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Marketing Outlet

Auction, Direct, and Electronic
    
Which marketing outlet you pick can make or break your operation

        It’s easy for the rancher raising his beef cattle to solely focus his or her attention on the herd and the ranch, forgetting all about the marketing end of the business until it is, unfortunately, too late.

     Today, with the advent of the computer, there are numerous ways to market your cattle, but deciding which one to choose is important and must be made after careful consideration of each method.

 Auction

     The traditional cattle auction is still, by far, the most popular method of choice. First introduced in the 1930s and 1940s, when America began laying the stretches of highways bi-ways and train tracks across the country, the auction quickly proved a very convenient way to sell cattle, and auctions began popping up all over the country to accommodate the growing industry.

     For most, auctions provide the convenience of driving their cattle a relatively short distance to the nearest auction market. Auctions also provide a means to sell quickly, that day usually, and the check is usually in hand by the time the head home. Auctions also provide a means to market any animal, not just a specific breed or the best of the herd. Most importantly, you will generally receive the best going market rates. This can be a disadvantage, though, because the seller has virtually no input in the price they will fetch. Marketing costs at auctions will vary, so its possible you may end up paying more to sell a head of cattle at an auction and see less profit.

Direct Sales

     Direct sales involves selling cattle from one ranch to another, directly to a feed lot, or from a feedlot to a packer. As buyers seek out more specific cattle to satisfy their particular need, direct sales have become increasingly more popular. Also, with huge feedlots now in place, ranchers can sell a large number of cattle directly to one buyer. Direct sales allow you to directly negotiate based on your herd and you can then use the bets aspects of your cattle to get a higher price. You can also establish solid relationships with buyers, ensuring return business and increased reputation. Direct sales also usually mean lower selling costs.

     With direct sales, though, the ultimate responsibility lies with the seller. You must keep abreast of market conditions, know your cattle and be prepared to justify—and lower—your initial prices through the haggling process. Direct sales also provide less opportunity for communication of pricing information and market conditions, and prices and sales are usually unreported, so you are left to your own devices.

Electronic

     Perhaps no marketing technique offers greater possibility than electronic forms, specifically the computer and today’s internet technology. Video technology, though popular, is expensive, but is gaining in popularity. The benefits of the computer and internet are many, and provide ranchers from small to large the opportunity to reach out to the world to market their product. This allows you to hit numerous buyers you may never have reached with more traditional methods. This also allows you to narrow down your focus, and perhaps focus on niche markets which generally appeal to a smaller number of people willing to pay higher prices for certain traits in the beef and cattle. Delivery schedules, sales and information regarding the cattle themselves can all be done electronically. This can lower your costs to sell, returning higher profit per head. Also, less stress can be put on the animals or product because it can be sent straight from the farm to the buyer. This does; however, have its downsides, as many times, you might be working sight unseen. Also, you never know who is on the other end of the computer. Also, internet access in rural communities has yet to catch up with that of more populated areas. Numerous ranches will not have the ability to get the needed technology to make this an effective marketing form, and, if they do, it could come at high monthly costs.

     In the end, each marketing outlet has its pros and cons, and you must evaluate the ultimate goals of your operation, the herd, and other considerations before picking one. Ultimately, it is best not to settle on one technique, and instead, use your resources to tap into all three and more, and hit as man buyers as possible.

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