Cattle Marketing

I have been noticing lately on some sales the buyer is getting less and less. I also realize the seller dictates the terms and I don't have to bid or buy. However when I order a steak I don't want the restaurant to keep the meat and give me the bone! Why buy an animal that the buyer keeps the cloning rights and / or the collection rights? Or buyer retains one flush of min. 8 eggs at buyers convenience. I bought the female to try to futher my program and hopefully make some money and if she is off making money for you she ain't helping me. It also isn't convenient messing up the schedule I have her on. Partnerships are one thing but trying to maintain control of something you are selling puzzles me. I was just wondering what the rest of you thought. Just in case I'm wrong I have a darn good black yearling bull by Paddy O Malley out of a Who cow I want $20,000 for. I am retaining cloning rights, collection rights and 100% possession. Buyer will receive an 8 x 10 GLOSSY photo suitable for framing so you can hang it in your barn and show all your friends your " NEW HERD BULL".  (lol)

I agree with you and when I see any "terms" I skip that lot and go on to one that I can buy and manage my way. I dont want any partner with my cows. I dont even let my husband make decisions on my cows.

I don't care to buy anything that has continuing rights in the seller.  They either sell it or don't sell it.  Of course, I have never bought something that was so great the seller wanted to retain some rights in it either. 

I agree 100%  I don't even live in the same time zone as most of the big breeders!

The nature of the business I'm in involves me in quite a few retained interest arrangements. One thing that I insist on is that the terms be friendly to the BUYER. Example = Selling a 1/2 flush interest in Y2703, guarentee of (pick a number) embryos to the buyer. Seller retains possession and assumes all daily upkeep on Y2703. Buyer pays 1/2 of all costs occurred in flushing. Another example = Selling 1/2 semen interest and full possession of Y701. Buyer gets full possession and salvage value of Y701, seller reserves the right to collect Y701 at the buyers convienience. I like to keep these things simple and as easy to understand as possible. RCR

RCR, I understand what you are talking about and perhaps my use of embryos wasn't the best idea in getting my point across. Partnership deals on donor cows and semen selling bulls isn't what bothers me. If I buy a female and don't want to flush her only wanting to have natural calves I now have to disrupt my calving schedule in order to live up to my end of the deal and some of the heifers that have that flush attached to them IMO alot of times aren't donor quality. They will maybe make nice cows. But my bigest gripe is retaining the cloning rights on an animal I bought as well as buying a bull and not being able to collect him. Maybe I'm living in the dark ages and need to come out in the light.

Thanks for your input RCR good info as always.
As for me I'm ranting as usual. ???

I understand exactly what you are saying. I think some people use those "attachments" as an insurance policy. Here is what I reccomend to customers that want to sell possession on a female but retain a flush interest. Sell only 1/2 flush interest in the female, no possession but give the buyer the option to double down and have 100% of the female including all flush rights and salvage. The whole cloning thing hasn't really been an issue for me yet. I believe that the first "ear punch" ever sold at auction in the Red Angus breed happened in the Mulberry Mayhem Event" that we managed last summer. I suppose in the steer game retaining cloning rights on an animal is not that much different than the guys that keep a 1/2 semen interest in every bull that they sell, most of the time it's redundant to do so but it is cheap insurance if one turns out to be the next "great" one. RCR

What gets me about retaining rights is that it is MY dime paying to show and promote that animal, and if I do a good job (and spend lots of money), the seller gets to collect genetics???? No thank you! You sold her/him, your rights end there. Makes you want to take those and just put them in the pasture! If you want the genetics, collect them before you sell the animal. If she/he is to young, then don't sell them.
It rubs me wrong also, but we bred horses for years before we got into cattle. I would have never dreamed of holding genetic rights to a horse! I know, these are not horses, but still! Nothing against you RCL, I just think a sale means sold, not sold with strings attached.

RCR, you responded before I hit Post, but to add to what you wrote, "the next great one" just nails my point above! I buy the genetics, I feed and promote those genetics, and the seller gets to collect on my good job by getting semen/eggs at my expense? I see your point, but like mine better  ;D

I see the point of what yall are saying.  I kind of dislike the ones that on every lot they sale they retain the right to one flush at the owners convenience.  I understand that if your raising show cattle and are breeding for them to calve at the same time every year, then generally the flush can be arranged between calving and breeding without disrupting your schedule, I also understand that the person retaining the flush pays for the flush, and I also understand that in a lot of cases those flush rights never get used.  But seriously, its like they are taking a crap shoot, the heifer isnt good enough to keep in their opinion, but if you somehow do a good enough job and she becomes famous they want to have rights to some eggs.  I ussually skip those breeders that put that stipulation on every lot they sale.
I understand it more if there is a really good breeder, with a really, really nice heifer that they would normally keep and they know for a fact they wont eggs out of her.  The way I see it then, is they are willing to let someone else have her to improve their program, they just want one set of eggs out of her, that way she can work for both of you.  I dont mind the breeder that does it on the occasional exceptional specimen, but the ones that put that stipulation on every lot they sale kind of baffle me.  In fact the way I generally see it is they have the factory that produced it, if they want to sell this one and still keep the genetics, then just go to the factory thats in your pasture and make another one.
The one that really baffled me is a guy wanting to retain interest in a steer.  I am helping a family that is on a budget, but wants the best calf they can get on that budget.  As we all know that is possible to do, it just takes a lot of shopping and looking, sometimes you can get your hands on a really good one cheap depending on the breeder. Anyway I saw a guy post some pics of calves that I thought would work for us. So I called him and asked him what his price ranges were.  He told me they started at $5,000 and went up. I told him I appreciated his time but that was almost double this families budget. He responed by saying tat he would sell them the steer for $2500 but he would keep half interest.  I didnt understand that at all.  But after thinking about it, I may should have done it, after all if he retained half posession, we could have sent him half the feed bill.

frostback said:

I agree with you and when I see any "terms" I skip that lot and go on to one that I can buy and manage my way. I don't want any partner with my cows. I don't even let my husband make decisions on my cows.

Click to expand...

That is funny, I don't care who you are.  (lol) I see the point in not wanting partners, however I do very selectively partner on a few head. Examples ranging from neither of us had enough money so we pooled resources, to a friend that had some good calves out of a particular cow and he thought that I could market them better than he, to friends with small acreage not totally wanting to let go of a former show champion. All of that said, many "large" outfits have production sales and the registration papers are from someone besides them...so some kind of partnership deal has been made.
BUT, I could not imagine selling cows and the highest bidder becoming my new partner. Yes, this has blown up on me. I sold a cow for 5k several years ago. I told the guy shortly after he bought her that mating had real potential. The calf she was carrying sold for 25k at weaning. Was I a wee bit bitter or envious? Heck yes! However, time and experience has taught me that the people that knew where that calf came from have no problem in asking me annually if I have any bred cows/heifers and recently herd bull prospects for sale.... (thumbsup) What I am trying to say is that if  you sell a really good one, that one will help you sell in the future, even if it stings a little at first... <rock>

I don't have a problem with a breeder retaining some degree of flush rights or semen interest in an occasional select individual - I look at that as an opportunity for the buyer to get genetics that otherwise might not be offered or affordable.  But at the same time I'm put off by those that insist on keeping an interest in everything they sell - that's just wanting to have your cake and eat it too.  Apparently though, there are plenty of buyers who don't care, because it doesn't seem to have much adverse affect on sales - I think most just figure that odds are against the seller ever using those rights, and if they do they figure the animal will be making them money at that point anyway, so they figure it won't matter so much to them then (of course that's exactly when it will matter). 

Cloning rights?  I guess my thought there is if the breeder cared enough to collect a tissue sample before I got the calf, there's not much I can do about that.  After I buy it, it ought to be mine...

There is a difference in "partnering" and "retaining rights to...."   
If you speak to someone before the sale, and each puts up money to purchase the animal, then that is a partner.
If you buy an animal that has stipulations attached to it WITHOUT YOUR CONSENT, then that is "rights".

Sullivans are known for their "rights" to sale animals; semen on all bulls sold, embryos on all females sold and cloning rights on everything sold.  I find it interesting that people still line up and spend big money on animals that they do not "own".

I personally never buy an animal that I can not 100% afford (no partners) or 100% control.  There is usually never anything that is "buyer friendly" when it comes to retaining "rights". That is why they are called RIGHTS and not options or suggestions. Keep in mind that sale managment is hired by the seller, they get commission and they work for them.  Sale representitives also work for the seller, even if it is via the sale management.

Couple of thoughts...

If you purchase an animal with retained ownership or rights of any kind, you are giving consent by writing that check.

A seller is not just a "seller" in most cases...the seller is usually the breeder who has spent years or even decades developing a breeding program. In many cases, I don't think it's ridiculous for that individual to also benefit from one buyer's promotion of their breeding stock. As a breeder, I agonize over matings every year, and we've spent generation after generation trying to make our cattle better. Why should it be against the law to profit from one that hits a lick after it leaves our place as a calf? You can't keep them all.

I'm not necessarily promoting the practices being discussed. To be honest, I also usually skip over most of those retained flush heifers in the sale books as well. A lot of bulls sell with stipulations on semen rights, and we've done that a couple of times. It doesn't usually amount to anything. I don't guess I understand the rub with the cloning rights deal, especially if it's a steer. Unless you want to clone the calf yourself, why does it matter? I think it's different if you're talking about breeding stock...just like the number of embryos from a flush. If you own the only one, he or she is worth more than if there are a bunch of the same genetics running around.

I agree with a lot that's been said regarding the reasons people do it. My opinion is there are plenty of good cattle that sell in their entirety. Just buy one of those instead of worrying about the one lot in the book the breeder is retaining a flush out of.

What if instead of retaining 1 flush, you work with the seller to do 1/2 of 2 flushes.  I know quite a few who have done this succesfully, and been able to use semen to flush to that was either not available on the open market, or very expensive.  It can work to both parties interest, as long as you work it that way.  Most of the semen interest/embryo interest don't ever amount to anything. 

I reread a Sullivan's book, and instead of cloning rights, they retain DNA rights.

I agree that a seller is more than just seller, but as a producer and breeder, it is my responsibility to sell stock to improve the buyers herd. I profit by producing and selling that stock. If I can't handle my buyers succeeding with the stock they bought from me, then I probably should not be in the business of selling livestock.  In my opinion, the entire goal of selling stock is hoping the new owners are successful.  If not, then what IS the goal?

The catch in so many of these sales, especially when it is all young heifers, is that they are selling show cattle, and the buyers are buying show cattle.  Many times these heifers are not purchased on the dream that they will go into a herd and produce offspring for many years.  The dream is that they win the next Major. 

That being said, the buyers want access to the very best heifers on a breeders property, but the breeder needs these same genetics to continue their herd, and improvement of that herd.  I have only collected on a retained flush one time out of several heifers that we have retained flushes on.  Like said before, it is cheap insurance, and it also allows us to sell heifers that should really be kept in our herd for continuing improvement. 

I would be more leery of a seller that sells several heifers and only retains interest on one.  Why is the seller not interested in retaining interest in the others.  Do they not fit into the direction that the breeder is pursuing?  I am just being devils advocate here.  But worth thinking about when out shopping.

To your point, BTDT, nothing irks me more than people who are displeased that somebody makes money off something that came from their program. If I'm buying cattle from somebody, they better make money or I won't be going back for more. We want our cattle to be successful and make money no matter where they go, and I don't understand anybody who doesn't feel that way.

I think a lot of good points have been made on both sides of this discussion. I certainly see the point of the discussion, but I think if we're all objective and try to see the scenario from both sides, there is validity to both sides. A breeder should have the right to offer their genetics and maintain some right to take part in the success of those genetics, and he or she needs to understand why doing that might turn some people away. The beef cattle business, like any other business, is a people business. People do business with people. Maybe we should all take a little time to understand the perspective from the other side of the fence a little more thoroughly...I may be missing out on some great opportunities because I don't give more consideration to some of those.