Out with the Old in your Cattle Marketing?
Not so Fast!
Significant differences exist in the use of new and traditional cattle marketing
outlets in the United States, and these differences can vary from state to state and, sometimes, county to
New advances in technological cattle marketing techniques, such as
the Internet and video sales, have also fractioned off some ranchers, many larger scale, who are readily employing
these new techniques to their benefit. But several ranchers, especially those in rural areas, do not have such
ready access to modern communications, and, when they do, they involve methods and means that have been
technologically exceeded, particularly in regards to hi-speed Internet connections and video transfer.
Though economists and scientist admit there should be more study,
there are known indirect benefits associated with these new marketing techniques that many are beginning to
But without documented evidence, Internet sales among smaller ranchers have not come
close to the smaller ranchers propensity to hit the local auction, which is still the favored place to sell cattle.
In fact, recent studies show the jury is still out on which methods return the most bang for your buck.
Internet Sales Slow to Catch On in Cattle Marketing
observation, a recent study noted, is the small role played by Internet sales in the catt marketing of stockers.
“In order for Internet sales to grow, this channel must compete with video and private sales, given that producers
with relatively smaller herds tend to market their cattle through public auctions. Internet sales are at a
disadvantage to private sales and video auctions because a certain level of technological competency is required in
order to participate in an Internet auction,” the study indicated.
For the more rural and isolated rancher, dial-up internet access is the norm, but makes
the use of Internet auctions technologically infeasible. Interruptions in service, delays in data and bid transfer
all hamper the smaller rancher when he or she jumps online to market their herd. Instead, the smaller rancher still
enjoys the human-to-human contact at the local auction, not too mention the atmosphere, and will gladly move their
herd to auction.
Studies also indicated a rancher’s reputation impacts pricing. According to the study,
a rancher with a positive reputation “will realize a higher price across all cattle marketing channels,” and does
not have to pigeonhole themselves into one particular cattle marketing channel.
Video Auctions for Cattle Marketing
Video auctions far surpass Internet auctions in usage among ranchers, and this
may be attributed to the technology required, which is less expensive and has shown to be effective and reliable.
Studies found that quality uncertainty remains an important issue in both formats due to the limited amount of
information available in video in both. This may be one explanation for the relatively slow rate of adoption of
these marketing channels when compared to the traditional live cattle auction.
Nevertheless, a 1991 study found additional information, not readily accessible in the
traditional auctions, may be available in video auctions (e.g., vaccination records, place of origin, and current
feed regimen). This information could be used to improve animal health and feed lot efficiency, and, when well
documented can be a strong factor when a buyer is weighing their purchasing options.
Other factors in Cattle Marketing
There are additional factors which explain the relatively low percentage of cattle
marketing through Internet auctions. These include several types of indirect transaction costs, such as:
- Slow and unreliable Internet connections cause unacceptable delays between the time the producer submits a
bid and the time the results are received;
- Lower levels of computer literacy among cattle producers
- The necessity for minimum herd size lots
- Security concerns
- Payment concerns
- The quality and reputation of the cattle sold
- Producers may receive a lower price than they would through other marketing channels
Whatever the case, no study has definitively proven that the benefits of modern day
sales and cattle marketing techniques outweigh those of the traditional live auction. And, when auctions provide a
means to network, increase reputation among the ranching community and information sharing, these intangible
benefits seem to take precedent over, at least the smaller ranchers, need for new technology.