Selling Calves on a Slide

[GRTiger85]

when you the see the superior sells on rfd, and they sell the calves on a slide, when does the buyer actually pay. Is he paying after the calves are weighed and loaded on the trucks, or is he paying the base weight they shot and the price bid and then gettin a rebate if they are off once they are weighed again. Just curious as to how that actually all works out

 

[BC]

Buyer pays after cattle are weighed. Lets use this as an example: You sell a load of steers that you eztimate at 825 lbs for $101 per cwt. with a 4 cent slide. The yearlings actually come in and weigh 849 (24 lbs heavier). You take 24 lbs X $0.04 = $0.96. and subtract that from the $101 and get
$100.04 for your steers.

825 X $1.01 = $833.25

849 X $1.0004 = $849.33

The seller comes out a head by selling with a slide over taking the base weight price. If the cattle weigh up inder the base price, then you get base price X the weight.

 

[Red Bull Breeder]

I would rather be a little lite as a little heavy.

 

[GRTiger85]

so once the calves are weighed, they get the average weight on them and then they factor in the slide?

 

[BC]

I would rather be a little lite as a little heavy.

Think about what you just said. If they are light, you get paid for the base weight of what was actually there. If heavy, you get paid the base price minus the slide, BUT you have more pounds to sell. Look at the example I used in an earlier post.

 

[BC]

so once the calves are weighed, they get the average weight on them and then they factor in the slide?

Yes

 

[somn]

I would rather be a little lite as a little heavy.

Think about what you just said. If they are light, you get paid for the base weight of what was actually there. If heavy, you get paid the base price minus the slide, BUT you have more pounds to sell. Look at the example I used in an earlier post.

$.67 doesn't buy much feed anymore these days.

 

[BC]

I would rather be a little lite as a little heavy.

Think about what you just said. If they are light, you get paid for the base weight of what was actually there. If heavy, you get paid the base price minus the slide, BUT you have more pounds to sell. Look at the example I used in an earlier post.

$.67 doesn't buy much feed anymore these days.

I don't know about Minnesota but our prices are not that low on calves and yearlings unless they are dairy calves. Here is the last market report from our local sale:
Steers
300 down: 1.10 - 1.42
300 - 400: 1.14 - 1.30
400 - 500: 1.02 - 1.15
500 - 600: 0.94 - 1.09
600 - 700: 0.95 - 1.06
700 - 800: 0.92 - 1.03

Heifers
300 down: 1.00 - 1.25
300 - 400: 0.96 - 1.12
400 - 500: 0.90 - 1.08
500 - 600: 0.86 - 1.00
600 - 700: 0.92 - 0.98
700 - 800: 0.90 - 0.98

 

[somn]

I don't know about Minnesota but our prices are not that low on calves and yearlings unless they are dairy calves. Here is the last market report from our local sale:
Steers
300 down: 1.10 - 1.42
300 - 400: 1.14 - 1.30
400 - 500: 1.02 - 1.15
500 - 600: 0.94 - 1.09
600 - 700: 0.95 - 1.06
700 - 800: 0.92 - 1.03

Heifers
300 down: 1.00 - 1.25
300 - 400: 0.96 - 1.12
400 - 500: 0.90 - 1.08
500 - 600: 0.86 - 1.00
600 - 700: 0.92 - 0.98
700 - 800: 0.90 - 0.98

I was just using your numbers that you posted in the example. But regardless $.67 doesn't buy much feed anywhere.

 

[BC]

I don't see where you got $0.67. The heavier calves even with the slide were worth $16.08 more per head. On a truckload of cattle that would be over $950.

 

[somn]

I don't see where you got $0.67. The heavier calves even with the slide were worth $16.08 more per head. On a truckload of cattle that would be over $950.

I'm going to assume you are new to the business of buying and selling cattle but I will try to explain here goes. The seller was paid $16.08 more for 24# more beef.

$16.08 / 24 = $.67

With the current prices for feed the cow calf man has done me the feedlot owner a favor by having heavy calves selling on the slide. I can buy the pounds of cattle cheaper than I can put them on. Now unless the cow calf man has a lower cost of gain than $.67 he has not come out ahead he has lost profit. But every cow calf mans cost of gain is differnet so who knows who really comes out ahead but with your example $.67 is the breakeven number.

 

[BC]

I see where you are coming from, but most 800 lb yearlings in our part of the world are from grass. I was at the sale yesterday, and the heavy cattle were at a premium to the 300 to 400 lbs steers and heifers. You are correct in that the feedlots want big , heavy calves. In my area, cow-calf producers are going to have to learn to be stocker operators too. The calves are going to have to be weaned and kept on grass until they weigh 750 to 800. Most wean their calves in this area at 400 to 600 lbs.

I have cows and calves and also run a few yearlings. I also moonlight as an order buyer on the weekends buying calves for others at the sale barn. My thinking is with the market like it is, the bigger you get them the more dollars in your pocket. I try to not use feed but where I have to. Mostly protein to supplement our warm season grass this time of year and some feed when we first get cattle in and straightened out. Use ryegrass and bermudagrass. Thinking of adding clover to fall mix. I am thinking my cost of gain on grass is less than $0.67. Besides with the slide they will give you a little more on per lb the base weight.

 

[GRTiger85]

so where does the shrink factor in? and what do they mean when they say freight adjustment?....Thanks for the info

 

[BC]

You are paid for the weight minus the shrink. Most time the amount of shrink depends on how the cattle are gathered, if there is a scale on the grounds or do calves have to be hauled to a scale.

Freight adjustment is just that - the seller is giving up some because some of those ranches are pretty far away from the feed yards and are using that to get buyer to bid on their calves

 

[somn]

I also moonlight as an order buyer on the weekends buying calves for others at the sale barn.

And you couldn't figure out where the $.67 per pound was coming from?

 

[GRTiger85]

so once the slide price is calculated and they get the total...then they just take out the shrink at 2% or whatever was agreed upon at the time of purchase. Thanks for helping clear everything up

 

[somn]

Using BC figures from the earlier post shrinking 4% of the weight before the slide will result in a profit of $823.15. Shrinking the dollar amount 4% after the the slide will result in a profit of $815.36. Usually they are shrunk weight not dollars. One time I had a rancher insist on shrinking after the slide so that is what we did.

 

[GRTiger85]

So how do they go about weighing the calves, I know some of the bigger ranches will have scales in their pens, or maybe even have truck scales. But where do the operations without scales take the trucks to weigh the calves on them?

 

[somn]

The nearest grain elevator scale or other public scale capable of a single draft. I hate to split weigh. No telling who will come out ahead on those deals but one thing is certain someone will end up getting screwed and someone will end up smelling like a rose.

 

[BC]

I sold my yearling heifers yesterday that I put together late in December and the first week of sales in January. They averaged weighing 468 lbs and cost $92.67 delivered to the house including all the shots. There was less than 100 lb spread at the beginning.

Spot weighed several head two weeks ago late in the afternoon taking the biggest and a the lightest heifers and some in between. Spread was from 915 to 730 lbs averaging just under 800 on the ones I weighed.

These cattle were being put with two other producers cattle to make a truckload. Base price was $97.50 for 725 lb heifers with a 4 cent slide. Pay weight on my heifers was 768, 43 lbs lbs over the base weight. 725 lbs @$97.50 would be $706.87 per head. My heifers paid on 768 lbs @$95.78 which was $735.59. That is $28.72 more in my pocket than the base weight would have been.

The heifers should have been sold in June, but I had plenty of grass and there weren't any others to ready to go at the time.