Auction barns adapt to changing markets

WOOSTER, Ohio — Since the early 1900s, one of the prime places to sell livestock and crops has been the local auction barn.

Depending on where you live, your “local auction barn” could be within walking distance, or it could be a couple hour’s drive.

But one thing most Farm and Dairy readers have in common is access to a weekly auction barn — sometimes even multiple barns.

If you live in Wayne or Holmes counties, for example, you have at least five auction barns within about a half-hour drive — with most of the sales held on different days of the week.

But nearly all auction barns have been forced to change with the times. Some have gone out of business, due to changes in the farming community and changes in the marketplace, and others have had to adapt to new technology, and new ways of doing business.

According to the Ohio Department of Agriculture, which issues licenses to auction facilities — there are about 20 weekly auctions across Ohio.

Dan Goeglein, ag inspection manager with ODA, said the number of auctions has decreased over the years, but the ones that remain in business have generally maintained their volume — and some have even grown.

Built on tradition

In the rural community of Mount Hope, located in eastern Holmes County, the Mt. Hope Auction has been selling farmers’ livestock since at least the 1940s. The current auction barn was built in 1979, and for nearly 40 years — the sale has been one of the area’s top auctions.

Today, the Mt. Hope Auction is run by brothers Thurman and Chester Mullet, with livestock and hay and straw sales every Wednesday.

The sale draws livestock, hay and straw from Amish and English farmers across Holmes County — and also from counties up to two or more hours away.

Although local farmers do not raise as many livestock or dairy cows as they used to, owner Thurman Mullet said the overall numbers at the auction are mostly unchanged, because farmers are bringing livestock and grain from further distances.

Adapting to change

The Mullet family has done what other surviving livestock auctions have done: adapt to change. But the Mullets have also adapted in some unique ways.

In 2008, the Mullets added a 200-by-100 foot building to house a flea market and vendor area on sale day, and in 2013, after many years of special horse sales, they built an enclosed horse sale arena.

Their most recent addition was a 40,000-square-foot convention center that holds shows and events throughout the year, as well as community events.

In Mercer, Pennsylvania, the Mercer Livestock Auction has been in action since 1960, when auctioneer John Reimold began as auctioneer, following the closure of the Pittsburgh livestock yards.

John was the father of current manager, Trish Loomis, and the grandfather of owner, Rod Loomis. The Mercer auction is held every Tuesday, with a focus on beef cattle and feeders.

Loomis said one of the biggest challenges for livestock auctions is realizing that today’s farmers have a lot of other options, including direct sales and online sales.

Going online

About five years ago, Mercer added live online bidding to its sale platform, and now has about 1,000 online registered bidders in 33 states.

“We’re not controlled by the bidders in the ring,” he said.

Trish Loomis is now in her 80s and is ready to retire. The auction is currently for sale, but Rod said they want to sell it to someone who will keep it successful, and treat buyers and sellers in an ethical manner.

At the Muskingum Livestock Auction in Zanesville, Ohio, beef cattle are the specialty. The auction is a Midwest destination for selling feeder cattle and also finished cattle — many that are headed out of state via Interstate 70.

General Manager Denny Ruff said the Muskingum auction sells 50,000-60,000 head of cattle a year, along with some swine, sheep and goats, and a few horses. The weekly sale is held every Wednesday, with some special weekend sales.

Ruff has been with the auction since the 1980s, and the auction itself dates back to 1940. Today, everything is computerized, including the records for each animal.

“We’re computerized from the time the cattle hit the (unloading) dock to the time they go out,” he said.

Changing times

While some livestock auctions have done well on their own, others have joined or been sold to larger entities that manage multiple auction barns.

One of those is United Producers Inc., which operates 17 weekly auctions, and nearly 20 livestock collection facilities. UPI has facilities across Ohio, as far west as Missouri, and also operates a collection facility in Pennsylvania.

Mike Bumgarner, UPI president and CEO, said producer interest in selling at livestock auctions is changing, but they still remain a viable place to sell.

He said farmers in general are getting more sophisticated with their operations, and are investing more money in their animals. In turn, they often need a degree of certainty as to what they’ll receive when they sell those animals.

On the one hand, Bumgarner said “there’s no truer form of price discovery than an auction.”

But on the other hand, “Our larger producers cannot, a lot of times, sit unprotected in the marketplace and go to an auction and not know what they’re going to get.”

UPI offers risk management as one of its services, along with credit services. But auctions are still a major part of the company, with 55-60 percent of cattle sold through auctions, and about 50 percent of UPI sheep go through auctions.

Bumgarner said UPI does not do a lot of Internet auctions, but did hold an online-based feeder calf sale this spring, during the Ohio Beef Expo, in which more than 3,000 head were sold.

The auction was held live at the Expo, and the cattle were shown to buyers via a video feed that was displayed on a large monitor. The auction lasted about an hour — compared to a full day or more if the cattle had been run through a sale ring.

Specialization

Later this year, Bumgarner said UPI is planning to update its sale information and on-screen information at each facility, to tell buyers more details about the animals they’re buying.

He said the consumer wants to know more information, whether it’s grass fed, or some other detail, and he hopes that adding more information will add to the premium of the animals.

Stan Ernst, an agribusiness management professor with Penn State University, said it’s doubtful livestock auctions will go away anytime soon. But the challenge will be to attract enough buyers to make the sales work.

“I think that specialization is one of the things that a lot of these places are going to have to look at,” he said.

Chris Bruynis, Ohiwo State University Extension educator in Ross County, said as livestock auctions still “serve a critical function in livestock agriculture,” especially for cattle and sheep.

But there has to be a high enough volume of both animals and buyers, to make an auction work. In some western Ohio counties, for example, auctions have disappeared as farmers moved away from livestock, to grain farming.

“There has to be a critical mass of animals coming through the sale barn,” Bruynis said.

Special sales

Auctions can specialize in a variety of ways — including the type and quality of livestock they sell, selling pedigreed animals, and holding special sales outside of regular sale hours.

For UPI, one of the specialty markets has been with sheep. About four years ago, the company decided to close the Mount Vernon Livestock Auction, and open a new location that served as a collection point for livestock, especially sheep. Instead of an auctioneer, the animals are sold through private treaty bidding.

According to Bumgarner, the auction industry will likely continue to serve farmers, but auction barns will need to keep up with the times.

“We are constantly exploring new platforms,” he said. “I think there will always be a place for auctions, but they will change over time.”