Marketing Practices In Beef Cow-Calf Operations

The National Animal Health Monitoring System (NAHMS) Beef '97 Study collected data on the marketing practices of 2,713 beef cow-calf producers representing 85.7% of all beef cows as of January 1, 1997, in 23 leading cow-calf states. Of the operations included in the study, 67.4% sold steer calves, and 52.1% sold heifer calves for slaughter in the year preceding the study. By number of operations, auction was the most common method of selling steers (84.9% of operations) and private treaty was the second most popular marketing method (10.4% of operations). By number of steers sold, private treaty was the most common marketing method. For operations selling either steer or heifer calves, smaller operations were more likely to use auctions as a marketing method, and larger operations were more likely to use strategies such as video, forward contracts, or sale on a carcass basis. As marketing calves on a single day makes profitability dependent on daily market fluctuations, producers may want to consider diversifying marketing strategies to decrease the effects of market volatility. Larger operations were more likely to make use of forward pricing methods: while forward pricing was used by only 1.5% of operations in 1996, 13.4% of operations with 300 or more beef cows utilized this method of marketing. Larger operations were more likely to sell calves in the preceding year than smaller operations; smaller operations with outside income may be able to defer sales for another year during poor markets. Contact for this paper: Stephen Ott