Sep 2, 2014
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Out to Pasture

RSS By: Steve Cornett, Beef Today

Read the latest blog from Steve Cornett.

Guilty as Charged

Sep 09, 2010

Ok, ok. I said it, and I regret it. In a blog "Cattlemen Shouting into the Wind," I painted with too-broad a brush.

Of course auction markets provide an essential service, and so do order buyers. I know that. And I don’t know any order buyers who drive BMWs. (But I did have one show up in a big Mercedes once and offer me $5 under the market for a set of calves and assured me they weighed a hundred or so more pounds than they actually weighed.)

I have used them both and will continue to do so. I quit one auction market once because the auction operator at that time played favorites with traders, or at least that’s what one of the traders told me. I have no reason to assume that is common.

I’m going to reprint three well-composed, thoughtful letters that popped into my inbox after a recent post. They’re right and I was wrong.

Blame me, but blame the Internet, too. In the good old days, a writer had time to think about what he was saying. These blog posts are, at least when I do them, more like running off at the mouth during an argument. You kind of say what you mean, but you may not say it with the considered judgment you employ upon second readings which, in the good old days, we called “editing.” In those days, “clarifying” was what you did to butter. Now it’s what you do to stuff said in haste.

At least in my case.

That is not to say I am a big fan of auctions or other middlemen. The concern I was getting at is that too many producer pay too little attention to marketing. That is one of the big reasons small producers are less profitable than larger producers. Were I an animal rights guy, I would argue that it should be illegal to wean calves on a truck. I’d say preconditioning should be an “animal right."

I am aware that many auctions and buyers are among the most effective advocates of intelligent marketing.

So, as you read these notes from readers, just pretend that after every paragraph I say, “Yes. I know. I apologize.” Because I do.


Mr. Cornett,

Coming from a fifth generation agricultural family and marrying into a fourth generation livestock auction family I am appalled at the bias and one sided views you have chosen to print in your article.   The agricultural industry was built on the family farms and rural America values.    I can assure you that livestock auctions do not let anyone "scalp" their customers because that is how they make a living.   Livestock auctions work on commission and in case you do not know that is a percentage of the gross sales.   This commission is then spent in the area to support the local economy through employees who in turn buy groceries, gas, clothing and so forth.    As for your comment about order buyers it is evident that you have never tried to spend your days driving a pickup (I do not know even ONE that drives a BMW) many miles to attend the auction, help your customers fill their orders at the specifics they requested, locate trucks, fix load cards and walk through the cattle before they start the drive home where they STILL have paperwork to complete before they try to grab a few hours with their families and a few hours of sleep before starting this same day all over again.  

The fact the you are in the cattle business states the you are interested in the agricultural side of America and that you are free to choose the way you conduct your business but I would encourage you that before you completely condemn SEVERAL different aspects of rural America you should check your facts.   Maybe you should step into rural Oklahoma and meet some of the intelligent, good hearted people that work hard to run livestock auctions as well as get to know a true order buyer and you will see that you might realize we all need to work together in positive ways to promote the valued agricultural way of life that America has been built on.

Sincerely,

Sam & Melody Varner
Varner & Varner, Inc.


Dear Mr. Cornett,

I am writing in reference to your recent Beef Today Blog posting entitled “Cattlemen Shouting in the Wind.”  As a livestock auction market owner and operator, I take exception to your stereotyping of auction markets, and your inference that an auction market operator would ever allow a consignor’s cattle to be “scalped” by an order buyer.  Our job is to see that our consignors receive full and fair market value for their product on that given day, and that is what we do.

In every industry, from cattle marketing to journalism, there are bound to be dishonest individuals, and I find being painted with the same brush as these people by someone who has never met me, and has never attended my auction extremely insulting.  Rest assured that the vast majority of us make our consignors’ bottom line our top priority.  A successful auction market is built upon repeat business, and no market ever kept its doors open for long by getting less than market value for its consignors’ product (which is what I assume you mean by cattle being “scalped”). 

A healthy auction market is a great asset to its community, and the effects go far beyond the actual sale of the cattle.  How many people are employed?  How many meals are purchased in town on sale day?  How many tanks of fuel are sold to sale day traffic?  It goes on and on. 

Finally, we offer producers in our area what, for some, is the only viable outlet for their cattle.  In many cases their herd size is such that it is not feasible to market anywhere other than at auction, where their cattle can be commingled with other producers’ cattle into load lots, thus sparing them from discounts due to their small numbers.  We take the producer with ten head just as seriously as the producer with two hundred.

The days of having a sale barn in every small town are long gone.  However, the modern, well maintained, well operated, centrally located auction markets are here to stay because we provide a needed service, and I believe we are owed an apology.

Sincerely,

Justin Gibson
Lamoni Livestock Auction


Steve,

I am a long time reader of your work and as you may remember have been part of some articles on Value Added Marketing. I was disturbed by your blog posting “Cattlemen Shouting into the Wind” and the stereotypical references you made toward auction markets.

I have worked in many different segments of our industry from producer to educator to service provider and now as a market manager. I know that there are bad players in every segment of business(a condition not exclusive to the livestock industry), however I don’t appreciate being lumped in with those folks just because I am involved in the same segment of the industry. My organization works very hard every day of the week to create an environment where producers can garner the highest possible prices for their livestock. We have been innovators and while being committed to the traditional auction marketing system as the very best method of price discovery, have ventured into new territory to provide choices and options for our customers.

My customer is the small to mid sized cow/calf producer along with a large population of backgrounders. I am very proud of the work that we do and the job that we get done for these people, they are the backbone of our industry. Most of them are not interested in feeding their own cattle and probably are not engaged enough in the business day to day to do so. Don’t accuse me of talking down to or criticizing my clientele, I am not, just stating a fact that I hear from them daily. Just because they are perfectly fine to ride the ups and downs of the market and book a reasonable profit doing so does not make them bad business people or bad cattlemen. Just remember we don’t all sit in the middle of the feeding industry, for folks in this part of the world to feed cattle means sending them 1000 miles from home to someone they probably have not and will not meet to hold and manage an entire years production and income. I would remind you that history has also uncovered a few unsavory and several unsuccessful characters in that segment as well. Your accusation that all market operators are running a “lottery” is no more accurate than saying it is a great deal for everyone to feed their own cattle.

I don’t want to go on a rant as I respect your opinions on many issues and appreciate your work, however, I was deeply bothered by your comments and hope that in the future you will think a little deeper before you lump an entire segment of a huge industry into one stereotypical category. You are always welcome to come see our operations and learn about the many options we offer our customers, based on your comments I think that you will be very surprised at what transpires.

In closing our organization and most livestock auction markets contribute very significantly to our local ag and business communities by supporting youth livestock activities through 4-H and FFA, sponsoring untold numbers of producer education meetings and tours and cooperating with our Extension Service and ag media outlets to provide quality and timely marketing information to farmers. Trying call the guy in Kansas, who fed a load of cattle for you last year, and get him to buy your kids steer at the county fair. I am not attacking your opinion on the GIPSA rule, separate issue, I do hope that as a credible journalist you will take time to rethink the characterization that you made in your article.

Jim Akers
Chief Operating Officer
Market Management Services, LLC


 

 

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COMMENTS (1 Comments)

ringman
These comments to me reflect the direct problems we have in the beef industry. Ever farm and ranch brings a unique set of skills and assets to the table. We need to embrace this difference instaed of trying to remove it. Are there a more pure form of price discovery than the auction system? Sure I wish I could p/u the phone and sale a potload of calves but the resources are not there. Don't drive me out of business for the sake of corparate greed, like you did when I was rasing hogs. How many more rural communities do we have to shut down before we wake up and realize our mistakes.
10:25 AM Sep 10th
 

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