Maybe it because it’s Friday the 13, or maybe it’s because I just like stirring things up, but recently when I was reviewing the sale list from some of the major sales, I found myself asking, “Did she really sell?”
As I look at the buyers list I see that there were many lots that were bought either by sales management or by the close friends of the person selling the animal. While I understand in some cases, such as Rocky Mountain Holsteins, for example, that the teams putting on the sale are also typical buyers as well, I also notice cases where I see that lots sold to a close friend of the consignor or neighbor of the consignor and I ask myself did she really sell?
It has been my finding in the past that these types of sales, typically, do not result in any form of actual sale. Ya sure you may see the new name on the pedigree for a little while, but give it about a year or so and that animal is back in the sole ownership of the breeder who was selling that animal.
I can understand that the breeder does not want to let their animal sell for less than they feel they are worth. However, the question begs to be asked, is she really worth what they think she is? On the other hand, are they just looking for the marketing aspect of having one of their animals on the top sellers’ list?
Creating a False Market
There is a certain aspect to having your animal appear on the top sellers list at a major sale. Often time perception is reality. Therefore, if breeders see family members from a certain family consistently selling well, they assume it’s a very marketable family and then want to get in on that family to cash in on the popularity. The problem is that popularity never existed and the person buying in never makes any money. Neither does the original seller really. Since they have to pay the commission to the original sales management team for the commission on the animal that never really sold.
Don’t believe your own hype
For most dairy breeders, nothing compares to seeing the fruits of your hard work. You tend to see each as though it was one of your children. Well not quite, but pretty close. You have put so much hard work into it that you want to see the reward for all that work. Many times that comes in one of two ways: awards and/or revenue. Moreover, while awards are nice, they don’t pay the bills. Therefore, you do not want to let those animals go for less than you feel your time and effort is worth.
The problem is many breeders start getting a false sense of what their animals are worth. You see other animals selling for big dollars, and you think, “Hey my heifer is at least as good as that heifer, if not better”. Since you don’t want to be shortchanged on your sale price you “protect” her by having a friend or neighbor run up the sale price to what you believe is the minimally acceptable price. The problem is that no one else in the market feels that she is worth that, so all that you have really done is increased the size of the commission check you are going to pay to sales management.
There’s a fix in the works
I cannot tell you the number of times that I could tell you who and at what price an animal would sell for, before the sale even started. The reason I can’t tell you is because it’s against most terms and conditions of the sale agreement. Animals being offered at public auction are to be sold in an open and equally available manner. Often times, high valued animals are going through the sale ring for the marketability and the hype. Yes, they are being sold to a new buyer, but the deal has already been worked out before the heifer ever enters the sale ring.
Can I say it’s wrong. Not really, because it is a mutually agreed upon sale price, and if someone else wanted to pay more than that price they could. The challenge is that this was more of a private treaty sale than a public offering. However, I guess everyone wins, sales management gets a sale topper, the seller gets the sale price they are looking for, and the buyer pays a price they agreed upon and gets the added promotion on the animal.
The Bullvine Bottom Line
If you are going to sell an animal at public auction, be willing to sell her. Don’t put her (or in many cases now him) in the sale if you are not willing to sell. Yes, I understand the marketing aspects, but in the end, you are only hurting yourself and the industry. Those who have been to enough of these sales know what breeders are actually willing to let their top animal go, and those who only have the animal in the sale for the hype. Next time you are at one of these top sales, look to see who is bidding on these animals. Is it the people who buy all the time? Is it a breeder who you know is looking to add a new cow family? On the other hand, is it the neighbor or best friend of the person selling the animal? When the latter is the case, I have made it a point to stop bidding that instant. No matter what the price.
What has your experience been? Please share in comments box below.
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