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Coronavirus Alters Live Sales
Wednesday, April 1, 2020 12:30PM CDT
By Russ Quinn
DTN Staff Reporter

OMAHA (DTN) -- Bob Birdsell sold his 2019 calves last week. The farmer and cattle producer from Stanberry, Missouri, said a wet spring last year delayed his planting. This then slowed his harvest last fall, which pushed back his calf weaning. These delays forced him to sell his calves in March instead of February.

The delays also forced him to sell in the midst of the COVID-19 pandemic and the new world of social distancing, which also affects how sale barns and auctioneers operate. With livestock auctions deemed essential business because they're part of the food supply, these businesses are staying open.

However, there are major changes in how they operate.

NO SELLERS

The cattle market, much like the rest of the commodity market, did not react well to the first days of the national coronavirus shutdown. The cattle futures markets saw large losses, which kept many cattle producers away from sale barns. Livestock sales were even cancelled.

With the cattle market recovering early last week, Birdsell decided it was time to sell his calves. His local livestock auction was open for business, but with some major alterations -- first and foremost, sellers were not allowed to attend the sale to represent their animals.

"We couldn't watch them sell at the sale barn, but we did watch it online," Birdsell said. "It was different, but they still brought good money."

Birdsell sold his calves at the Clarinda Livestock Auction located in Clarinda, Iowa, about 60 miles north of his northwest Missouri farm. John Anderson, co-owner of the Clarinda Livestock Auction, said last week's sale was the first one they had in which these rules were in full effect.

Only buyers and auction staff could be admitted into the sale barn, and sellers were not allowed to attend the sale in person, Anderson said. The sale barn restaurant was open but only for takeout, and those in attendance were told to maintain the 6-foot social distancing rule.

Anderson said the sale last week was broadcast online for the first time ever for those buyers who couldn't attend in person and for sellers to view their animals being sold. A local company helped install the video equipment and teach the staff how to operate it, he added.

"It was normal business with a few changes," Anderson told DTN. "We had to turn a few folks away who weren't buyers, but they seemed to understand."

MAINTAINING SPACE IN HAY AUCTION

Across the state in northeastern Iowa, hay auctions continue at the Dyersville Sales Company. Dyersville Hay Auction Manager Dale Leslein said they had to change how they sold at their facility's outdoor lot.

They split the hay auction into three parts -- selling large squares bales first, followed by bedding hay and cornstalk bales, and then round bales followed. They waited roughly 15 minutes between each part of the sale to help limit their crowd size, he said.

"It added about a half hour to the sale doing it this way, but it seemed to work. I didn't have anyone within 10 feet of me during the sale," Leslein said. "Everyone is just being a little more cautious."

Leslein said sellers were not allowed to pick up checks; they were mailed out so there was no close contact in the company's office after the sale. Local hay buyers in the market for hay may have been more willing to utilize order buyers, he said.

Their hay sale is every Wednesday morning and he did notice much more traffic in their lot on Tuesday, as people looked over the hay inventory for the upcoming sale. Demand for hay, especially good alfalfa hay, is high now, and he speculated local producers made more of an effort to preview their sale before they decided if they would attend in person or not.

AUCTIONEERS ADJUST

The COVID-19 pandemic has affected nearly all aspects of life and business. Auctioneers see this firsthand. Their business thrives on large crowds, which is the exact opposite of current government regulations.

The National Auctioneers Association published a report last week titled "State of the Auction Industry Amid COVID-19" (http://ftp.auctioneers.org/…). The report was built from a survey sent to members and nonmember contacts.

The auction industry, which includes real estate, fundraising and automobiles, has seen an "unprecedented" number of cancellations since the outbreak of the virus in the U.S. Auctioneers are managing fearful and conservative buyers and sellers, the report stated.

While the live auction attendance has been reduced to zero, the survey reported online auctions have seen less of an effect on business. This situation has pushed more auctions to be online as a way to stay in business.

David Whitaker, the co-owner and auctioneer for the Whitaker Marketing Group Auctions and Real Estate of Ames, Iowa, told DTN the different asset classes sold by auctioneers have seen various effects on their businesses. Auctioneers selling at a sale barn have seen little to no effect, he said.

Whitaker, whose business deals in farmland, fundraisers and personal property, said the fundraiser side of his business has come to almost a complete stop. He was supposed to have a fundraiser auction Saturday for a local bible camp, but it had to be moved online, he said.

As for his farmland and personal property auction, these aspects of his business had to also change and all moved to online format, he said.

"We saw quite a few auctions cancelled, so a lot of people went this way," Whitaker said.

OPTIONS FOR ONLINE AUCTIONS

Whitaker said there are a couple of ways to operate an online auction. One way would be an online simulcast auction where people would log in and bid on whatever is being sold.

Because of the ban on large crowds, many auctions have gone this route, which was already emerging as a popular way to have an auction. He estimated about 30% of farmland auctioneers already utilize online auctions.

Whitaker said another option would be to have a timed online auction event with a soft close. Instead of ending at the set time, after each bid, the auction would continue for a set amount of time, eliminating the last-second bid, he said.

"I am an open-outcry auction guy all the way, but the trend in the business is for more online auctions," he said. "Will these forced online auctions change the business? If I had to guess, I would say probably yes."

Whitaker said many auctioneers were leery to go to a 100% online auction format as, in many instances, buyers were older and less inclined to want to bid online. Many of these people liked the social aspect of attending the auction, he said.

Now, many of these people will be forced to learn online auctions if they want to actively take part, he said. He added that he doesn't know if buyers will enjoy this method as much as going to auction, but he thinks more people will be willing to at least try it.

NEW FUTURE FOR AUCTIONS

As for the future of auctions, Whitaker believes after the time of social distancing and when people can assemble in large crowds again, both buyers and sellers will be more willing to utilize both forms of auctions. While some will go back to attending auctions in person only, a larger percentage may be willing to keep with the online option.

Whitaker is optimistic about the future of agriculture despite the current coronavirus concerns. People in ag are smart people who are data driven and will want to continue investing in farmland, he said.

"With the stock market falling, I think we will see people coming (to invest) in farmland," Whitaker said. "They see this market as a safer investment."

Russ Quinn can be reached at russ.quinn@dtn.com

Follow him on Twitter @RussQuinnDTN

(ES/AG/CZ)


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