Sale barn, video auction, or direct: where to sell a record calf crop

The calf crop you will sell this fall is worth more than any in history, and the choice of where to sell it has never mattered more in dollar terms. Here is how the channels compare.

The local sale barn

How it works: haul them in, they sell that day, you get a check.

Pros: simple, immediate, no commitment, works for any number of head. Competitive bidding on a good sale day with order buyers in the seats.

Cons: commission (usually 2 to 4 percent plus yardage and insurance), shrink from hauling and standing, and the price is whatever that day's buyers bring. Small lots and mixed lots get discounted. On the big fall run days, the market can be thin because everyone's calves are there at once.

Fits: small to mid-size herds, odd lots, culls, anyone who needs the check this week.

Video and internet auctions

How it works: a representative comes out, videos the cattle on your place, and they sell at a scheduled auction weeks or months ahead of delivery. Buyers bid on the video and the description. Cattle stay on your place until the delivery date, then weigh on your scale or a nearby one with a slide for weight variance.

Pros: cattle sell to a national buyer base rather than whoever showed up Tuesday. No hauling shrink; cattle weigh on the farm. You can sell in August for October delivery and lock a price before the fall run. Load lots consistently bring a premium over the local barn, often $5 to $15 per cwt on comparable cattle.

Cons: commission is similar or slightly higher. You need load lots, generally 50,000 pounds, roughly 90 to 100 calves at 550 pounds, though some services will pool smaller groups. The description had better be accurate, because the buyer can reject at delivery. If the market rallies after you sell, you sold too soon.

Fits: anyone with a semi-load of uniform, preconditioned calves and a scale.

Direct to a feedyard or backgrounder

How it works: you and a buyer agree on a price and a delivery date, usually with a slide. Often a repeat relationship year over year.

Pros: no commission. No shrink if they pick up. A buyer who knows your cattle and their performance will pay for that history. The most predictable channel.

Cons: you are negotiating one-on-one against someone who buys cattle every day. Without a price discovery reference (the barn, the video sale, the CME index) you may leave money on the table and never know. Requires uniform lots and a track record.

Fits: operations with consistent genetics and health programs, selling the same class of calves every year.

Retained ownership

Not selling at weaning at all: background the calves 60 to 120 days, or feed them through to finish, and sell them heavier. With grass short and corn near $5, the cost of gain has moved against this in the last month. Run the numbers with your own feed costs before deciding; retained ownership is a bet that the gain is cheaper than the market's price for it.

What gets a premium everywhere

1. Preconditioning. Weaned 45 days, two rounds of respiratory vaccine, bunk-broke, dehorned, castrated and healed. Verified programs (VAC-45 and similar) bring $5 to $15 per cwt over bawling calves and the gap widens in years when calves are expensive and buyers cannot afford a death loss.
2. Uniformity. Same breed type, same weight range, same sex. A load of 100 that look alike sells better than 100 that do not, and 20 head that look alike sells better than 20 that do not.
3. Records. Vaccination dates, sire information, age and source verification. The buyer is paying for reduced risk, and paper is how you prove it.

Whichever channel you use, get a price reference the week you sell. USDA AMS publishes weekly feeder cattle reports by state, and the CME Feeder Cattle Index is published daily. Knowing the market before you sell into it is the one thing that works in every channel.