By Natasha Wilkie, BSA, PAg, Regional Livestock and Feed Extension Specialist, Weyburn
Have you ever dreamt about that infamous crystal ball that forecasts when the market will peak and you are able to market your calves at the exact moment that translates into a hefty profit? I’m sure most people have. Marketing livestock may not be this easy, but you can manage a few of the puzzle pieces with a little knowledge of marketing options and your product.
Producing live, healthy calves requires hard work, commitment and time. To ensure your hard work pays off, effort also needs to be put into marketing those animals. Evaluating the various marketing options available is a great start. Each marketing option - auctions, online sales, and direct marketing -comes with pros and cons. This first step is taking a look at your operation; depending on your situation and management style, there may be a benefit from trying a different type of marketing.
Consider the time commitment of marketing. How much time can or should you commit to marketing your livestock? Remember, the dirt, sweat, and tears that goes into producing a live, healthy calf shouldn’t go unnoticed at marketing time. Think about the time of year you plan to market your livestock and how involved you want or need to be in the actual selling process. Also, consider your product: what makes it superior and can you capitalize on that?
Another piece to consider when evaluating marketing options is cost. Each marketing option offers different shrink deductions, price slides, and administrative costs, such as commission fees. Let’s delve into the concept of shrink a little more. Shrink is the amount of weight an animal loses from the time it is initially handled for transport until the net sale weight is taken. Shrink happens, but luckily, there are ways to minimize weight loss due to shrink. Handling methods and facilities affect how much weight an animal loses as well as weather, livestock temperament, the number of animals on the truck, along with a host of other factors. Producers can also minimize their economic losses from shrink by determining the amount of pencil shrink a buyer will deduct: it never hurts to inquire with the buyer if shrink is negotiable.
Another critical piece of information to know is your cost of production. Without this piece of the puzzle, it is hard to determine what price would or should trigger you to sell your calves rather than backgrounding or grassing them? Record keeping may not be as appealing as managing your grass or deciding how to feed those animals once they come home; however, when margins are tight, it’s one area that can be closely examined and managed. Important records to keep include inventory numbers, the number of females exposed to a bull, and the number of calves weaned.
Keep in mind, marketing isn’t always about getting top dollar. Rather, it’s about turning a profit to effectively manage your business. Thankfully producers have tools to help manage their risk, including the Western Livestock Price Insurance Program (WLPIP). For more information on marketing terminology or calculations, contact your local Regional Livestock & Feed Extension Specialist or call the Agriculture Knowledge Centre at 1-866-457-2377.