Auction Method

It may be a little known fact that I was raised on a Purebred Horned Hereford ranch. My grandfather Jake Rutledge homesteaded about twelve miles east of Consort Alberta around 1914.Whether by accident or design I spent most of my youth working with and/or traveling with Jake, whose house was in the same yard as my parents’ house.

Due to this close association or possibly genetic make up (like Blue Heeler dogs), our personalities, attitudes, and knee jerk reactions became very similar and still are to this day although he is no longer with us. Indeed, Grandmother used to say, “We were slivers off of the same stick”. Since he and her did not get along real well I don’t think that was meant as a compliment.

Back in the early nineteen sixties Jake bought a herd sire for $5000.00. A lot of money a way back then. It would buy about three new half-ton trucks. He did get some good offspring off of this bull.

He sold one son from this bull for five thousand dollars at the Calgary Bull sale in 1962. He had more at home. His friend Clint offered him $1000.00 for one of the bulls at home. Jake said “No” he wanted $1500.00. Clint wouldn’t pay that much.

They met weeks later at the Altario Hotel “beer parlor”, as it was called then. Jake weakened. He offered the bull to Clint for $1250.00. Clint refused. Several weeks later Clint drove into the yard. He had thought it over. He liked the bull. He would pay $1250.00. Jake says” Too late. I have already entered him in the Edmonton bull sale. If you want him you have to buy him there”. Clint replies” Fine with me I won’t have to pay no $1250.00 to buy him there”.

Clint went to the Edmonton Bull sale and bought the same bull. It cost him $2000.00.

That is what the auction method does. It creates competitive bidding. It drives the price up. It did forty years ago. It did a hundred years ago. It does the same thing now.

If you think that you can save your fifteen or sixteen dollars selling charge and get more at home with fewer bidders you don’t understand how an auction works.

People will rationalize it whatever way they can, but in the end no one travels out to the country to pay more. Think about it. Why would they? If they can sit in the auction ring and buy all they want for a $1.20 a pound why would they drive out to your place to pay more? The only reason they are out there is because they don’t want to pay $1.20, but other buyers keep driving the price up. It hasn’t changed in forty years and it won’t change now.

I have been at this a long time. Here is the train of thought when driving out to snipe someone’s cattle at home. “I wonder how low I can bid and still get the cattle”.

Here is the train of thought when driving to the auction market. “I wonder how high I will have to bid to get the cattle bought today.” It hasn’t changed in forty years and it won’t change now.

Due to the B.S.E. in 2003 there were not many cattle moving during the summer. As a result there were not many market reports from the various auction markets. As a result some people panicked and dumped their cattle at home at what they thought would be a good price. When the sales started and they actually found out what they had done, they were stumbling around mumbling, “What was I thinking”?

It proved several things:

#1- If there were no cattle auction sales at all, ever, no one would really know what price to ask. No one would know what to bid or what to accept.

#2 -It proves that no one goes to the country to pay more. If that were the case we would have heard stories to this effect” I am sure glad I sold my cattle before the sales started. I would have had to take less later”. We did not hear this.

We did notice that some of those out getting the cattle bought early never attended any or many sales later. I guess they knew what they were doing. Most of them were not regular order buyers anyway. They were scalpers looking after themselves. They didn’t want to pay retail did they? I am giving you a heads up so that you will know what you are doing next time. Whose best interests did they have at heart?

The cattle market fluctuates from week to week even day-to day. If you were not happy with what you got at any given day at the auction sale you can be sure that those who sold in the country the same day did not get any more. The people buying these cattle know what the market is doing every hour. I have never seen anyone rush out of the sale ring to go out in the country and offer more, before the cattle rancher finds out that the market went down. Neither has anybody else. Think about it.

Incidentally, Jake sold his entire purebred Hereford herd (1000 head) to the Cormie Ranch in 1964.He sold them direct for $330.00 apiece. It doesn’t seem like much but he saved his auctioneering fees. I was nineteen at the time and was thinking about auction school.

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