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Superior Livestock Auction - Marketing spring and summer cattle

4,265 Views | 23 Replies | Last: 7 yr ago by shaynew1
shaynew1
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AG
Howdy,
My name is Shayne Wharton. I'm a representative with Superior Livestock Auction. We market and sell cattle from the pasture via satellite or internet auction. I thought this week's auction would be a good opportunity to see if anyone on TexAgs had any interest in learning more. I would like to limit the discussion here to an overview and general marketing methods of Superior. If you have some questions regarding your operation and how we might work together, I would much rather talk by phone, PM, or email. I'll also provide a URL to Tomorrow's auction so anyone that hasn't seen one will have the opportunity.

Here's a quick rundown.
If a consigner has a truckload of cattle (or close to one) I will meet with them and write up a contract with the relevant information. Here's an example of a listing:
http://superiorlivestock.com/onlineCatalog?lot=165527&lotIndex=232&auctionId=1501&rep=Shayne+Wharton
Afterwards we will film the cattle. On auction day, when that lot is offered, the film will be broadcast along with the catalog write up as the cattle sell. After the cattle are sold, and depending on the delivery window (immediate in the example), I will coordinate with the buyer and the seller to schedule a delivery day. On delivery day I meet with the buyer's truck, weigh and load the cattle, and write the seller a check from our bonded custodial account.

Here is a list to the current catalog:
http://superiorlivestock.com/onlineCatalog?auctionId=1501
Here is what I have listed on this auction:
http://superiorlivestock.com/onlineCatalog?auctionId=1501&rep=Shayne+Wharton
The SW Cattle is our personal operation, and we have a good chunk of our spring cattle on this one. I was hoping this would show how much I believe in Superior and use it to market my own cattle. I also have growyard cattle, some plainer stockers, and a home raised calf crop for June delivery. I think that's an option a few people don't consider. We're selling two lots tomorrow and will deliver them four months later. We've sold his cattle a long time and are confident on what his cattle will weigh. I just mention that so people might imagine different scenarios where selling for future delivery rather than immediate can be used as a risk mitigation tool.

We can also list calves on the cows if weaning them isn't part of your normal plan. Look through the catalog and you can see examples of different ways we can market.

Tomorrow our auction will be broadcast on the Rural TV. You can also watch it online at:
http://www.superiorclicktobid.com/
I hope everyone interested gets a chance to watch a little and get exposed to the overall process.

If you have any questions here's my contact info, I'd love to talk. Or you can PM me.
Nine.seven.nine 820.121seven
Shaynew1 at Hotmail.com

I will try to keep up with the discussion on this thread but may be slow in replaying during the day.

ETA: I have consigners from Edna and Smithvillr to Sherman and Plainview with everywhere in between. So you more than likely aren't too far away.





SWCBonfire
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AG
1. What is the comission level?
2. How do you determine shrink?
3. Do you delineate the basis from sales price?
4. How do I get carcass/gain/feed conversion data back from buyer?
5. What data does Superior provide to help make marketing decisions BEFORE the cattle are offered; i.e. help determine whether to sell at weaning vs. Vac 45, wean at lighter weight or leave on the cow, etc.?
shaynew1
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AG
SWCBonfire said:

1. What is the comission level?
2. How do you determine shrink?
3. Do you delineate the basis from sales price?
4. How do I get carcass/gain/feed conversion data back from buyer?
5. What data does Superior provide to help make marketing decisions BEFORE the cattle are offered; i.e. help determine whether to sell at weaning vs. Vac 45, wean at lighter weight or leave on the cow, etc.?
1. 2% commission and a $2/hd consignment fee (deducted from the check on delivery). 3% for bred stock.

2. Implicit standards are 3% on the ground, and 2% on the truck or if we have to gooseneck them to scales and weigh them on the ground. Different circumstances may require an alternative - you might see a 1% or even no shrink in some listings - but that needs to be explicitly explained in the contract write up. From experience talking to buyers on the phone during auctions, they take note of the weigh up and bid accordingly or even not at all if something looks off.

I really think putting effort into pre-sorting and good facilities to be able to weigh cattle early and promptly will net more dollars at the end of the day compared to listing them with a smaller shrink and being discounted at the blocks.

3. I don't completely understand your question. Can you clarify it a little for me so I'm not just shooting off answers you aren't after.

4. We don't have an information sharing system in place. I would just have to keep in contact with the buyer. I have gotten feed/conversation performance in the past for consignors and some folks are easier to get that from than others. I haven't gotten carcass info in the past personally, but I'm confident I could persist enough to get a hold of it. The industry is small enough and the guys on the other end keep good records.

5. Unless I'm mistaken, it has been a few years since Superior has done a study to figure an exact premium for the value added programs we offer. I've got a stack of those brochures floating around somewhere...I'll have to find and check the date. It may be a little dated. With the way the market moves it is a definite advantage to be flexible and dynamic in your game plan. I guess the explicit answer to your question would be extrapolation from previous auctions and trades, and staying in contact w prospective buyers to know what they are after. What we like to do is market around a consignors current program and improve it where we are able to, and if the market dictates a different move that makes more money, go for it. For example, a lot of our SW steers on this auction were put together with the intention of shipping at the end of May - first of June (how we usually offer them), but we think there's a high enough demand for smaller cattle coming now that the premium they bring would allow us to replace them with something and net more dollars at the end versus just holding them through graze-out. Some poor sucker has to straighten them out, though.

I'm sure I missed something, so feel free to keep asking.
agfan2013
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AG
Quote:

3. I don't completely understand your question. Can you clarify it a little for me so I'm not just shooting off answers you aren't after.

I think he's just asking if you are transparent in your basis number (i.e. how much the sale price differs from the chicago futures price for the buyer/seller). Could be wrong though.


Interesting concept, I'll definitely check your outfit out and see what yall offer.
shaynew1
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agfan2013 said:

Quote:

3. I don't completely understand your question. Can you clarify it a little for me so I'm not just shooting off answers you aren't after.

I think he's just asking if you are transparent in your basis number (i.e. how much the sale price differs from the chicago futures price for the buyer/seller). Could be wrong though.


Interesting concept, I'll definitely check your outfit out and see what yall offer.


The auction results are part of the LPGMN report the USDA does and we have a few months of recent sale results up on our website if that's what you mean.

http://www.superiorlivestock.com/onlineCatalog/?list=results&type=all


shaynew1
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My main interest today is to get everyone that hasn't heard of us or seen the auction to try and watch some of it. The week is shaping up like we may do some good tomorrow.

Canyon99
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Our organization has used Superior to market and sell cattle for a trust we manage with more than satisfactory results. Give them a look if you are considering alternatives.
SWCBonfire
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Yeah, I probably wasn't using that in the strict use of the term with regards to futures contracts, but question was essentially if other deducts from sales price would occur based on distance from market, or if the purchaser had accounted for that in their bid?
shaynew1
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Thanks Canyon.

SWC: The only deductions from the sale price are commission, consignment fee, and beef checkoff. It is up to the buyer to determine where their bid should be concerning everything else. We have explicit wording for the location of cattle in the contract listings.

What can't be accounted for sale day is momentum both (in both directions). Sometimes the sale prices really can surprise you. I'm hoping tomorrow when we start selling calves (~1 pm) it gets exciting.

As for momentum the other way we do have some options to maneuver. A PO fee of $3/hd allows you to forgo the whole deal. It does need to be announced before the next lot is done. Also Superior will allow you to "scratch" a lot before the sale, and roll it to a following sale day free of charge.

We try to not PO too many.
shaynew1
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Auction gets going this morning at 8.

https://www.superiorclicktobid.com

Click the URL. When it starts, at the bottom left of the screen you there's a box that says enter the auction. Click there. On the next page there will be an option in the center that says watch as guest.
surveyor05
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How did the sale go today? Seems like an interesting model.
shaynew1
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Didn't go as well as I'd hoped after seeing how everything shaped up. It felt like all the enthusiasm left out when we started working on the little cattle. Got most of the stuff I had listed sold along w 27 loads of ours. Some other cattle around didn't get along good at all though.
shaynew1
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In a bit I'll explain a little about what didn't sale...loading some cattle atm.
Sims
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So If I am looking at June futuresand they are down 10 bucks since a month ago

Let's say you and I made a deal end of Jan for $X for June delivery that turns out to be $Y who eats that diff?
agfan2013
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AG
Should be the buyer, you've already made a forward contract at that point so you benefit from having locked in a higher price. Just like the seller would be out a little money if the inverse happened and the futures went up.

But technically nobody would be "eating" the difference, it's just a missed opportunity for either the buyer or seller depending on which way the market moves after the forward sale.


Unless I'm interpreting his business wrong.
shaynew1
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That is correct. The cattle are sold. Yesterday we sold a load of steers to weigh 750 for $127.50 coming June 10-20. Whichever way the market goes between now and then is irrelevant concerning that load.

ETA- That was also ~$3 over the August board regarding SWCs basis question earlier.
itsyourboypookie
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surveyor05 said:

How did the sale go today? Seems like an interesting model.


I came here to ask this
itsyourboypookie
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We've taken out cattle to the sale barn for years. What's the difference/ benefit of using your system?
shaynew1
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Same competitive bidding format, but with a much larger number of buyers from all over. The cattle don't have to leave your place, and you aren't married to the result if you don't like the market that day (PO or scratch). You also aren't responsible for the freight or hauling them anywhere.
shaynew1
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Sellers are also able to realize premiums for value added programs like specific genetics, vaccination programs, all natural, and a number of others. Some are a simple addition that make cattle more appealing and buyers willing to give more.
TBass IV
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I'm looking for someone that will pay 50-60 cents per pound of gain for 5 months. Do you ever come across anyone wanting to do this with loads of calves?
shaynew1
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Yes but right now it seems like there's more grass available than cattle. I've had a few people ask me the same, but haven't found anyone hunting a gain deal. That's just in my network though.

Where are you located?
TBass IV
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Bell county
itsyourboypookie
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Spicy Fried IV said:

Bell county

shaynew1
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This morning I shipped a split load we sold three weeks ago...here's the write up:

http://www.superiorlivestock.com/onlineCatalog/?auctionId=1500&consignor=David++Kirk&lot=165224&lotIndex=1

Ended up sending 32 steers and 26 heifers and had just over 30,000 lbs. Just sharing in case anyone likes the idea of Superior, but is hung up on needing an entire truckload.
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