Reference Library
To Market, To Market!
by William Holt Jowell
Buying and selling cattle is just
like buying and selling flowers. Or at least I think it is the same.
First you find something pretty that you think someone else will enjoy.
Buy - or grow - the cow (flower). Add your mark up and then go find
someone who wants the cow more than you do. For one reason or another,
the time will come to sell an animal that you have purchased or raised.
If you had the cow in your herd, it was probably because something about
that animal appealed to you. Just because an animal has a good heritage
doesn't mean you should buy it or retain it in your herd. Heritage also
does not mean that you will be able to sell the cow in the future. Something
about that cow appealed to you, and chances are, the same quality will
appeal to someone else. Remember, eye appeal is still the most important
aspect of this business. (Would you buy a wilted flower even if it were
from a champion bush?) Now for whatever reason (drought, lost your lease,
your banker called), it is time to sell your cow. What do you do? If
you have not been advertising and you want to sell in the registered
market, you may have an uphill battle. (And your banker may not want
to wait for you to enroll in Flowers 101.) The vast majority of the
cattle I sell are sold as a result of local advertising. However, one
of the first things I show the new purchaser (always think positively,
don't say "prospective buyer") is one of my advertisements in the Texas
Longhorn Trails. Showing those ads is an immediate confidence builder.
It lets the buyer know that I am definitely in the Longhorn business
and not just a fly-by-night used cow dealer. I also tell him (or her)
that I will do my best to help him market his cattle when their time
comes. It is not unusual for me to repurchase cattle or to purchase
offspring of cattle I have sold. Here again, this let's the buyer know
that I believe in the cattle I am selling him. Always have a current
"price list" with you. My list allows the buyer to connect the ear tag
number to the number on the list. Show the sire, the dam, the birth
date of the animal, due date if any and the price. I will tell the buyer
that some of the prices are "separation prices". Those are cattle that
I really don't want to sell, so the buyer will have to separate that
particular cow from my herd by paying a high price. If the sale involves
more than one head I let them know that I will negotiate on all other
prices. Generally my prices are firm on a single sale. (Just like flowers.
You can buy a dozen roses for less per rose than twelve single roses.)
When you show your cattle, show them all. Let the buyer pick and choose.
He knows if he can afford the price or not. Don't judge that aspect
for him. The only time I attempt to direct someone's thinking is when
he says he wants a bull and a cow. Don't let someone leave your place
with a bull and a cow unless he has ten or more head at home. You will
have a disappointed buyer, and most of all, a disappointed bull. Sell
that buyer two cows and loan him a bull. (Loaning him a bull will be
the thirteenth rose in the dozen.) Be prepared to answer questions about
your cattle in particular and Texas Longhorns in general. The most frequently
asked question by a new breeder is, "Will that calf's horns grow to
be as large as that bull's over there?" Second question is, "Do they
change colors?" And the third most frequently asked question is usually
in the form of a statement, "I always thought Longhorns were wild."
(For those of you in Flowers 101, "Yes " is not an acceptable response.)
How do you arrive at a price? If I bring home a trailer load of cattle
from a sale I will calculate a percentage of desired profit on each
cow plus my expenses per head. As time passes, this price may change
up or down. The direction of change is related to behavior, offspring,
sale of offspring, who the cow is bred to, a new tax year and the standard
reasons - drought, lost the lease or the banker called. For example,
let's say you buy ten head ranging in price from $600 to $1800 and they
average $975. You can sell the $1800 cow for $975 and not lose money
on the ten head as long as you can improve the $600 cow up to $975.
(I didn't say do this. I said "you could do this.") The point is this:
think in averages. Don't think that you can never sell an $1800 cow
for less than you paid for her. Also, if you purchased the $1800 cow
in November, then on January 1st you can sell the cow for your basis
and still break even. Also on January 1st, your 10 cow herd average
basis is less. Or better said, at the $975 average selling price, you
are now in a profit position rather than a break even. (I know the cost
of hay is not included, but save that for a future article.) In the
meantime, check with your accountant. How do you arrive at a price for
a young heifer that you have raised? Tough question! If it's a plain,
solid colored heifer with average genetics, then you probably should
stay close to the current market price at the sale barn. However you
are justified in charging a premium because our Texas Longhorns usually
receive preferential treatment. Consequently they are going to be of
better quality than the average sale barn cattle. On the other hand,
if the heifer is a flashy paint, showing great horn growth, and is nibbling
on the handkerchief in your back pocket, then the sky is the limit.
At the LOW end would be two times market. Twenty five hundred is not
unusual and there is no upper limit. Again, don't forget the package
deal. If the buyer buys seven or eight lower priced heifers, then you
can afford to back way off the $2500. And what have you lost? Nothing!
You have gained a profit, a friend, a customer for the future and a
place to store a bull. Finally, remember that as a successful marketer,
you don't just pat your billfold and smile as you watch a trailerload
of your cattle go off to someone else's pasture. Keep in touch with
that buyer. A simple phone call or note every now and then will let
him know you care about your customers. And when he needs some more
cattle or a new bull, who's he going to think of first? The one who
expressed an interest in him and his breeding program - you! Have fun
selling for a profit! I'll see you down the trail or in the rose garden!
Long-time cattleman, "Longhorn" Bill Jowell, owner of Rafter L Longhorns
at Midland, Texas, finds Texas Longhorn cattle enjoyable AND profitable.
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Texas Longhorn" Trails December 1991
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