Editorial

Preparation and Strategy

BY Jerry Nelson as told by Lindsey Howald Patton | | Comments (0)

Backgrounding

In the area of Mississippi my sale barn served, the average size of a herd was about 30 head. Backgrounding those cattle only made sense if three or four producers were willing to put their herds together and market their cattle as a large semi-truck load ready to go west. In that instance, if the calves were a similar size and could be sold together, backgrounding made a difference. Buyers would pay more to avoid having to pay the $15 or so per head to have them vaccinated once they received them. That would be a selling point during the auction.

But if you’re selling just six or seven of your own calves and they’re getting penned and hauled with a larger order, the buyer would re-vaccinate all of them anyway because it’s too hard to keep track of which ones already had their shots at home. I wouldn’t recommend spending money on backgrounding in that case. That’s not to say that a herd healthcare program isn’t important; normal vaccinations are an important way for any producer to insure his investment.

Weaning

With the biggest sales of the year in March, April, and May and in September, October, and November, calves should be ready to wean and come off in those months. Depending on a producer’s program, there are two different ways to time it.

It’s often easier, if one wants to sell a calf on Monday morning, to pull it off the cow on Sunday evening and take it straight over to the stockyard to check in. The con there is that there will be a certain amount of weight lost before the sale. That calf isn’t going to do anything but stand there and bellow for a few nights and not eat a thing. You’ll lose some pounds before the sale, and then the order buyer is going to consider the calf rocking backwards for a week to a week and a half—losing 40 to 50 pounds of body weight—when bidding his price per pound.

But when you take a calf that has been backgrounded and has already been weaned and put on feed, he’s going to just put his head back in that feed bucket and keep right on gaining. An order buyer is going to pay more for that calf, although it’s more work and cost on your end.

Pricing

I didn’t spend a lot of time looking at the futures and commodities market. That was an end of the business I never tried to let influence me. If a man called me and said, ‘Jerry, I’ve got 25 good calves, and I want you to come out here and take a look and tell me when you think is the best time to sell them,’ I wouldn’t drive out there and say, ‘Let me go back home and look at the market.’ With five sale barns in my 60-mile area, I was likely to see a stockyard trailer go by with 25 calves on it bound for another yard. I would never tell someone to sell their cattle before they were ready, but I didn’t decide that by looking at the futures market. I knew from talking with my order buyers when the market was going to take a nosedive, or from experience when the market would be full at different parts of the year.

My job was this: I had 48 sales a year, and at each sale I made sure there was a strong slate of buyers there who would bid up a decent price, along with as many head of cattle as I could get. I am a firm believer in a competitive bid price being the right price, regardless of what the markets are saying.

Choosing a Sale Barn

Different commission rates are worth considering when choosing a sale barn—here in east-central Mississippi, it might range between 3 and 5 percent. But the truth is, choosing a sale barn really goes back to what kind of customer service you get there. I can’t say enough how important it was for us to instill confidence in the producers in our sales area.

To that end, it was important to furnish a facility that’s enticing to producers. The overall cleanliness of the stockyard is a big issue for me. I have seen stockyards that weren’t well-kept and were still successful, but for me a once-weekly cleaning of all the cow pens and the sales building was mandatory. Even our restrooms were as clean as what you’d find in a restaurant. Around 2006 or 2007, the president of the National Cattleman’s Association visited our stockyard one day during the sale. And he commented to me, ‘You know, I’ve been in the cattle business for more than 40 years. I made my living in several aspects of it, but for about 10 years I was an order buyer. And I can truthfully say that I would give 10 cents a pound more for cattle out of this barn, because of the cleanliness.’ So it makes a difference.

I will say that many things have changed in the few years since I left the stockyard business. I like to say that as long as we have a cattle business, the one thing that will remain consistent is that it’s always changing. That’s just the industry, and that’s the way it’s always been. It will never hit one plateau and stay there.

In closing, let me say that no stockyard owner or manager will ever know all there is to know about the business, and the hardest lesson I ever had to learn was that no matter how hard you try, you can’t please everyone. We all try, but we all fall short. Overall, I truly enjoyed my years at the stockyard, and although it’s been nearly four years since my retirement, my wife and I still run into people who say they miss us. That always makes us feel good.

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