The Moos Room™

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Dr. Joe Armstrong: What's up, everybody? This is Dr. Joe Armstrong. This is a windshield episode. I am by myself this week driving all over the state in the cold weather, but need to get an episode out, need to connect with you guys. We're going to talk about something that I've been thinking about for a while and it's really because people like Emily and people like Jason Medows at Ag State of Mind and Kevin Ditzel down in Iowa, just talking with them has made me think about things in a completely different way. We've also completed some work recently that has to do with how cattle are marketed and moved within the state of Minnesota.
Those results will be coming out soon, collaboration project with the Minnesota Beef Council but one of the things that came out of that project was that auction markets are still a huge part of the Minnesota beef industry. While not everyone sells all their calves through an auction market, a big piece of Minnesota producers still do that. I would argue that almost everyone, every cattle operation in Minnesota uses an auction market in some way. Cold cows have to go somewhere and it's hard to beat the convenience of an auction market. Let's get through all the things that I think about with an auction market right away and what we talk about in school when I was in veterinary school, what I've always thought about in practice as well.
In school, we talk about auction markets and it's almost exclusively about health risks and what it means to the cattle in terms of health when they're coming from an auction market. Traditionally, when we think about an auction market, we think about co-mingling, a huge biosecurity risk, high-risk cattle in terms of health because of long-distance travel and shrink and stress, mixing a bunch of groups into new groups from all these different sources. That's what we think about right away when we think about auction markets. That's where my brain has always been.
We want to avoid getting cattle from auction markets because of the risk to health. Knowing now, listening to everybody around me, looking at the survey that we just did, trying to think about things in a different way, I think that's a really unfair light to put on auction markets. I think all those things are true, and I haven't changed that view that if I had my option for health when it came to cattle, I probably wouldn't get cattle from an auction market, but there's reasons that we should have auction markets and there's undeniable benefits of having auction markets in our state.
Now, I want to make it really, really clear. You can get really, really good cattle from the auction market. I'm not saying that that doesn't happen. It happens all the time. Great, great cattle move through the auction market. I'm just saying that if I had the option with the same quality cattle, I'd rather get them directly from the farm when it came to health. That's not always possible and that's not how people in Minnesota especially sell their animals. I'm not saying that you can't get great cattle from auction markets because you definitely can. The auction markets in our state work very, very hard to make sure that they're selling as good a stock as they can. They're limited by what is available in the market and what comes to them, but you can get excellent cattle from the auction market. Don't think that I'm saying that you can't.
What are some of the good things about auction markets? Well, I think financially there's a lot of good things. Yes, there's a commission associated with sale, but the convenience is an absolute no-brainer sometimes. The amount of time you save from selling cattle through an auction market can be massive. There's some travel involved. If you want to be in there on sale day, like if you're selling cows, I think it's a good idea to be there on sale day so people can see you, shake your hand, know who you are, build your reputation.
If you're selling cold cows, if you're selling cold bulls, if you're doing something like that and all you got to do is drop them off and then forget about it, that convenience, that time saved doing that is amazing. Convenience is one of these big things that we talk about with auction markets and it's a huge, huge plus in the [unintelligible 00:04:31].
What else is good about an auction market? Well, the money side is a big deal. It's a reliable payment. You know that you're going to get paid when you drop those cattle off and they sell. You might not have control of the price too much, but at least you have an idea of what they're going to bring because the price discovery is there from that auction market.
We can see how cattle have sold historically and make a prediction on what we think is going to happen. When those cattle do sell, you get a prompt payment. There's no question about that, you're going to get paid. That reliability in that sense is a huge, huge benefit as well. There's one big thing that I think it's hard to describe and I'm going to try and it's a good thing about auction markets. I think it's something that's becoming more and more rare in our world, especially in the agricultural world as we move to virtual and we have all this connectivity online and the world is being more connected in a social media way and in a non-in-person way really.
There are benefits to the auction market that are completely intangible. I think it's something that we don't think about very often. Like I said, there's people in my life that have made me think about things that I never would've otherwise. Emily being first and foremost among them. When we talk about auction markets, they're one of the last gathering places for cattlemen that are available. We have in-person meetings, extension ties to put on in-person meetings as well but auction markets are a reliable place to gather. It's a social event to be at the auction market and I felt that when I was in practice.
We covered two auction markets when I was in practice, I spent time in auction markets out west. I've worked in auction markets in Montana, and there is a huge social piece to these auction markets that is completely intangible. You can't put a price on it and it's hard to quantify the benefit that it provides the community and the cattle community in general. The auction market provides jobs for people in the community. It provides this gathering place. I'm talking about the social aspect to it.
There's always a cafe at an auction market, almost always. That place is full of life. When you walk into that cafe, it doesn't matter what auction market it's attached to, it's full of life. Everyone in there knows each other. They're having a cup of coffee, handshake and slapping backs, laughing. It's a wonderful place and that piece is something we don't talk about enough. That social place, that ability to gather and to just go there without really knowing who's going to be there and know that you're probably going to be welcomed with open arms and you're going to find somebody that you can joke with and connect with on an individual level.
That's something we don't talk about enough when it comes to auction markets. It's something that we can't quantify and it's probably why we don't talk about it, but it's a benefit to mental health. It's a huge benefit to these communities that have an auction market. The sense of comradery in a place like that is wonderful. We're trying to make money at these places. At some point when you do enter the auction ring and you're throwing bids and you're bidding against each other, there's some friendly competition to that. There's more serious competition to that but that is important.
I have rarely ever seen friendships or relationships get ruined in the auction ring and in the bidding. It's part of the vibrancy of these places to hear that auctioneer going, to hear these bids coming in, hearing those spotters looking at bids and calling them out. It's an environment that is truly old world and it's something that we don't have enough of.
Completely intangible, I'm completely on my soapbox and you're probably tired of me talking about my love for auction markets. While we do have health concerns for the cattle coming out of there sometimes, the benefits that you see in convenience, reliability of payment, having this place to gather, to be social, where cattlemen can come together, exchange ideas, look at the world, talk about something completely unrelated to cattle and get that boost, that pick me up that helps their mental health. That stuff is all a big piece of auction markets as well as they become staples in the community.
Something that we should talk about more, something that we can't quantify but is definitely something that we benefit from. Hopefully, if you haven't been to an auction market or you don't spend much time there, you're encouraged to do that. The people there will welcome you with open arms and you can learn so much at these places. I've learned so much at these places, all sorts of things coming to the auction market, good, bad, ugly, all different other things. It's a wonderful place and there's things there you can learn that you won't learn anywhere else.
Hopefully, you're thinking about auction markets a little differently after this monologue. To me, they're magical places where there's a lot of intangible things, unquantifiable things that benefit the industry, benefit the community. They serve a very vital function in Minnesota and how cattle move and how cattle are marketed and how the cattle industry stays connected. I think they need to stay at the center of Minnesota's beef industry, and as we talk more and more about this goal of price discovery, I think auction markets play a huge role on that. Visit your auction markets. Support your local auction market, walk in, feel that camaraderie and you know what I'm talking about.
All right, I think that's plenty for today. I'll get down off my soap box. If you guys have comments, questions, scathing rebuttals to this week's episode, please send them to themoosroom@umn.edu. That's T-H-E-M-O-O-S-R-O-O-M at U-M-N dot E-D-U. If you have a question for us and you'd like us to play it on the podcast and answer it after hearing it for the first time live, please call 612-624-3610. That's 612-624-3610. Leave us a message. I'll get it edited into the podcast and we'll answer it for you as best we can. If we don't know the answer, we'll tell you that and we'll get back to you the following episode. Thank you everybody for listening. We'll catch you next week.
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