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Committees > Marketing > Marketing
Slaughter Goats through Livestock Market
Auctions
This article
addresses marketing your slaughter goats through livestock auctions.
I will also be describing the New Holland Livestock Auction Market,
one of the largest goat markets in the Northeast US.
One of the nice
things about auctions is that a producer expends little effort
finding a buyer when dropping goats off at an auction. Another
advantage of livestock auctions is that auctions usually have to be
bonded, thus, guaranteeing a producer prompt and reliable payment.
The big downside is that there is no control over what price you
will accept for your animals. This can make for a financially risky
exchange. However, there are a few steps a producer can take to
either 1) make the venture less potentially risky or 2) use it to
make contact with future direct buyers.
My number one piece
of advice is phone the auction manager in advance and let him/her
know you are coming. Auction managers are busy people so sometimes
you need to phone the office staff first and ask them when’s a good
time to call the boss. When you get through to the manager, describe
the type of animal you have for sale and the quantity you plan on
bringing. Solicit their opinion on the best week to bring them in.
This allows them to work on locating buyers for your type of animal
if they need to. In addition, some managers operate as order buyers
for wholesalers and retailers. Because of this, they may have direct
knowledge on what orders they need to fill. Even if they are not
order buyers they usually have a good idea of how many buyers they
expect certain weeks and what the demand is projected to be. If you
are bringing in a large number of desirable animals it is in their
interest to try to insure you have a positive marketing experience
so that you will continue to bring your animals.
If you have more
than one auction in driving distance from you, phone several of the
managers. This way you can compare their projections on when market
demand will be highest and also get a feel for who is most
enthusiastic about getting your business. It is not out of line to
ask for an estimate on how many goat buyers they have lined up that
week and what sort of price range they are expecting. That does not
mean their projections are going to be accurate. However, someone
who has presented a glowing picture to you is usually going to try a
little harder to sell your animals at a good price than someone who
is pessimistic, acts as if they could care less if you bring them
your business or is very vague about what buyers they have lined up.
For example, last Easter I phoned several NY auctions to ask if they
were having an Easter auction. Two auctions were very enthusiastic
about their sales and volunteered that they had lined up several
buyers and urged me to attend and tell other producers. Another
auction said that they had sent out reminders to all their buyers
urging them to attend and anticipated a good sale. Several of the
others responded in lukewarm tones that “yeah, we’re having an
Easter sale” and when I prompted them about buyers, said “well, you
know, our regular buyers will probably attend”. Without fail,
average Easter prices received for lamb and goat were far higher at
the three more aggressive markets than at the lukewarm respondents.
If you talk to several different auctions you can also compare their
fees and commission rates.
If you have
several local auctions on different days of the week that are likely
to have the same group of buyers at them it is usually best (all
things being equal) to attend the earlier auction. If the same group
of buyers attends one auction on Monday and another on Tuesday,
chances are some of them will fill their orders on Monday reducing
the Tuesday competition and dropping the price. Of course, the other
side of the coin is that by the last auction buyers may be more
desperate to fill orders if animals have been in short supply and
will pay higher prices. It’s all a gamble.
You should check
whether the auction permits you to specify a floor price for your
animals below which you will not accept a bid. Few auctions make
provision for floor prices. However, if they do, be sure to take
them up on it.
The order that animals enter the ring is
at the manager’s discretion. Be sure to ask the manager what their
policy is and if it is within your power do what is necessary to try
to get your animals in the ring early. (Again, this strategy may
fail you if animal supply is limited and buyers get more desperate
and prices higher as the auction progresses). However, keep in mind
most buyers don’t like to support an auction where there are not
many animals to meet their orders. Thus, if you have picked an
auction that solicits a lot of buyers your best bet is to get in the
ring relatively early.
With this in mind,
find out if animals can come in the night before. If so, what is the
cost and are hay and water available to them? Suckling kids may look
pretty gaunt after a night without their dam. However, if you are
selling weaned kids or yearlings, bringing them in early (if food
and water are available to combat shrinkage) may be to your
advantage. In many auctions it improves your chances of getting in
the ring early. It also gives your animals a chance to recover from
a long trip without looking tanked up.
You can also use auctions to sell to a buyer whose prices you like
and whose credit rating stinks. In this case, it’s advisable to
phone the buyer and find out when they are going to have a high
demand for the type of animal you are producing. As the time of
demand approaches, contact them to find out what local auctions they
will be attending. Ask them to look out for your animals. You can
then double-check with local auction markets to see which auctions
are expecting that buyer to attend. If a more lucrative auction than
the one the buyer has suggested you attend says that they are
expecting him/her there, call the buyer back and say that it turns
out it’s easiest for you to attend that auction instead. In all this
conversation, the hint that it’s their credit that bothers you will
probably come out without you having to be rude or offensive. In
answer to questions on why you are going to the auction rather than
selling to them directly you can say that unfortunately the farm
policy is to sell animals on a cash basis. The buyer may respond
with a willingness to pay you in cash.
Auctions can also
help you build up relationships with buyers. If the auction manager
is willing to give you buyer names in advance, you can locate their
phone numbers and call them up to introduce yourself and to ask them
to watch out for you and your animals at the sale. Some auction
managers are proprietary about buyer names (especially if you also
ask for their phone numbers!). If so, it is worth your while to be
present at the sale rather than just dropping off your animals. You
can introduce yourself to buyers and hand them your business card
when they are looking over animals or you can watch as they bid and
either introduce yourself to them afterwards or ask who ever you are
sitting next to if they know their name. When you get the check from
the livestock market, be sure to record the buyer’s name if it is on
there. Otherwise you can try to call the auction to get more
detailed information about which buyer corresponds to that name or
number. However, not all auctions will share this information.
Follow up with a note or call to the buyer suggesting that they
contact you the next time they need similar animals. Either way, the
next time you have animals for sale, you will have some buyer
contacts to call prior to making a decision to auction your animals.
Auctions are inherently risky, thus, it’s a good idea to not
restrict your business to this sole marketing opportunity.
To try and
minimize risk producers can seek out large regional auctions that
are supported by numerous buyers and have fairly robust prices.
Several large auctions have their average prices publicized on the
web or in various marketing publications making it easy to track
price trends. However, keep in mind that a single producer is a
small fish at these auctions. If you enter the ring late, your
prices may be far below the average. The same rules of contacting
the auction manager prior to attending the sale, trying to make
buyer contacts, etc. hold true for regional as well as local
auctions. In addition, if the regional auction is near any large
private treaty buyers, you may want to make arrangements to take
your load of animal to the buyer for a bid first before going on to
the auction if you can’t agree on a price.
The Monday morning
sale at New Holland Sale Stables, Inc., New Holland, Pennsylvania is
probably the largest goat sale in my region. Information about many
regional auctions is available on the web at
http://www.sheepgoatmarketing.info/PageLoad.cfm?page=directory/marketReport.cfm&type=3.
Ken Smoker, one of
the owners of the New Holland Livestock Market, is also its manager.
According to Ken, number of goats sold at New Holland has continued
increasing this year with ~2600 goats sold at the Monday sale prior
to Easter and ~1300-1800 goats sold at each of the Monday sales
during the month of Ramadan. During each of these sales ~40 bidders
were present representing 50 to 60 actual buyers. Ken estimates that
only ~25% of the goats at Easter were sold for the traditional
Italian and Greek market in “Easter kids”. Easter kids are typically
18 to 30 lb. live weight suckling kids. However, small hide-less
carcasses dry out rapidly. Because of the hide-off regulations
instituted in the United States in recent years, the size of desired
Easter kids has increased to about 25 to 40 lbs. However, Ken
estimates that ~75% of the goats bought at Easter were filling the
demands of other ethnic groups for family festivities during the
vacation. Fifty pound kids, weaned or not, were in very high demand
at New Holland for the Easter holidays. Ken said that unless smaller
suckling kids went through the sale in “A1 condition”, the price on
them might only be ~$20 for a 20 lb. kid. His advice for meat goat
breeders is to hold them to at least 50 lbs. Prices for well
conditioned 50 to 60 lb kids have remained robust and Ken reports
that even in mid July, prices are averaging ~$1.00/lb. live weight.
He does predict that the price will drop sharply for September and
October before recovering for the Ramadan season.
One hint that
folks might take from this is that it is best to sell your top
quality typical “Easter” kids direct to the buyer or through highly
promoted local sales rather than sending them a long distance to a
regional sale. Another hint is that you do not need to apologize at
Easter for your Boer/dairy cross kids gaining ½ lb. on their dams
even though these kids may be 40 to 60 lbs. at 8 to 12 weeks of age.
They are still in high demand at Easter as many of us have observed.
Ken’s comments suggest that the Easter season has opened up to
include more ethnic groups than traditionally expected, thus leading
to an acceptance of a larger kid.
Ramadan will be
starting November 27th this year and ending on December 27th. There
is a strong demand at New Holland for large young bucks during
Ramadan. Prices are also high for 50 to 80 lb. wethers and doe kids
with all their milk teeth. In a phone conversation with Ken on July
7th, I asked him if Boer-cross male kids 8 to 10 months old and
weighing 70 to 110 lbs would generally have their prices reported in
market reports as small and medium bucks rather than kids. In the
past, I had been told they were reported as kids. This has caused
problems for NY producers trying to sell such goats to NYC buyers
based on New Holland prices. Ken responded affirmatively that this
past Ramadan big buck kids in this weight range were often reported
as small bucks rather than kids. He also stated that New Holland
could sell a group of goats by the lb rather than by the head if a
consigner requested it and if the group was large and very uniform.
He felt this might be a benefit to consigners with Boer-cross goats
as buyers tend to underestimate their weight but would be a
disadvantage for consigners with dairy or Spanish goats whose
weights tend to be overestimated. He predicts that we may see a
gradual trend towards selling goats by the head rather than by the
pound but predicts that this trend will be fairly slow in coming.
According to Ken, selling by the head often makes sense because 1)
goats are generally sold in small lots and 2) when the lots are
large, they often include a wide variety of goats that fit the needs
of a very diverse group of buyers.
As an auction
manager, Ken makes the decision on what order animals enter the
sales ring. Ken says that suckling kids that have come in the night
before usually go through the sale first. They are followed by the
consignments of his regular, weekly shippers. After this he tries to
send through goats that have arrived before 5:00 am followed by
those that arrived after 5:00 am. However, he says if you have the
bad luck of being in a pen that is sandwiched in by other pens, he
is going to have to sell those pens before the handlers can reach
you.
Bob Herr, who runs
both Nix Besser Livestock Company (order buyer at New Holland) and
his own goat feedlot, likes to say that there is a person for every
goat at New Holland. Some ethnic groups want small goats some want
large, some want castrated males, some want bucks, some want lean
goats, some want fat. However, there are some goats that are harder
to sell than others. Pygmy and angora goats have a reputation for
having little meat on their carcasses. However, Pygmy kids command
top prices because they make great “shoebox” kids for many ethnic
groups to offer as a sacrifice upon the birth of a child.
Extremely fat
goats are penalized by most cultures because this fat is viewed as a
waste that will drop out of their body cavity at slaughter. Your
standard Boer buck in show condition would be considered extremely
fat as would many dairy does at the tail end of lactation. Does that
look pouchy (i.e. possibly pregnant) are also penalized by most
buyers. More moderate body conditions are harder to call. Suckling
kids can be as fat as you want without any penalty. However, some
ethnic groups have absolutely no tolerance for fat on a weaned kid
or yearling, while other cultures feel the lean kid definitely needs
a few months in a feedlot.
The Muslim goat is usually characterized
as still having milk teeth. However, older goats are also in demand
for the Muslim trade during the Festival of Sacrifice, which will be
March 5th this year. These animals must be “unblemished”. Different
Muslims have different interpretations for unblemished. For all, the
animals must be sound with no open wounds, broken horns,
deformities, and for most it must be uncastrated and not docked (in
the case of lambs). Disbudding and eartags are usually acceptable.
In summary, young, healthy goats with shiny short coats are always
in demand at New Holland. Ken Smoker feels that meaty, well-fed
young goats will always bring good money. As a buyer, Bob Herr
seconds this with the belief that goats with “ smooth hair, a hair
coat that shines, and a clear eye, trim and well muscled are hard to
beat for the price, all things being equal.” |
