Who are these Big Buyers and where do the cattle go?

[TexasRancher]

After attending a few cattle sales barns in my area Decatur and West, Texas...I enjoyed seeing how fast and efficient the cattle are run through...but I found myself staring up in the audience of buyers that you couldn't even see their heads nod, their eyes wink or fingers move off their jeans....I only caught a few of the bid motions on these big buyers while my wife kept in my ear about not staring. I had to stare, I wanted to understand what was going on...the action was happening up in the seats not on the floor. My wife did not understand that. I reasoned the auctioneer must have known these buyers well. Ok..but here's my question where I'm lost. Who are these big buyers, that spend 10 to 16 hours a day bidding and haul hundreds of cattle each week...where do they put all the cattle?
1. Walk me through a few senarios...ARE these big buyers actually the same ones that climb into their truck cabs to haul them after they write their checks out...or do they have teams working the bidding and transporting/delivering?
2. Why don't all the big bidders....since they all know each other (small tight world)...they could form a buying/sharing specific cattle pact...and bid 80 cents to $1.30 instead of $1.80 to $2.40? Can this happen? What prevents it? I did not see many small cattle buyers at these auctions (to prevent low-balling)...most were just big buyers.
3. I heard in West, Texas cattle auction it's a way-station to Mexico where most are going to Mexico? Can that be true, you'd only need one bidder to take them all to Mexico unless there were 4 or 5 destinations in Mexico? Where do the cattle go in Decatur? Nominally 1,400. to 2,500 head of cattle are sold each week in all these sale barns across all of United States. Are there a few big processing/packing-kill plants or a few big feeder lots where all cattle end up? Are these big buyers (bidders) working just for meat processors or feed lots? Where do all the nicer weened heifer and bull calves end up?...in feed lots too? Who's paying these big buyers, who do they work for? Who is transporting hundeds of cattle? Where are the cattle going % wise to what places?

 

[bird dog]

A lot of the calves go to accumulators like Capitol or Chilton. They have buyers at all of the larger sale barns and have route trucks that pick them up after the sale and take them to a central location where they are grouped into like kind calves in truck load lots. These are then sold to buyers ranging from feed lots for the bigger calves to grazers on the smaller ones.
Look at Capitol Livestock's web page and you can see how it works. They buy six to ten loads every day and usually have them sold and back on the road late that night.

Some of the buyers bring a trailer for the few that they buy for themselves to resell but most go out on big trucks. At West and Decatur a lot of the horned cows are sold to the suppliers for Mexican rodeo events.

Packer cows work the same except they usually don't go to another yard. The packing plant will send a truck to the sale barn and that trucck may have two or three stops before heading to the packing plant. There are many other scenarios depending on the time of year. When wheat starts coming up . there is a big demand for calves for that. The same with springtime grazing.

There is a place close to me that buys around 2000 calves from the sale barns in the fall and runs them on wheat until the following June.

The West barn as a rest stop is usually meant for breeding bulls and high quality registered type cows going South. Its a place to unload, to let the cattle (and the driver) rest and water up.

 

[jltrent]

Here is were most go eventually.

The Largest Meatpacking Plants in the U.S. - IndustrySelect®

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www.industryselect.com

 

[Dave]

It will vary a lot around the country. Here there are 4 big feedlot companies which all own multiple feedlots. The company gives the buyers a ticket for X amount of head of this size or sex and price. This is the price to pay. The buyers work on a commission. A certain dollars per head or on a percentage. The more numbers they buy the more money they make. So why let the other guy have any more than you have to? The cattle get hauled by semi trucks not by the buyer. The sale yard sends a fax to the company with purchase details. The company sends a check or a wire transfer to pay for the cattle. Once the cattle are finished they are shipped to one of the two packing plants in this part of the world.

In this area it is noticeable that the big feedlots are close to the big potato processioning plant and the other vegetable plants. This is so the waste from those plants get fed to the cattle. There is a lot of that in the Treasure Valley in Idaho (you might have heard of Idaho potatoes). The two packing plants in Washington. Tyson at Pasco WA an Washington Beef at Toppenish WA. The result is a nearly constant flow of cattle pots full of fats headed west on the freeway every day.

 

[Lucky]

If you think a local barn runs through allot of cattle you need to watch the Monday sale at OKC. You can watch it on video and it takes most of the day. We sold there last week and it was a smaller feeder sale with only 6500 hd or so.

The cattle sold over 850# are most likely going to feedlots, everything else is grouped by weight and going to buyers running yearling operations. Around here yearling guy will run anywhere from 500-10,000 hd.
The guys buying these cattle don't have time to sit in a salebarn buying cattle so get order buyers to do it.

On the cow side most larger operators have a guy buying cows for them every week. They have a good relationship with the buyer so he knows what they want. I've never bought a cow from a salebarn myself. We call a local guy that hits 3-4 barns a week and he charges $10 a head to buy us cows. I'm not sitting at a salebarn all day to save $10 a head.

You do realize that allot of cattle sold at local barns are sold on video now too? The guy buying at the sale you were at might have been on vacation in Mexico bidding on cattle at West,Tx.

Look up National Livestock and see the amount of feeder cattle those guys run around the country. They have a really good finance program for yearling operators too.

 

[SBMF 2015]

What you see or don't see during the auction is only part of the story. There are buyers who will bid against each other all day and then work together after the sale.
I can't guess how many times I've seen 2 or 3 buyers after a sale, each with a handful of cards. Buyer A got 35 hd of 6wt hfrs bought but that wouldn't fill out a pot. Buyer B only got 11 hd of 6wt hfrs bought. That isn't enough for his order so he gives that card to buyer A. They'll trade cards back and forth until they get their loads filled out the best they can. Then they'll go settle up in the office.

I've seen guys bid with a flick of a toe on their boot, holding up a cigarette, just looking at the auctioneer, or have some else bid for them ( then you really get confused)

 

[Caustic Burno]

After attending a few cattle sales barns in my area Decatur and West, Texas...I enjoyed seeing how fast and efficient the cattle are run through...but I found myself staring up in the audience of buyers that you couldn't even see their heads nod, their eyes wink or fingers move off their jeans....I only caught a few of the bid motions on these big buyers while my wife kept in my ear about not staring. I had to stare, I wanted to understand what was going on...the action was happening up in the seats not on the floor. My wife did not understand that. I reasoned the auctioneer must have known these buyers well. Ok..but here's my question where I'm lost. Who are these big buyers, that spend 10 to 16 hours a day bidding and haul hundreds of cattle each week...where do they put all the cattle?
1. Walk me through a few senarios...ARE these big buyers actually the same ones that climb into their truck cabs to haul them after they write their checks out...or do they have teams working the bidding and transporting/delivering?
2. Why don't all the big bidders....since they all know each other (small tight world)...they could form a buying/sharing specific cattle pact...and bid 80 cents to $1.30 instead of $1.80 to $2.40? Can this happen? What prevents it? I did not see many small cattle buyers at these auctions (to prevent low-balling)...most were just big buyers.
3. I heard in West, Texas cattle auction it's a way-station to Mexico where most are going to Mexico? Can that be true, you'd only need one bidder to take them all to Mexico unless there were 4 or 5 destinations in Mexico? Where do the cattle go in Decatur? Nominally 1,400. to 2,500 head of cattle are sold each week in all these sale barns across all of United States. Are there a few big processing/packing-kill plants or a few big feeder lots where all cattle end up? Are these big buyers (bidders) working just for meat processors or feed lots? Where do all the nicer weened heifer and bull calves end up?...in feed lots too? Who's paying these big buyers, who do they work for? Who is transporting hundeds of cattle? Where are the cattle going % wise to what places?

Lot go to Hereford Texas as feeders

 

[wbvs58]

If it is like here what goes through the saleyards is just the tip of the iceberg. Most of the big lots of quality young cattle are picked up by the buyers for feedlots or backgrounders straight from the farm. They know who have the quality cattle and will usually pay a bit more for them. It also saves the cattle from a stressfull trip through the yards.

Ken

 

[Lucky]

If it is like here what goes through the saleyards is just the tip of the iceberg. Most of the big lots of quality young cattle are picked up by the buyers for feedlots or backgrounders straight from the farm. They know who have the quality cattle and will usually pay a bit more for them. It also saves the cattle from a stressfull trip through the yards.

Ken

Supiorior sells a ton of cattle on video directly from the ranch. It's a great deal for the buyer and the operator but you have to have your stuff together for it to work for you.

 

[Dave]

I have sold through Superior a couple of times. If you have enough even cattle to make a pot load it most certainly worked real good. My closest neighbor and family has sold that way for 20+ years.

 

[crossbreed]

After attending a few cattle sales barns in my area Decatur and West, Texas...I enjoyed seeing how fast and efficient the cattle are run through...but I found myself staring up in the audience of buyers that you couldn't even see their heads nod, their eyes wink or fingers move off their jeans....I only caught a few of the bid motions on these big buyers while my wife kept in my ear about not staring. I had to stare, I wanted to understand what was going on...the action was happening up in the seats not on the floor. My wife did not understand that. I reasoned the auctioneer must have known these buyers well. Ok..but here's my question where I'm lost. Who are these big buyers, that spend 10 to 16 hours a day bidding and haul hundreds of cattle each week...where do they put all the cattle?
1. Walk me through a few senarios...ARE these big buyers actually the same ones that climb into their truck cabs to haul them after they write their checks out...or do they have teams working the bidding and transporting/delivering?
2. Why don't all the big bidders....since they all know each other (small tight world)...they could form a buying/sharing specific cattle pact...and bid 80 cents to $1.30 instead of $1.80 to $2.40? Can this happen? What prevents it? I did not see many small cattle buyers at these auctions (to prevent low-balling)...most were just big buyers.
3. I heard in West, Texas cattle auction it's a way-station to Mexico where most are going to Mexico? Can that be true, you'd only need one bidder to take them all to Mexico unless there were 4 or 5 destinations in Mexico? Where do the cattle go in Decatur? Nominally 1,400. to 2,500 head of cattle are sold each week in all these sale barns across all of United States. Are there a few big processing/packing-kill plants or a few big feeder lots where all cattle end up? Are these big buyers (bidders) working just for meat processors or feed lots? Where do all the nicer weened heifer and bull calves end up?...in feed lots too? Who's paying these big buyers, who do they work for? Who is transporting hundeds of cattle? Where are the cattle going % wise to what places?

After attending a few cattle sales barns in my area Decatur and West, Texas...I enjoyed seeing how fast and efficient the cattle are run through...but I found myself staring up in the audience of buyers that you couldn't even see their heads nod, their eyes wink or fingers move off their jeans....I only caught a few of the bid motions on these big buyers while my wife kept in my ear about not staring. I had to stare, I wanted to understand what was going on...the action was happening up in the seats not on the floor. My wife did not understand that. I reasoned the auctioneer must have known these buyers well. Ok..but here's my question where I'm lost. Who are these big buyers, that spend 10 to 16 hours a day bidding and haul hundreds of cattle each week...where do they put all the cattle?
1. Walk me through a few senarios...ARE these big buyers actually the same ones that climb into their truck cabs to haul them after they write their checks out...or do they have teams working the bidding and transporting/delivering?
2. Why don't all the big bidders....since they all know each other (small tight world)...they could form a buying/sharing specific cattle pact...and bid 80 cents to $1.30 instead of $1.80 to $2.40? Can this happen? What prevents it? I did not see many small cattle buyers at these auctions (to prevent low-balling)...most were just big buyers.
3. I heard in West, Texas cattle auction it's a way-station to Mexico where most are going to Mexico? Can that be true, you'd only need one bidder to take them all to Mexico unless there were 4 or 5 destinations in Mexico? Where do the cattle go in Decatur? Nominally 1,400. to 2,500 head of cattle are sold each week in all these sale barns across all of United States. Are there a few big processing/packing-kill plants or a few big feeder lots where all cattle end up? Are these big buyers (bidders) working just for meat processors or feed lots? Where do all the nicer weened heifer and bull calves end up?...in feed lots too? Who's paying these big buyers, who do they work for? Who is transporting hundeds of cattle? Where are the cattle going % wise to what places?

If you go back to Decatur and watch again IMO you will likely see the sale barn workers have a lot of influence on the sales. They haul for locals, buy for locals and even go work calves during the week while still being employed by the barn. In Gainesville I'm told the barn itself buys a lot themselves and they go quick. A man I know is a broker of sorts in OKC who works with other brokers to arrange shipping to OKC, pairs up like animals and gets the top dollars while charging a commission. This sounds like the best way if the commission doesn't eat up your profit. I used to enjoy going to Bowie tx sale barn to watch and have a burger. More laid back, no idea if you came out better

 

[Lucky]

Another way some of the Salebarn Owners and bigger operators make money around here is by selling other peoples calves in load lots directly out of the pasture. A friend of ours sold 4 truck loads through a big time yearling man here to a big operator in Kansas last year. They looked at his calves and offered him a price. He took the price and the man that sold them made a penny a pound extra. The buyer setup and paid shipping. A penny doesn't sound like allot but the guy made a couple grand for a few phone calls and two trips to look at calves.

 

[TexasRancher]

It will vary a lot around the country. Here there are 4 big feedlot companies which all own multiple feedlots. The company gives the buyers a ticket for X amount of head of this size or sex and price. This is the price to pay. The buyers work on a commission. A certain dollars per head or on a percentage. The more numbers they buy the more money they make. So why let the other guy have any more than you have to? The cattle get hauled by semi trucks not by the buyer. The sale yard sends a fax to the company with purchase details. The company sends a check or a wire transfer to pay for the cattle. Once the cattle are finished they are shipped to one of the two packing plants in this part of the world.

In this area it is noticeable that the big feedlots are close to the big potato processioning plant and the other vegetable plants. This is so the waste from those plants get fed to the cattle. There is a lot of that in the Treasure Valley in Idaho (you might have heard of Idaho potatoes). The two packing plants in Washington. Tyson at Pasco WA an Washington Beef at Toppenish WA. The result is a nearly constant flow of cattle pots full of fats headed west on the freeway every day.

Thanks Dave, that seals up two or three of my questions I had. I couldn't believe the big buyers (cowboys) we're working solo, cutting checks and climbing into their semi-truck afterwards. The way you explained it commissioned sales makes sense now..and competititon between buyers makes sense now....as they're all trying to fill their quotas with pricing in hand.

 

[TexasRancher]

What you see or don't see during the auction is only part of the story. There are buyers who will bid against each other all day and then work together after the sale.
I can't guess how many times I've seen 2 or 3 buyers after a sale, each with a handful of cards. Buyer A got 35 hd of 6wt hfrs bought but that wouldn't fill out a pot. Buyer B only got 11 hd of 6wt hfrs bought. That isn't enough for his order so he gives that card to buyer A. They'll trade cards back and forth until they get their loads filled out the best they can. Then they'll go settle up in the office.

I've seen guys bid with a flick of a toe on their boot, holding up a cigarette, just looking at the auctioneer, or have some else bid for them ( then you really get confused)

Wow!..now that i can see and makes total sense to me...trading cards with buddy-pro-cash incentives if the card exchange doesn't pan out equally.

 

[Dave]

Thanks Dave, that seals up two or three of my questions I had. I couldn't believe the big buyers (cowboys) we're working solo, cutting checks and climbing into their semi-truck afterwards. The way you explained it commissioned sales makes sense now..and competititon between buyers makes sense now....as they're all trying to fill their quotas with pricing in hand.

I was at a sale one time and the owner of a medium size feedlot was buying everything. None of the other buyers were getting anything bought. He had probably bought close to a thousand head. One of the buyers spoke up and asked "Aren't you out of trucks yet?" He replied I have lots more trucks. I heard later that he bought around 1,500 head that day. Apparently he empty pens to fill and plenty of cheap feed.