Online livestock auction held at Holiday Inn
Date posted: August 27, 2013
SHERIDAN — Sheridan’s Holiday Inn was brimming with Stetsons last week as 190,000 cattle were auctioned off with the aid of online streaming video, live TV broadcasting and a phone bank.
The Superior Livestock Auction Big Horn Classic represents a technical revolution of livestock marketing, and Sheridan’s sale is the company’s second largest in the nation.
The event featured 17,000 head of cattle from approximately 100 consignors within Sheridan and Johnson counties among the national participants.
The traditional method of marketing cattle is for ranchers to truck herds to a sale barn and trot them through an arena to be scrutinized by potential buyers.
Superior Livestock Auction’s method involves broadcasting video of the animals and taking bids via telephone, online and in person.
The five-day Sheridan event could be described as a home shopping channel for cattle buyers across the nation. For the live crowd, the event is similar to a traditional livestock auction, complete with the bounding voice of an auctioneer and the feverish yips of crowd spotters who maintain their stare not only at the live audience, but also Internet monitors and phone screeners calling in bids. The dusty sale arena is exchanged for an air-conditioned conference room with multiple video projection screens showing the lot up for consideration.
Superior Livestock LLC President Danny Jones said the company’s nationwide broadcast of available stock brings in higher beef prices for producers.
“Rather than in a local market, cattle are able to be marketed across the country,” Jones said.
Jones added that a bigger audience of buyers makes for more competition in purchase price. After the sale is settled, the cattle can be picked up directly from the ranch and taken to their new homes, which is usually a feed lot.
Jones said he is able to guarantee buyers get what they pay for by relying on the integrity of his field sales agents, who establish a relationship with ranchers and count on them to do their best to keep cattle in good condition during the time between the video is taken and it’s viewed by buyers.
The advantage, he said, is the livestock don’t have to endure the sale barn, a trip that takes a physical toll on the cattle.
“It saves a lot in terms of stress on the animal and health of the animal. It’s much more efficient system for buyer and seller,” Jones said.
Mike Lohse came to Sheridan from Kaycee to see his four truckloads of calves on the auction floor. He said he has never relied heavily on sale barns to sell the majority of his livestock because it’s hard on them.
“Sale barns are OK later in the year,” Lohse said, adding he does go to a barn to get rid of odds and ends. “Though they do chop up your cattle a little bit.”
Lindsay Wood of F Lazy M Livestock, Arvada, explained the metaphorical “chop-up” to which Lohse referred is weight loss and risks cows are exposed to on the way to the sale.
“You’re arranging trucking at that point, you’ve got shrink on your cattle, you’ve got stress on your cattle, your co-mingling them with other animals so there’s more potential for illness and things like that,” Wood said.
“By the time they get to the feed lot or grow yard or wherever they end up going, you’ve got more chance for poor performance and stuff like that, which reflects on your cattle. As your cattle perform better, you get a better reputation, and a better market value for them,” she said.
Wood said another big advantage of video auctions is that a seller doesn’t have to take what the market offers on the day cows are trucked to the sale barn. It’s easier to refuse a price that’s not quite right when a seller hasn’t already invested in the logistical efforts of getting cows physically on the sale floor.
Craig and Tammera Kennedy came to Sheridan from the Kennedy Vale Ranch in Rock River to see their cattle sell. While it’s technically not necessary for a seller to appear in person on the auction floor, they came as a gesture of good faith.
“I think it shows you genuinely care,” Tammera Kennedy said.
The Kennedys used to market their livestock in Omaha, Neb., to be sold through a commission firm. They said that business, along with other methods of cattle trade, has dwindled since the rise of video auctions.
“In years gone by, cattle buyers would drive up the road and buy cattle in the country,” Craig Kennedy said. “That’s kind of dried up.”
While a video auction may alleviate some of the heavy lifting required to sell cattle, the social aspect of sale day is still alive and well.
“People in the livestock business still like to put a face with the cattle and shake hands,” he said.
While the concept is the same as always, cowboys using technology often goes against an outsider’s conceptualization of the how the West works.
“The entire industry has been shocked, I think it’s fair to say, at the response and how much (video auctioning) has contributed to the process of marketing cattle,” Jones said.
Jones said a rancher showing up in person to the auction can also commemorate the culminating event of a year of hard work.
“For many of these producers, this is their only payday — once a year.” Jones said.
“Though we sell hundreds of lots a day, we sell one lot at a time,” Jones said. “We are very mindful and conscientious about doing the best we can on every lot.”
Beef prices are up this year because last year’s drought coupled with a difficult economic climate has created a nationwide livestock shortage. While that makes the price of a steak go up, it’s good news for cowboys.