Minimum bids

[Frankie]

We went to a bull sale today (not an Angus sale). They had set a $1500 minimum starting bid on the bulls. Only about half the bulls sold. Personally, I don't think that setting a minimum is a good idea. What do you guys that sell bulls think? Or those that buy bulls. Would you go to a sale based on whether or not they have a minimum bid set?

BTW, a minimum bid shouldn't be confused with a floor. We do that with bulls and cows that we take to sales. I've seen auctioneers take a low starting bid and run it up pretty good. But if no one even bids, it's hard for the auctioneer to get started.

 

[RD-Sam]

Sounds like a bad idea to me, but I can see a floor being set. People get caught up in the bidding and alot of times they will pay a little more than planned due to competing, if they never get started, how can they compete? :lol2:

 

[Red Bull Breeder]

Thats a tough spot for the auctioneer don't give him any working room. Would i go to a sale with a minimum bid would depend on what they had that i wanted. But setting a minimun that is right there where you can buy alot of young bulls off the farm for don't make sense.

 

[braunvieh]

We saw the Pharo bull sale on RFD-TV the other day and noticed all the bulls had a minimum price and the bidding started there, it differed for each bull. Some sold for the minimum, some much higher and some never got an opening bid. They sell lots of bulls so they must like it. As a buyer you have some idea of what you are going to spend, which would be nice.

 

[HerefordSire]

We went to a bull sale today (not an Angus sale). They had set a $1500 minimum starting bid on the bulls. Only about half the bulls sold. Personally, I don't think that setting a minimum is a good idea. What do you guys that sell bulls think? Or those that buy bulls. Would you go to a sale based on whether or not they have a minimum bid set?

BTW, a minimum bid shouldn't be confused with a floor. We do that with bulls and cows that we take to sales. I've seen auctioneers take a low starting bid and run it up pretty good. But if no one even bids, it's hard for the auctioneer to get started.

I think it would depend upon the genetics. If superior genetics are for sale, I would think all cattle would be sold regardless of the minimum bid. If you have something a buyer wants, money is no objective, especially since there are tons of cash waiting on the sidelines.

 

[Red Bull Breeder]

80 and 90 cent calves tightens alot of belts, and keeps people from paying extra for bulls.

 

[Frankie]

80 and 90 cent calves tightens alot of belts, and keeps people from paying extra for bulls.

That's true. In addition, this was the first sale for this ranch. For whatever reason, there weren't a lot of buyers there.

 

[hillsdown]

I have received numerous catalogs with a "minimum" price at the sale for bulls as well as replacements. They sell to the highest bid and those that have no bids at minimum are held and offered at a later date for the same minimum bid.

I think those days are over and some of the greedy will be gone, when we (producers) are among the few in the last 10 years that have not only NOT gotten a cost of living increase, but have had to actually take a cut in pay I think sellers will have to be happy to even get the minimum bid..

 

[hillsdown]

I think it would depend upon the genetics. If superior genetics are for sale, I would think all cattle would be sold regardless of the minimum bid. If you have something a buyer wants, money is no objective, especially since there are tons of cash waiting on the sidelines.

BUT, the money train is getting slim even on the sidelines..You cannot keep spending without receiving something in return and the cash cow has run dry..

 

[DOC HARRIS]

We went to a bull sale today (not an Angus sale). They had set a $1500 minimum starting bid on the bulls. Only about half the bulls sold. Personally, I don't think that setting a minimum is a good idea. What do you guys that sell bulls think? Or those that buy bulls. Would you go to a sale based on whether or not they have a minimum bid set?

BTW, a minimum bid shouldn't be confused with a floor. We do that with bulls and cows that we take to sales. I've seen auctioneers take a low starting bid and run it up pretty good. But if no one even bids, it's hard for the auctioneer to get started.

I think it would depend upon the genetics. If superior genetics are for sale, I would think all cattle would be sold regardless of the minimum bid. If you have something a buyer wants, money is no objective, especially since there are tons of cash waiting on the sidelines.

Establishing a "floor" is a fine idea, depending on the sale, and the quality of the offering. A minimum bid ties the auctioneer's hands, and he can't get the 'rhythm' necessary for a 'flow' in bidding and the excitement required for a justified effort by the sales crew.

Insofar as their being "...tons of cash waiting on the sidelines...", THAT depends on the available genetics, WHO THE CONTENDING BIDDERS ARE, and - - - the current status of the general economy!

In My Opinion, the day of wild, excessive, "back-scratching" bidding has succumbed to logic, reason, and a bit of different diversification in "advertising" technics. ...at least for the moment!

DOC HARRIS

 

[Frankie]

I have received numerous catalogs with a "minimum" price at the sale for bulls as well as replacements. They sell to the highest bid and those that have no bids at minimum are held and offered at a later date for the same minimum bid.

Interesting. Maybe it's a regional or breed thing, but I don't think I've ever seen a catalog with a minimum bid requirement. Yes, these folks can hold over the bulls and sell them in the spring, maybe for more money. But it will cost them something.

I think those days are over and some of the greedy will be gone, when we (producers) are among the few in the last 10 years that have not only NOT gotten a cost of living increase, but have had to actually take a cut in pay I think sellers will have to be happy to even get the minimum bid..

I don't think greed has anything to do with it. These are good people. I guess they just believe every bull in the sale was worth $1500.

 

[cfpinz]

I don't think greed has anything to do with it. These are good people. I guess they just believe every bull in the sale was worth $1500.

I'd wager it's based more on cost of development. Most minimum bids around here are $1200. I think more bulls would be sold using the floor method allowing auctioneers to start below the floor as opposed to establishing a minimum bid.

 

[SRBeef]

I don't think greed has anything to do with it. These are good people. I guess they just believe every bull in the sale was worth $1500.

I'd wager it's based more on cost of development. Most minimum bids around here are $1200. I think more bulls would be sold using the floor method allowing auctioneers to start below the floor as opposed to establishing a minimum bid.

Unless I am missing something, isn't a "floor" the same as a "minimum bid"?

If an actioneer can start bidding under the "floor" but the seller will not accept any selling price under the "floor", doesn't the floor really become a minimum bid that can actually purchase the animal? Why would I place a bid under the floor price if I know I can not buy the animal for that - might just as well start at a minimum bid that could buy the animal?

 

[DFF]

I have received numerous catalogs with a "minimum" price at the sale for bulls as well as replacements. They sell to the highest bid and those that have no bids at minimum are held and offered at a later date for the same minimum bid.

Interesting. Maybe it's a regional or breed thing, but I don't think I've ever seen a catalog with a minimum bid requirement. Yes, these folks can hold over the bulls and sell them in the spring, maybe for more money. But it will cost them something.

I think those days are over and some of the greedy will be gone, when we (producers) are among the few in the last 10 years that have not only NOT gotten a cost of living increase, but have had to actually take a cut in pay I think sellers will have to be happy to even get the minimum bid..

I don't think greed has anything to do with it. These are good people. I guess they just believe every bull in the sale was worth $1500.

I personally dont think greed is a factor @ $1500, Any bull worth putting your name on has got to be worth this, Just think back what the calf was worth at weaning if steered, and we all know what it takes to get a bull growed and then prepared for a sale.

 

[Keren]

Stupid q here ...

What do you all mean by a 'floor' and a 'minimum' and how do these relate to the reserve?

I got a bit lost in this thread, its interesting though.

 

[dun]

Stupid q here ...

What do you all mean by a 'floor' and a 'minimum' and how do these relate to the reserve?

I got a bit lost in this thread, its interesting though.

The only difference is that a minimum bid or a floor is where the bidding starts. But they all equate to the same thing, the least that will be accepted.

 

[novatech]

If an auctioneer can start bidding under the "floor" but the seller will not accept any selling price under the "floor", doesn't the floor really become a minimum bid that can actually purchase the animal? Why would I place a bid under the floor price if I know I can not buy the animal for that - might just as well start at a minimum bid that could buy the animal?

With a floor usually no one knows where the minimum is. So the auctioneer can start low, get people bidding and try and work up past the floor. If it does not reach the floor/minimum the auctioneer may announce no sale or may give a fictitious buyer number.
With a minimum bid everyone knows where the starting point is.
I have seen auctioneers start an animal high, or about what the animal should bring, and receive no bid. They then drop the starting bid to what ever someone will start at. Once bidding starts the price will often go above the auctioneers original starting price.
This is probably some sort of mental thing. The auctioneers starting price sets a value up for the buyers. Anything below that is a steel. Once the bidding is in motion it almost becomes a competition between buyers.

 

[Frankie]

Stupid q here ...

What do you all mean by a 'floor' and a 'minimum' and how do these relate to the reserve?

I got a bit lost in this thread, its interesting though.

Not a stupid question at all.

I guess the main difference is that the "minimum bid" is known by everyone, but the "floor" bid is usually between the buyer and the auctioneer.

When we take an animal to a consignment sale, we figure what it would be worth to us to haul it back home and we give that figure to the auctioneer as a "floor" or the least we'll accept for her.

With the "floor", the auctioneer can start the animal where he wants and let the bidding go where it may. If buyers aren't willing to pay as much as we want for the animal, the auctioneer may announce she was "sold" to a fake bidder or just pass her own through the ring. (Different auctioneers handle this in different ways.) And it's not that unusual after sales to see owners trying to track down that last bidder on his cattle, even if the bid was below the floor. You gotta be realistic with "floors."

At this sale, the "mimimum bid" was established in the catalog as being where the bidding would start on the bulls.

IMO, with the "minimum bid, you tie the auctioneer's hands because he won't accept a bid below the minimum amount. But this was the first sale at this ranch; it was probably a learning experience. They're already planning next year's sale.

 

[hillsdown]

12- 15 hundred dollars as a starting price is not greedy for a good bull and that was not what I was referring to.

I have seen this last year many minimum bids starting at 2500-3000 for a bull and from the epd's and pics they were not that exceptional ,and cross bred yearling heifers with minimum bid starting at 1500..

Greed comes in when they get no minimum bids and the animal does not sell. A commercial cattleman that lives close to us went to such a sale and everything was over priced and about 35% did not sell. He contacted them afterwards on a "lot" that did not sell and they would not even negotiate the minimum bid price. That is greed, and we are only talking about a 10% decrease on price. The day of a 5000 dollar bull for a commercial cattle man in this country are few and far between when the calves whether they weigh 1000lbs or 500lbs are going for around the 1 dollar mark.

 

[alexfarms]

We went to a bull sale today (not an Angus sale). They had set a $1500 minimum starting bid on the bulls. Only about half the bulls sold. Personally, I don't think that setting a minimum is a good idea. What do you guys that sell bulls think? Or those that buy bulls. Would you go to a sale based on whether or not they have a minimum bid set?

BTW, a minimum bid shouldn't be confused with a floor. We do that with bulls and cows that we take to sales. I've seen auctioneers take a low starting bid and run it up pretty good. But if no one even bids, it's hard for the auctioneer to get started.

Frankie,
I would say minimum bid is the most honest way to go and anything that won't bring a minimum bid should go to slaughter.
John