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About This Newsletter • Factors Affecting the Selling Price of Purebred Bulls • Marketing a Purebred Bull • American Breeds Coalition to Hold Arkansas Beef Producer Seminar

About This Newsletter

In 2006 the University of Arkansas Cooperative Extension Service and the Arkansas Beef Council conducted an audit of the Arkansas beef industry. Some of you may have even taken part in filling out the survey. One of the questions asked on the survey was about the way you prefer to receive educational material. The most popular choice, as indicated on the survey, was a printed newsletter. Another factor in the development of this newsletter as finding a way for Extension to fill the needs of purebred producers in the state of Arkansas. This newsletter is the first step in addressing the educational needs of the purebred producers in the state. Please be aware that Extension is here to support your needs, and if there is a topic you would like to see discussed in this newsletter, please feel free to contact me (bbarham@uaex.edu or 501-671-2162).

I am collecting data that will help me determine what factors affect the selling price of purebred bulls in Arkansas. I need your help in this process.

If you have bulls for sale or have recently sold bulls, I would like to visit with you. I will be looking for the following information for each bull sold:

• Breed of bull
• Bull registration number
• Color and horn status
• Selling price
• Method of marketing (private treaty or auction) If auction I would like a copy of the catalog.
• Was the buyer from Arkansas?

What type of information was presented to the buyer?

• EPDs
• Ultrasound results
• Genetic marker results
• Breeding Soundness Exam
• Etc. (Other)

With this information, I plan to determine what each of these factors is worth to potential buyers. For example, if you have ultrasound information collected, does that increase the value of your bulls?

All information will be kept confidential and will only be released in a summarized form. If you have data you would like to share with me, please contact me at 501-671-2162 or bbarham@uaex.edu.

Spring is one of the busier times of year when it comes to marketing bulls. In this issue, I have decided to address one of the more common

questions that I get – How can I better market my bulls? That is a complicated question. So let’s look at the components that make up a marketing

program. The simplest way to look at this is by method of sale; i.e., by private treaty, through your own auction, through a group auction or through a bull test and auction. Each of these methods has its own benefits and limitations.

This is one of the most common forms of marketing bulls in Arkansas. This form of marketing involves you and the buyer negotiating a purchase price on a particular animal. The marketing expenses associated with this method are generally lower than for any other method.

One benefit of this method is that it is relatively easy to establish a good relationship with bull buyers. Once this occurs, these buyers will often become repeat customers. One of the limitations of this method is letting people know how many and what type of animals are for sale.

Advertising in newspapers and magazines is a good start, but you may find mixed results with this method of advertising. Generally, word-of-mouth advertising is the most effective form of advertising for private treaty sellers (and the most cost effective). To get good word-of-mouth advertising, you must have good bulls at a good price and provide good customer service. Yes, I said customer service – a person selling bulls is no different than doing business with a local merchant. An unsatisfied customer can severely damage others’ perceptions of your operation, so remember to try to go out of your way to make a customer happy – it will be well worth your time.

Having a large number of bulls available for purchase at one time gene rally draws more potential buyers. Having more buyers creates competition for each animal and may result in a higher selling price than would have been received from a private treaty sale. However, the increase in selling price also comes at a cost – literally. It costs money to place an animal in a sale. You are looking at fees to cover the facility, auctioneer and other labor, advertising and printing and transportation costs to haul your bulls to the sale facility. These costs can quickly eat into any potential increases in selling price.

Each auction assesses fees differently. Some may charge a flat fee for each head sold, while others may charge a percentage of the selling price. Whichever way the fees are set, for each bull you are probably looking at $200 or more in fees to go through an auction.

Many producers ask about the availability of a centralized bull test in Arkansas. Arkansas does not have a centralized bull test program. Many of you might remember the days when there were bull tests conducted in various parts of the state. These programs were discontinued many years ago due to lack of participation and increasing costs to support the program.

There are alternatives available to producers who desire to performance test bulls. First, Extension supports on-farm bull tests with either forage-based or grain-based programs. These programs are supported by your local county agent and staff from the state office. If you are interested in an on-farm bull test program, please contact your local county Extension office to get started.

The second option is to find a private bull test facility. There are several in surrounding states. Most of these test stations will conduct a standard 112-day feed test with a two-day adjustment period prior to the beginning of the test. Most bull test facilities will require the producer to pay an entry fee, feed costs, vet costs and possibly a daily yardage fee. Other fees that a producer might encounter would be for ultrasound measurements and for a Breeding Soundness Exam. After visiting a couple of different test facilities, the costs for the test were reported to be between $400 and $600 per bull. These figures are just for the performance test and do not include the costs associated with the sale. The numbers reported above would apply here as well, so expect about $200 per bull in sale fees.

One other important consideration would be that most bull tests have minimum qualifications to be eligible for the sale, so not all bulls tested are eligible to sell.

The OBI bull test station in Oklahoma reported that for their spring 2007 all breed performance tested sale, 207 head sold for an average of $1,800. If you are doing the math, you may be thinking that this may not be the best way to market your bulls. You may be correct, but keep in mind the bulls that performed well in the tests also sold very well. If you have average quality bulls, this may not be the most cost effective way to market. However, for those of you who raise bulls that do well on the test, the cost and effort would more than pay off. In my mind, the best value that could be gained from a centralized bull test is determining which bulls are the most efficient. With feed costs rising, efficient beef animals may be producers’ only hope in trying to make a profit.

Marketing systems aside, there are a few other tips for increasing the selling price of your bulls. It mainly stems from customer service. Make sure your bulls have had a Breeding Soundness Exam completed. Potential bull buyers look more favorably on this as opposed to just guaranteeing him without the test. Have copies of the EPDs for each bull available to give to buyers. Some buyers may not desire to use them but many will, so be prepared. You would be surprised how many potential customers you might lose over this. If you are confident in the superiority of your genetics, why not try to help your customers out by either buying or helping them market the calves out of the bulls they purchase from you. I think this type of customer service will become even more important in the future.

When trying to market your bulls, decide what method is the most cost effective way to market for you. Just remember, very little value will be added to bulls with average or below average genetics when looking at the more expensive marketing methods.

The American Breeds Coalition, an organization comprised of Beefmaster, Braford, Brahman, American Red Brangus, Santa Gertrudis and Simbrah, in cooperation with the University of Arkansas and the Arkansas Cattlemen’s Association, will hold a beef cattle producer seminar at the Pauline Whitaker Animal Science Center on the campus of the University of Arkansas in Fayetteville on May 31, 2008. This program is free and open to all cattlemen and will consist of some of the top industry leaders sharing their experiences with the utilization of American Breeds cattle. The following is a schedule of events:

9:00-9:20 a.m

Welcome – Dr. Charles Graham, President, American Breeds Coalition; Dr. Keith Lusby, Head, Animal Science Department, University of Arkansas; and Charles Rodgers, Jr., President, Arkansas Cattlemen’s Association

9:20-10:00 a.m.

Utilizing American Breeds to Improve Performance in the Cow Herd – Dr. Tom Troxel, University of Arkansas, Animal Science Department

10:00-10:45 a.m.

Utilizing American Breeds Bulls in Commercial Cow Programs – Dr. Bob Kropp, Oklahoma State University, Animal Science Department

10:45-11:30 a.m.

Break and Visit Trade Show Booths

11:30 a.m.-12:30 p.m.

Lunch – Sponsored by the Brahman, American Red Brangus, Beefmaster, Simbrah, Braford and Santa Gertrudis Breeds

12:30-1:30 p.m.

How the American Breeds Fit the Feeder, Packer and American Consumer – Dr.Gary Smith, Colorado State University - Fort Collins, Animal Science Department

1:30-2:00 p.m.

The Best Way to Market American Breeds and Their Crosses—Marketing Panel

Mike Armitage, Oklahoma Cattlemen’s Association

Jackie Moore, Joplin Regional Livestock Auction, Missouri

Dr. Charles Graham, Graham Land and Cattle, Texas

Dr. Gary Smith

Dr. Tom Troxel

Dr. Bob Kropp, Moderator

2:00 p.m.

Adjourn

We hope you make plans to attend this great program as there will be plenty of education, fellowship, food and fun. If you plan to attend this program, please RSVP before May 27, 2008, to American Breeds Coalition Treasurer, Wendell Schronk at 210-732-3132. The Pauline Whitaker Animal Science Center is located at 1335 West Knapp in Fayetteville.

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