Selling cattle can oftentimes be unpredictable and can leave many ranchers disappointed because of factors out of their control. Each year, cattlemen and women pour their blood, sweat, and tears into their livestock to ensure a healthy crop. With the right marketing tools, cattle ranchers can ensure they come out ahead at the sale barn.
Marketing is often the most challenging part of running any kind of operation but especially a beef operation. The beef market is one of the most volatile markets in the world and is constantly changing. Changes in rising feed costs, increased transportation and processing costs, and domestic demand concerns, just to name a few, help create that volatility. There is no set right or wrong way to market your calves, yearlings, or even cull cows and bulls. However, there are a few strategic ways that are often overlooked by ranchers when it comes down to sales time. There are also a lot of different avenues for you to be marketing your cattle through, each with certain benefits for your operation. Below are our suggestions to help you navigate the challenging task of marketing your animals.
THE GAP IN THE SUPPLY
Every sector of a production industry has a period when the supply for a certain product depletes a little. For example, most cow/calf producers wean and sell off their calves in the fall. Here in North Dakota, most ranchers will wean their calves around the middle of October. In the southeast region of the nation, meaning states like Georgia, Alabama, and Mississippi, where the warmer temperatures and sunny skies stick around year-round, almost 70% of all their calves are still weaned in the fall, typically around October (UGA Beef). That being said there seems to be a trend in the cattle market during this time. Flooding of a market always equates to the prices decreasing, commonly seen in the cattle market (ISU BEEF). Finding that time when the market begins to die back down is the ideal time to sell your calves. That period is typically late January or early February into April.
According to the North Dakota Weekly Cattle Auction Summary, the average 600-650 pound steer in November of 21' was selling for $162.55Cwt on 961 head. On February 1, 2022, that average price was up to $178.48Cwt on 1027 head. A sixteen-dollar difference may not seem like much to you but when you multiply 16 by 6, eighty times you will see a difference. A pot load in February would have grossed that rancher an extra seven thousand or the equivalent of about seven extra heads in comparison to the same load in October. Seems like a great reason to hold your calves back a couple of extra months right? The only deterring factor of that is being able to feed that many. Hay is not cheap by any means right now and no one could afford to feed an extra 150 head in the winter simply because of it. The market may be better off three months from now, but you cannot hold cattle if the grass is gone, and you cannot feed them. It takes a lot of planning to figure out when you are going to sell your calves but if you can sit on your calves until winter runs over, your profit margins will increase.
FOLLOW THE DEMAND
The beef market is not volatile because of limited supply, it is volatile because of consumer demand and macroeconomic conditions. As many different middlemen, there are in the process, the consumer ultimately holds the most power. A distributor is only going to sell products a customer is buying, if not they are going to drop the prices until they do. It is important to follow along with the market and see when the trends are happening. With an excess in supply the price is going to be lower for the consumer, which is going to lower the rancher's price, but when the supply starts to deplete the demand for more of the product begins to kick in (Beef Magazine).
Look at vegetables for instance. They are the most in-demand food products year in and year out. But unlike the beef industry where there is a semi-constant flow of products into the world market, vegetables fluctuate a lot. Certain vegetables like artichokes only grow a couple of months out of the year so the market period for them is merely a quarter of the calendar year. Demand is high in harvest and is especially high when their supply becomes short. Smart farmers will plan the year before for their crops to be late bloomers and will try to hit the depleted market and gain a premium price compared to those who sold their artichokes at the start. The same thing can be applied to the ranchers' efforts. When a rancher sells their cattle during the peak supply, they are going to get less money than a rancher who was able to sell his cattle when supply was short. If market prices are trending up, it typically means the supply is down, which is an ideal time to sell. Additionally, consumers are very swayed to buy beef when the economy is high or when they are making a little extra money. Researchers found that a 1 percent increase in total consumer expenditures will increase beef demand by 0.803 percent (Nebraska FB). Following along with the economy and understanding when certain sectors are profiting can allow the rancher to profit along with it.
LOOK FOR NICHES
Large companies with conventional sales can afford to sell their meat at much lower prices than most cow/calf producers. Therefore, you need to check out other ways to differentiate yourself from the competition. In a market as large as this market, you are bound to come across a lot of different preferences and desires. Figuring out a way to make your beef appeal to those different niches is a huge marketing bump.
Well, think of it this way, if I were to ask you which is better Coke or Pepsi, you would have a specific answer. Even though both products are essentially the same thing just in different packaging, you prefer one better than the other. So, if you can find a niche for which carbonated sugar water you like, indeed you have one for what kind of beef you prefer. Here are a couple of possible niches for beef that you might just have: