesday and it's Tuesday morning, if Mark can get out to his place, we do it,” she says.

This works well for backgrounders who have large groups of calves. “Our video sale is another way our producers can get a little extra money for them. We cut the checks the day they bring the cattle in to load, and we bill the buyer,” she says. Most of these cattle are delivered within a 10-day window.

Their auction yard tries to provide many options and services and periodically has producer meetings to let people know what's going on or discuss a particular issue that needs to be addressed. They have many repeat customers and buyers because the sales are so successful and buyers have good success with these calves.

“We've tried to be innovative through the years, to help our customers. We've been computerized since 1986; we were one of the first markets in Tennessee to have computers. That allows us to do a lot of things. When we do the electronic ID, for instance, we have scanners that go straight into the computer so it's all paperless,” she explains.

“Most auction markets are very willing to work with their producers. Having a special sale is a numbers thing. If you and your buddies can get together and offer truckloads of cattle, they will always bring more money. Some people put together a Hereford-only sale, for instance. We'll work with anyone who wants to make it work. It's a partnership and we try to look at what people need and tweak it to fit the way they are doing business.”

REGIONAL ALLIANCES – Emmit Rawls, Extension Ag Economist, University of Tennessee, has been working with stockmen, market alliances and auction yards for many years, and collecting data on price comparisons. His figures show that stockmen almost always benefit from added value on calves marketed through these special sales. He points to the Tennessee Livestock Producers (a Farm Bureau service company that operates a couple of markets and a video sale, and now facilitates several alliances as well). They have personnel who go out an evaluate an individual's herd and help the stockmen decide what kind of bulls they need, to produce better feedlot calves. “They focus on growth, carcass traits and some maternal traits. These calves will have more genetic consistency than what's typically found in most preconditioned calf sales,” explains Rawls.

These alliances usually have a July, October and December sale. “All the calves that go through these sales have been weaned at least 45 days. The cattle are put together to be well matched and are sold at the same time,” he says.

“Some of the special auction sales and several of the alliance sales have sent several groups of cattle to feedlots, in our Tennessee Beef Evaluation Program, where they've collected carcass data and gain data. They use this data to help promote the sale the next year. Since they have fed out at least a sampling of the cattle from herds that are selling in the current sales, they can share this data with buyers regarding what the performance has been. Buyers today want to know all they can about what they are getting, so this is a way to provide some of that information—that is far and above what you'd find with typical auction-sold cattle,” explains Rawls.

At the September premium sale at the Sweetwater auction yard, for instance, all the cattle had Pasteurella vaccinations about 30 days before the sale, and the Angus-sired calves all had BoviShield 5 modified live virus vaccine. They were all fed Amprolium, a coccidiostat, and had several extra health measures. “There's a long history behind that sale, and the premiums for cattle that go through it have grown over the years, as buyers find out what these cattle are. If you have at least two buyers who know what they are, and the cattle are sold at auction, those buyers will always pay a little more for them,” he says.

Having cattle process verified for age and source also helps. “That's worth money right now, from $20 to $40 per head. It's worth that much to the guy who finishes the cattle and sells them to the packing plant, and we feel that some of that added value is being bid into the original price, so the producer gets some of that back,” says Rawls.

“We have yet to figure out a method where you could actually determine exactly how much the age-and-source piece is worth. Some research in Montana on the Superior video sales indicates that there's some specific value related to age and source. But in my opinion, unless you have a comparable sale that's exactly the same except for age and source (and can look at the difference in price), it's difficult to separate out that particular piece of the attributes associated with these cattle. If they are weaned, on a health program, with desired genetics, in truckload lots, these are all attributes that make them worth more. We've had buyers at these sales specifically looking for age-and-source verified cattle, and if you figured out how many times those buyers bid, you might get some idea how much more this would be worth,” he says.

Some of the advantages of selling through this type of alliance include less shrink, compared to weigh-out auction sales, since the cattle are weighed upon arrival, and often less commission per head. Premiums are usually given for PVP cattle, and also for any heifers with known genetics that might be purchased as potential replacements. Because of these factors, a growing number of producers are looking toward alliances or special sales for marketing their calves.

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