Online silent auction next generation of livestock marketing

REYNOLDSBURG, Ohio – Jim Funk had a headache after the dispersal sale of his Jersey herd last week, but it wasn’t from the usual hassles of dealing with a farm sale.

He didn’t even have to figure out what to do about parking cars after a 7-inch rain the night before.

His headache came from hanging onto the telephone for two hours, listening to the active bidding of more than 25 buyers from California to Vermont, pushing the cattle prices into the upper range of what Funk had expected to get.

Funk was listening to the last phase of a silent auction the Jersey Marketing Service conducted by Internet, e-mail, and telephone for the dispersal of 90 milking cows and bred heifers from his herd of 150. He has retained the younger heifers to sell when they are closer to breeding age.

The silent auction is a new concept in the old idea of selling off an entire herd.

For smaller herds.

According to Michael Hurst, assistant manager of the Jersey Marketing Service, a division of the American Jersey Cattle Association, it is a kind of sale that is particularly advantageous for a producer selling a smaller herd.

This is the second silent auction the Jersey Marketing Association has conducted. But with this sale, the USJersey Web site was overhauled to make the sale catalog much easier for potential buyers to access.

And as soon as this sale was completed, the association began another silent auction of 38 lots of Jersey embryos.

Jim Funk farms in Liberty, Ill., near Quincy. His family has been milking Jerseys for 80 years, since they began their herd in 1921 with the purchase of three registered Jerseys from a neighbor.

But Funk said the family decided about 10 years ago it would eventually disperse the herd since none of his four children was interested in taking over the farm.

With the herd in the best shape it’s ever been in, and the machinery in the worst shape it’s ever been in, and his longtime milker wanting to quit, Funk decided the time had come.

National sale.

While he was thinking in terms of late fall, when all of his heifers would be old enough to breed, the Jersey Marketing Association convinced him that if he wanted to sell into the larger dairies in California, the sale needed to be in the first part of June. After that time, California dairies do not want to ship cattle until after the first of the year.

The highest selling animal in the dispersal sale, Funk Barber Reggae, sold for $3,050 to Moo View Jerseys of Chowchilla, Calif.

Funk had several offers for the whole herd, but with a wide variety of cattle to sell, he thought he would be better off selling them individually.

“I had a number of cows that were really worth about $800 to $1,000,” Funk said. “But I also had some with some very good genetics that were worth three or four times that.”

In the final auction, 29 of the 89 head sold went for $2,000 or more.

But Funk was also not interested in having to fix up the farm and get ready for an on-farm auction. So when the Jersey Marketing Association suggested a silent auction, it sounded like a good idea to him.

Benefits seller.

Hurst said the sale had several advantages for Funk.

First, the sale was not large enough to have attracted the same kind of national audience that participated in the bidding, Hurst said.

Secondly, Funk saved the expense of preparing for an auction, and since the catalog for the sale was created first as a Web document and then printed from that, Funk did not have to assume the cost of printing.

The preparation for a silent auction begins with the videotaping of the cattle to be sold.

Because the catalog information was written in HTML coding as a Web document before it was copied for print reproduction, the catalog and the pedigrees were accessible on the USJersey Web site at a much faster connection speed. And four-color photographs were available on the Web at a fraction of the cost of printing a four-color catalog.

After the catalog was on the Web, Hurst said, it was burned onto a compact disc for distribution with the videotape. The CD and catalog were sent to about 100 likely buyers.

How it worked.

Prospective buyers registered and got a bidder number by calling the Jersey Marketing Association, and then at 8 a.m. June 4, they were free to bid at any time either by telephone or by e-mail. The bids were posted at three times during the two-day auction on the Web site – at the end of the first day, at noon on June 6, and then 15 minutes before the final conference call lot bidding session at 2 p.m.

To join the conference call and to bid on any one lot, a bidder must have already made a bid on that lot. Of the 59 bidders who registered for the auction, more than 25 participated in the final bidding.

The cattle were offered one lot at a time, and the bidding completed on that lot before the next was offered. Bidding on each lot continued as long as anyone wanted to bid, and with some cows, eight to 10 people remained in the bidding in the last phase.

Funk said a number of the cattle were bought by people within 50 miles of his farm, but he also had buyers from Ohio, Wisconsin, Arkansas, South Dakota, Idaho, and California.

On-farm visitors.

In the weeks before the sale, several people came to the farm to look at the cattle. In fact, Funk said, three people from Illinois showed up at 11:30 a.m. on the day of the final sale.

By having people come look, he said he got more for some of the older cows than he might have if they had all been bought sight-unseen.

“Anyone would be hesitant to buy a 7- or 8-year-old cow if they hadn’t had the opportunity to see that she was sound,” Funk said.

The average sale price of $1,807.87 was the highest average of any Jersey Marketing Service dispersal sale this year.

(You can contact Jackie Cummins at 800-837-3419, ext. 23, or by e-mail at jcummins@farmanddairy.com.)