HOW TO STEAL A GOOD ONEby Gary Mitchell on 03/18/19
Who doesn’t want a good deal, especially on something you wish to buy anyway? I often get complemented for (or accused of) getting the steal of the stock sale. This happens often enough that my friends seek me out to see what I am going to buy prior to the start of the sale, so that they can jump on that train. In many, but not all sales, the best one typically brings the most money. If you were attending your first stock sale and wanted to buy the best one, you could simply jump in on the one that everyone else is running up and be the final bidder. This often happens when “new money” enters the industry. As a matter of fact, in a live sale, the sale staff will be in on the game too. That is a subject for another day. Today I am talking about buying the one that everyone else says afterwards “that was the buy of the sale”. This will apply to either live or online sales, but the tactics will differ slightly. I have managed too many live sales back when I cared about being a known name in the cattle industry. I hired several Auctioneers, Sale Consultants, and Ringmen over the years to gain a good understanding of the psychology and science of setting up a good live sale. Most Sale Managers will start the sale with an animal that will appeal to the greatest number of people in the audience, budgets included. In other words, start with the one that will cause the most hands to come up to bid. This lot will attract everyone from the bottom end of the high-rollers list to the top of the bargain-basement bidders list. The intention is to loosen up the crowd. What happens (in real life) is that the crowd sits on their hands waiting to see if $2,500 is going to be a high or low number today. When lot #1 brings $2,500, the question of whether that was high or low depends upon how the other 89 lots sell. The trick is to have a full understanding of the price-value relationship for any given animal on any given day. This, like anything worthwhile, can only be accomplished by putting in your time and educating yourself. I have attended more live sales of multiple species of livestock than most people I know, and I watch 5-20 online sales (depending upon time of year) nearly every weeknight, thanks to multiple online livestock sale sites. This allows me to look at a sale, the sellers notoriety, the quality of the photos, pedigrees, body condition, and presentation of the stock, and be able to “guess” within 90% accuracy what the stock will bring that day. I am not bragging. You could easily say that I have “wasted” time watching sales that could have been spent watching TV, socializing, etc…..however it is what I do for my entertainment. With that being said, let me give you some pointers on how to get “the buy of the sale” bought.
Let’s start with live auction sales.
The first one to sell is usually ranked 3rd to 5th in quality in the whole sale. They were selected to sell 1st to appeal to all the crowd, not just the high rollers or the bargain basement bidders. However, the crowd is not yet warmed up. The buyers just want to “watch a few sell before bidding”. Usually, the 1st one to sell winds up being a good buy. Own it if you like it.
To get top dollar, sale stock should be bloomy. This would include being fatter than you would keep your stock at home, however, if you can see the good in one that is in thinner body condition (less fat), then you deserve to steal (in the sense of getting a good buy) that one. To evaluate muscle shape in a green one (not as bloomy), look at the forearm and stifle. If they have a big forearm and the stifle pops when they walk, the top and butt muscle will come with feed. These are the kind that can truly get better every day you own them, instead of melt away after the sale.
To enhance marketability, hair is “popped” or fluffed up to look thicker than they really are; using good fitting techniques. This takes time, effort and skill. This is good salesmanship. You clean and fix up your used care before you sell it, right? Livestock are no different. If you can look at livestock offered by less talented fitters, or not fitted at all, there are bargains to be had. You need to look past the hair on the belly, shoulders, and front end to see what a sculptor sees when they look at a block of material. Typically, it is the talented fitters who have the skill of the sculptor to see past that ball of hair. They can get the good ones bought cheap, do some clipping and fitting, re-sell the stock, and turn a nice profit.
Regarding online sales:
All the above apply, except for sale order. In an online sale, the animal with the best photograph typically is lot 1. As a sale is presented on a website, you will see lot 1 first, lot 2 second, and then decide if it is worth your time to scroll down. Sometimes lot 1 is the best one, sometimes not, but it will be the one with the best photo. The car dealer doesn’t stick their low-end models in the front of the show lot, do they? No, they are in the back, with the high-end models out front to attract your attention.
It should go without saying that if you can view an online sale offering in-person prior to the sale, that is better than not being able to see them. This is not always practical, if you are watching a sale in TX and you live in OH. Taking a note from point #1, I have been to several pre-sale viewings where the best animal in person took a very average photo, and as such, is lot #4 in the sale. If you cannot view them in person, ask the seller which lots are better than their photos. Some are, some are not. Go with your gut regarding the breeder’s answer. They can’t all be the great one.
While I like the social atmosphere of attending a good live auction, the rise in popularity of the online sale format is the future of livestock sales. I can evaluate and bid on more livestock in a short period of time, pay with a credit card, text my favorite hauler (I keep a list of good ones), and my new purchase shows up in my yard in a few days without having to leave my house. Those who sell online, are likely more pre-disposed to use social media to promote their livestock and their sale. Social media can be a curse or a blessing, much like a hammer can be a useful tool or a weapon. I am not here to debate that topic. But be aware (teenage buyers in particular) that some sellers can overuse social media as an addiction to their own fame. This can cause you to think that their livestock are more valuable than they really are. The fact that I update my blog about twice a year should indicate that I am not in that category.
The brand name recognition of any farm plays into the value of their livestock. If a seller is coming off a year where they promoted several national and state fair champion, even their bottom end is going to bring 50-100% more money than that same animal would cost from a lesser known breeder. If I continue with the car examples, $15,000 gets you a nice late model used vehicle from your favorite auto dealer. That same $15,000 gets you a non-running clunker at the Ferrari dealership. If you can look past a name, especially if you are on the lower end of the buying scale, your dollar will spend farther with a lesser known breeder on the same animal. This is not to take anything away from the great marketers who also have great livestock. But the title of this blog is “how to steal a good one” not “how to pay maximum price for an average one”.