Here Are 5 Considerations When Planning Your Cattle Market Sales

The marketing methods you choose for your livestock operation can have a big effect on your income and net worth over time. But no matter where you sell your cattle, one of the biggest ways you can ensure success in the marketplace is by building trust with your buyers by offering quality livestock. In other words—how you care for your cattle is going to speak volumes about your operation and how you do business.

With the longevity of your operation in mind, Redd Summit Advisors has assembled a list of five considerations to make as you plan to market your cattle. There’s no one right answer to this task, but knowing the variables involved can help you choose marketing methods that both work with your operation’s schedule and bring a maximum return on your investment.

"The marketing methods you choose for your livestock operation can have a big effect on your income and net worth over time."

1. Add Value to Your Livestock with Good Management Practices

You don’t have to participate in an actual program to add value to your cattle, although formal programs such as Source and Age Verification (SAV) can certainly help you gain more dollars per hundredweight when you’re ready to sell. Some practical ways to add value are simply vaccinating on a schedule, using consistent, quality genetics, and feeding quality rations and supplements. You can also try preconditioning your feeder cattle to help boost value.

2. Aim For Uniformity in Your Herd

The more uniform your cattle are, the easier they will be to sell as a whole. That said, you may find it helpful to plan your breeding decisions like timing and genetics according to how you plan to market your cattle in the future. Even a small shift in weaning windows can give you time frames in which you can capitalize on better sales markets.

If you don’t have uniform cattle, consider sorting them by size and age before taking them to market; sellers are often discounted if their lots are not uniform. And don’t try sneaking a sick or injured calf through with the rest. It never works …

3. Look Into LRP Insurance to Help Mitigate Market Risk

Livestock Risk Protection (LRP) Insurance is a USDA-subsidized insurance product that helps protect against market declines in cattle prices, without sacrificing your upside potential. Through this program, you can lock in a floor price for your cattle (similar to a put option) and get paid an indemnity when market prices go below the coverage price for the endorsement period. Altogether, it’s a risk management product that works as an excellent supplement to your operation’s marketing plan.

4. Consider Value-Added Programs to Enhance Sales Potential

The term “value added” has been a phrase in the agricultural industry for a few decades now, and in the cattle industry, enrolling in a value-added program may get you an additional $3-$7 per hundredweight in revenue when you sell. Before you decide on a particular program, however, make sure to calculate all the costs and understand the terms of the program. Often, you’ll be charged an enrollment fee, a per-head program charge, and a base fee for onsite third-party audits.

5. Weigh Out Your Sales Options When Building Your Marketing Plan

When it comes to selling your livestock, you’ve got more options today than you would have had decades ago. Private treaty, local sales barns, online auctions and personal sales at your ranch or barn are all popular ways to market livestock, and the venues you choose are usually a matter of your particular marketing style. For example, how important are personal relationships with your buyers? What credentials set your cattle apart from others? How do you advertise your cattle to attract potential buyers?

Conclusion

As you decide how to market your cattle, you need to determine a risk level that you find acceptable and sales price levels that bring you the best margins. Know the dollar amount you need when you sell and make herd quality known to potential buyers well ahead of the sale to generate more interest. In the end, do your best to put your best foot forward, so buyers remember the quality level you offer.

Macy Holmgren

Macy Holmgren is a Digital Marketing Intern at Redd Summit Advisors.

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