Cattle-buying is virtually a click away in 2020

We have all been doing it this year—with a pandemic becoming a new way of life, fear of crowds and less options on store shelves, online shopping has just become the way we are getting through 2020. In fact, the U.S. Census Bureau reported consumers spent $211.5 billion during the second quarter of this year on e-commerce shopping, sales were up 31.8% quarter over quarter and compared to last year’s second quarter, e-commerce sales had increased by 44.5%.

Along with toilet paper and disinfectant spray, important High Plains staples—including cattle—were marketed online during the pandemic and livestock sales have also seen a big uptick. This virtual shift has brought both advantages and drawbacks to the business of cattle marketing. Kristen Parman, Livestock Marketing Association vice president of member services, said many in the cattle industry were afraid being forced to move auctions to online platforms would mean less online participation. Fortunately, this prediction turned out to be incorrect.

“To be quite honest, especially in those first few weeks of the crowd limitation rules being enforced, we saw close to a 500% increase in buyer registration requests across the LMA auctions platform,” Parman said. “The online auction option really allowed folks to still stay engaged and kept that competition level up at each one of the auctions.”

With seller interaction, Parman said LMA probably saw just as much, if not more involvement by consigners that wanted to be able to watch their cattle sell, and due to the COVID-19 restrictions, would have been unable to attend the sales.

“It really allowed them to remain involved and watch their livelihood be marketed,” Parman said. “We took a lot of pride in knowing that we were helping consigners still be present and part of the marketing process.”

Danny Jones, president of Superior Livestock Auction, agreed saying the online environment has not been a hindrance to buyers or sellers.

“I think if they are familiar with both methods they are leaning toward buying online more than they normally would,” Jones said. “With those who aren’t comfortable bidding online, our observation has been that they haven’t let that stand in their way to go ahead and do what it takes to buy cattle. I believe that this virtual shift has opened a door to online and televised video auctions in a way that it necessitated it and as a result, I think people are more comfortable. We have a lot of new registrations to bid online, so I think we are going to continue to see that grow and this helps spur that along.”

Good news in 2020

Jones said some of the advantages of video marketing online or televised auctions are increased buyer base, price discovery and competition for cattle.

“In several instances, we’ve seen auctions have to broadcast the sale online because of COVID-19 and found that those sales had better competition for their cattle as a result,” Jones said. “In some cases where an auction has been forced to go online for the first time with purebred sales and even sales from livestock shows, many of them are planning to do it again even if COVID isn’t restricting them next year because it added so much to their buyer base.”

In fact, since buyers do not need to spend the extra time traveling to in-person sales and sitting through auctions, it has meant buyers can be participating in more than one auction at a time from behind their smartphone or computer screen.

“For the producers, I would certainly say it’s truly real-time market reporting,” Parman said. “It’s the ability to tune into sales across the country and see what various classes of cattle are bringing at any given time and use that information to make better marketing decisions. We get that feedback from producers that are watching their local sale and other sales from across the country. They just feel better informed about what’s happening in the moment.”

According to Jones, there are also health advantages of shipping cattle direct from the ranch to end-user. When cattle are sold online, rather than shipped to an auction barn, and then to the buyer, they are not put through as much travel time and exposure to other cattle who could pass along illnesses.

Avoiding the stress of travel, unloading and reloading, goes a long way toward preventing diseases like Bovine Respiratory Disease, or shipping fever, which is often caused by stress from transportation. It is among the most common illnesses to affect cattle and one of the most costly. According to Bovine Veterinarian, BRD accounts for approximately 75% of feedlot morbidity and 50% to 70% of all feedlot deaths and causes an estimated $900 million annually in economic losses from death, reduced feed efficiency, and treatment costs. Prevention of unnecessary travel mitigates risk of BRD contraction and protects the animal’s immune system.

With change come challenges

Although the increase in online cattle auctions this year has proven to be a positive in many ways, with a dramatic, short-notice shift in the cattle buying process, there were bound to be some kinks to work out. According to Parman, internet access turned out to be the main problem for many farmers and ranchers.

“I’d say the biggest challenge that our member auctions have faced is good, stable, high-speed internet service in rural areas,” Parman said. “It really just heightened the awareness that there is a lack of high-speed internet either for the auctions, their sellers or buyers that were wanting the participate in the sales. Many of them were forced to look at mobile data plans that can incur a high cost very quickly.”

Additionally, there is a palpable lack of social interaction that comes with attending an auction from behind a computer screen. Ask any farmer or rancher and he will say half of the draw of going to a cattle sale is interacting with others in the industry. Along the same lines of the benefits of attending an auction in person is the ability for buyers to view animals first-hand and without relying on the capabilities of a cameraman who records footage of animals up for sale in online auctions.

However, even with a few snags, online cattle auctions in 2020 have turned out to be a glimmer of hope during a disastrous year, and anything that can put more eyes on a set of cattle on sale day is a step in the right direction.

“The online auctions just expand the toolkit from what the auction operators specialize in by working for those consigners and developing relationships with the buyers and facilitating that movement of cattle through the supply chain,” Parman said. “I think whether they’re selling them in the brick and mortar business to buyers sitting on the seats or they’re selling them to a buyer that is clicking to bid in front of a computer monitor in the comfort of their home, it still boils down to the relationship of the auction with that seller and with the buyer.”

Parman said she believes virtual has a place in the future, but the cattle selling business has and always will depend on relationships, so there will continue to be a place for both types of auctions in the future.

“As we see different challenges in the industry, whether that’s drought conditions, in certain areas, or as volumes of cattle move differently from region to region, virtual expands those opportunities for buyers to participate in the sales, but I still see the necessity in the brick and mortar livestock auctions,” Parman explained. “They’re alive and well and still have critical importance for the producers that rely on them.”

Lacey Newlin can be reached at 620-227-1871 or [email protected].