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What the future holds for livestock auctions

by Seth Teter

It wasn't always this easy to find a seat in the front row.

Those involved with the United Producers livestock auction in Bucyrus say the sales ring once was lined with dozens of buyers. Today, a handful of bidders fill the closest seats.

Auctioneer Harold Reed said livestock sales barns have become smaller and fewer during his career, and he doesn't anticipate their revitalization.

"At one time I worked five auctions a week; today I'm down to one," he said.

But fewer bidders may not be a sign the Bucyrus sales barn is struggling. In fact, it appears to be a success story among other auctions that have shut down completely.

"This is really a premier place to sell cattle," said Bill Passek, a buyer for a small packer in Trumbull County.

The auction has always been based on a simple economic equation: more cattle attract more buyers; buyers create competition; competition drives prices, and better prices draw more cattle.

Now there are new factors to consider. The number of packers has dwindled and major processors often contract with large producers. Advancements in communication and transportation have eliminated the need to have an auction barn in every town.

"The auction barns are headed out the way it looks," said a buyer from one of the nation's largest packers.

Passek said auctions have kept small farmers and small packers in touch as other operations expanded.

"The main thing that has hurt the small farm is that the small packers have gone," Passek said. "We can't let the packers get so big that there are only two or three."

But with fewer buyers, farmers now depend on the larger packers for steady demand. While smaller packers create competition, they are few in number and are often looking for specific animals.

"A few little packers don't mean nothin'," said one farmer. "If (the large packers) ain't here, it's over with. What you need is a few more of them."

The farmer, who asked not to be named, said the nearby Bucyrus auction is his best option for marketing cattle because his farm is too small to go on contract.

"If this thing shuts down, I quit feeding cattle," he said.

The auction appears equally reliant on farmers. Red Milligan, a buyer for Smithfield, said the company depends on auctions to fill gaps in production.

"As long as the auction gets cattle, they'll have buyers," he said.

But farmers can no longer expect to sell whatever they produce, said John Albert, who manages the Bucyrus auction.

"They're going to have to produce a commodity that someone wants," he said. Albert attributes the auction's success, in part, to the quality of its cattle. "The people here are great feeders."

Albert said he expects auctions to survive but become fewer, larger and more regional.

As for the near future, livestock auctions will likely continue as they are, said Brian Roe, an Ohio State University agricultural economist, but "I can see it tailing off gradually over the next decade or two."

Roe speculates that advancements in technology may some day provide small producers a way to measure and market animals quickly and easily from the farm.

Janet Butler, who operates Union Stockyards in Hillsboro along with her husband Bill, said several phone lines are kept open during certain sales to accommodate out-of-state buyers.

"They know that when we put something together that it's going to be put together right," she said.

Union Stockyards is adding a new facility, and Butler said farmers come from 150 miles away, because "they can trust the market and they're satisfied with their results." Because their viability is intertwined, Butler emphasizes the need to educate farmers about which cattle bring the best price.

"There will always be livestock in this area, and we'll always have customers as long as we take care of them," she said.

Caption: Buyers from large and small packers bid on cattle at the livestock auction in Bucyrus as auction manager John Albert works the sales ring. Photo by Seth Teter