Call the Market

The cattle industry has had a lot to stomach during the last 10 days: From the continued rally in the corn market, to the brutally devastating weather conditions that challenge cattlemen across the United States, to the fact that the legendary Ellington Peek's Shasta Livestock Auction hosted its final weekly sale last week.

It's hard not to have a long-faced, trouble-hearted reaction whenever you hear of a sale barn closing. It's no secret that the sale barn business is a difficult one and few are interested in diving into the financial risk of owning their own sale facility. But each sale barn plays a vital role in the cattle market, but also in the community that they inhabit.

Sales require auctioneers that can sing their cries in the most mesmerizing tune to convince even the most frugal rancher than one more bid never hurt anybody. Sale barns require office help that are willing to work long shifts, stand on uncomfortable concrete and adapt to the smell of cow manure from buyers and sellers traipsing in and out of the door for hours on end. And sale barns require pen help that's willing to bundle up in frigid conditions to keep the sale flowing through the nastiest winter snowfall or spring rain.

If George Jones was going to rewrite his song, "Who's Gonna Fill Their Shoes" to fit the heartache that can come from losing a sale barn, I'm sure it would go something like this, "Who's gonna fill their shoes? Who's gonna stand that tall? Who's gonna sell the cull cows and the oddball pen of steers? Who's gonna give their heart and soul to help me and you? Lord, I wonder, who's gonna fill their shoes?"

When you sit back and let the initial reaction you have of Shasta closing and understand why the Peek family is ready for the next chapter of life, the decision comes with more ease. Ellington's success spans far beyond what most of us ever hope to achieve -- he successfully ran Shasta Livestock since the 1960s, but also still plays an intricate role in the Western Video Market Sales, all while raising a family that lives and breathes the business. Simply put, the man has a wild run of true, honest success.

The troubling fact isn't so much that this one individual sale barn has seen its last weekly sale, but rather that this sometimes seems like a trend throughout sale barns in the U.S. When you look at the sale barn industry as a whole, you notice more faces that are weathered with smile lines, gray hair and hearts filled with trying stories that make our western heritage what it is today. Those old timers are the ones who laid the foundation to the successful marketplace that we live and depend on still today.

The changes that the market has seen during the last 50 to 60 years have been instrumental to the betterment of the cattle market, and even though change can sometimes be an uncomfortable reality, these changes have been vital to the market's longevity and success. Back in the mid-1970s, cattle video auctions were introduced to the market by Pat Goggins of Billings, Montana, which opened a whole new horizon for marketing cattle. Being a man who personally owned sale barns himself, Goggins wasn't afraid of this new platform and, still today, his legacy carries on as his children operate sale barns in Montana and offer video sales through the Northern Livestock Video Auctions, which stands as a perfect example that one cannot replace the other.

There are a number of different reasons why sale barns are vital to the cattle industry and why their stronghold can simply never be replaced or done away with.

First, it's essential to understand that cattle are a cash asset. In most parts of the country, because of the access to local sale barns, you can buy and sell cattle six days a week. These sale barns are a staple to cattle buyers, cow-calf producers and stockers/backgrounders as they all need outlets to make their desired transactions happen. As Goggins once said, "cash is the only asset that gets stronger in bad times," and still today cattlemen depend on sale barns to help facilitate these cash transactions.

For example, let's take into consideration the storm that is affecting essentially the whole U.S. right now. Cattlemen are at their maximum capacity, putting down extra bedding to try to keep newborn calves warm -- they are chipping ice away from frozen water tanks, feeding extra hay and are realizing that, unfortunately, winter has just gotten started. With feed costs as expensive as they are this winter, it wouldn't be surprising to see some producers decide that they need to liquidate some inventory because they can't afford to feed all their cows throughout the winter. Sale barns give producers the opportunity they need to make changes in their marketing plans and successfully facilitate the sales desired.

Secondly, video auctions have opened the door to new marketing options and thrive on selling load lots, but they aren't conducive to small producers or single head transactions. Based on the 2017 Census of Agriculture, the average cow herd size in the U.S. was only 43 head. By the time you consider a 5% death loss, and sex the calves you have to sell, most producers only have around 19 to 20 head of steers to sell.

Corbitt Wall, the host of the daily Feeder Flash Video and Livestock Market Analyst for DV Auctions, put it best: "Every operation has cutbacks, cull cows or that group of misfits that simply need to go to town." He later expressed that video actions are an amazing outlet, but they will never be able to sell the lots of only one to two head, or the cull cows with no teeth or crippled bulls post-breeding season. In all reality, it's as simple as understanding that different operations require different marketing outlets.

There's no doubt that the sale barn industry has challenges, as finding reliable help grows more difficult and as environmental laws are banging at the door. But, thankfully, cattlemen still have different marketing options that they can personally evaluate before selling their stock. Video auctions are a marvelous tool, and sale barns are the heart and soul of a lot of agriculture-based communities.

As cattlemen we need to remember, that we are privileged to have access to these various market outlets and work diligently to protect their future, as consolidation is one of the biggest hinderances to the cattle market.

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Editor's Note: Progressive Farmer Senior Editor Victoria Myers shared an exceptional piece on price projections moving into this upcoming spring. Click on this link to access the article: https://www.dtnpf.com/…

ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com

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