Marketing Weaned calves through the Alabama SAFE Sale

by | Apr 20, 2018 | Beef Cattle, Certification, Educational Training, Livestock, Market, Production Meeting

Cow-calf ranchers have an opportunity to add value to the weaned calves they sell, through a cooperative board sale.  For the past 24 years cattle producers in Southeast Alabama, Southwest Georgia, and Northwest Florida have joined together to form marketing groups that jointly offer weaned calves in groups.  The main concept of these board sales is to offer uniform groups of calves that have been weaned for 60 days, have been vaccinated and boostered, from producers that are Beef Quality Assurance (BQA) certified.

Ideally the cattle are sold in ~50,000 pound truckload groups, but they do not have to be.  In 2017, there were 12 lots of less than truckload-sized groups that sold.  The cattle are videoed over the summer, so that buyers can see the quality, and are sold through a telephone conference call auction that originates from the Houston County Extension Office, Dothan Alabama.  Mosely Brothers Cattle Company, Blakely, GA serves as the sales consultant to provide a bonded middleman to connect buyers and sellers.

The cattle never leave the farm of origin until the agreed upon delivery date. The cattle are either weighed on the ranch or on the truck.  If they are weighed on the truck, at the closest truck scale, the final sale weight will include a 2% shrink.  Weights made prior to loading at the ranch include a 3% shrink. The buyer makes the trucking arrangements and pays the freight costs.

What are the key advantages to this type of sale?  

The primary advantage is that cow-calf producers can sell groups of cattle through a telephone auction, so neither buyers or cattle have to be on-site. Buyers have access to more than 2,500 head of uniform, source verified cattle from some of the better managed ranches in the area.  The buyers are provided health sheets, with verified treatments from a licensed veterinarian.  Each calf is tagged with the farm of origin, so buyers can track performance and purchase from that farm again in the future.  The cattle are never commingled with cattle from other farms, unless two farms sell jointly to fill a load.  Ranchers get a premium for selling cattle with two-rounds of vaccines, that have been weaned and fed for an extended period. The buyer purchases groups of cattle that remain healthy because they have been immunized correctly, have been started on feed, and are more uniform than trying to put groups together from auction markets where cattle must be commingled from multiple farms to make uniform truckloads.

The bottom line for the rancher is that they can sell weaned calves for ~$100 per head premium.  The chart below compares the 2017 SAFE Sale prices to similar weight calves sold that same week.  Although this comparison is not completely fair, because the calf delivery was one to two months later, it does give you an idea of the value comparison at the same point in time, and an approximate increase in value from participating in this sale last year.

What are the disadvantages?

Selling in a joint sale will always create challenges. For these Board Sales to work, every member and buyer has to agree on the set guidlines. There is also more work, expense, and risk with keeping cattle on the farm an extra 60 days after weaning. The reason for the 60 days is that it takes time for weaned cattle to get back to their original weight after weaning, and to adjust to life without Mamma.  Since these cattle are kept separate from the main herd, ranchers also have to provide space for them from weaning until delivery.

Cattle are sold based on weight, but with a Board Sale the seller has to make an estimate of the average weight at the advertised delivery date.  To make this estimate work, cattle are sold with a “price slide.”   The SAFE Sale catalog explains price slide with this statement, “Price slides are used to protect against weight variances by adjusting the final bid price (sale price), which allows for a more accurate calf value for transaction between a buyer and seller based on the actual delivery weight (including shrink).”  For example a rancher estimates in July that his steers will average 625 pounds at delivery, but in September, when the cattle are weighed for delivery, the steers actually weigh 660 pounds.  The price per pound would then be adjusted $8/cwt lower, because the cattle were heavier than estimated. The price slide then protects both buyer and seller, because the auction is held one to two months in advance of delivery.

Want to learn more about the Alabama SAFE Sale?

The following links show the catalog from last year’s offering and also a summary of the final sales.  There is also an example of one of the videos from a Florida ranch that participated last year.

2017 Alabama Safe Sale Catalog

17 AL SAFE Sale Results

The following is the video was provided for buyers to view steer calves that were sold through the Alabama Safe Sale by Melvin Adams, Graceville, Florida, in 2017

[youtube https://www.youtube.com/watch?v=DrPaYB-Qma4?rel=0]

Think you might want to participate?

The 24th annual Southeast Alabama Feeder Cattle Marketing Association (SAFE) sale has been scheduled for 6:00 PM, Thursday, August 9, 2018 at the Houston County Extension Office, adjacent to the Houston County Farm Center (1699 Ross Clark Circle, Dothan, AL 36301).  If you think you might be interested in joining the association, now is the time to get started.

  1. The first step is to get your BQA Certification.  BQA certification is important, even if you don’t participate in the Board Sale. BQA training is something every rancher and their employees should participate in.  Check out the video that explains why this is important.
    [youtube https://www.youtube.com/watch?v=aO8PzKdZyb8?rel=0]BQA Certification requires completion of a series on online training video modules.  Utilize the following link to access the Cow-Calf BQA Certification training module.
  2. The next step is to contact Rickey Hudson, AL SAFE Sale Coordinator, and let him know you are interested, and provide an estimate of the number of cattle you want to sell, so the farm tags can be ordered.  You will also need to get a copy of the Calf Health Record & Processing Sheet that will be included in the sale catalog with your cattle.
    Rickey Hudson
    Regional Extension Agent – Animal Science / Forages
    Wiregrass Research & Extension Center
    334.693.2010 (office)
    334.726.6814 (mobile)
  3. The third step is to work with your local veterinarian to set up the health protocol, and vaccination schedule.  Make sure you use the Calf Health Record sheet to document the products used.
  4. The final step is to work with Mosley Brothers Cattle Company to get a video made, and develop a listing for the sale catalog.

 

Doug Mayo
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