Analyze The Market Environment
     Analyzing the market environment is a fancy way of saying that you need to understand the forces of supply and demand and  how they influence cattle prices. You must be aware of how the cattle cycle, cattle inventory numbers, hog and poultry  numbers and the price of corn influences cattle prices. In short, this is knowledge of the market forces that you are facing at  the time of sale. It changes each year. Cattle producers must become involved in the market and develop an expectation of  price levels.

     Don't be like the producer who asks what is going on in the cattle market because he had taken some calves to the sale barn this year and received $30 per cwt lower than last year. He had no advance understanding or expectations because he had  not done any homework. He could have asked about prices from a neighbor or even looked in the newspaper. His last  exposure to the cattle market was the year before when he took his calves to market.

Review Available Market Alternatives
     Many factors influence whether or not a market is acceptable. As you evaluate market alternatives ask yourself some of the  following questions.  What type of cattle will this specific market take?  You need to sell a certain number of animals of a  particular weight, color, frame size, sex, and health and management status. Will your cattle sell well at this market or are they going to be discounted because of one or more reasons.  Do you have the ability to influence the way your animals are  presented to the buyer? Auctions generally sell single lots--can you group your calves? On farm sales and some regional  sales automatically grade, sort and group calves by sex, weight and color. Do you have enough cattle to sort by class?

     What about the buyers? Who are their customers? Are they buying for only a few customers, i.e., a packer, or are they  servicing a broad customer base that can take wide range of weights, ages, and frame sizes?   Take the time to meet and talk with these buyers. Find out what they normally buy and what they want to see in a calf.  Match his needs against your cattle  inventory.

      Remember you also sell cull cows and bulls. This market is quite different than your calf market. Buyers are different and the  main price determining factors are health and weight. Cow grades are based primarily on carcass yield potential.  Bigger  carcasses that yield a high amount of meat are paid a premium over smaller carcasses.

     There are also other considerations you need to evaluate. These factors may not directly affect the price you receive for your  cattle but they can indirectly influence the number of dollars that you finally put into your pocket.  What about the handling  facilities?  Will they let you work your cattle in an easy manner or will your cattle be stressed in the unloading or loading  process? Stressed cattle can show signs of sickness and frequently lose weight.  Can you feed and water your cattle if they  are penned for any length of time prior to their sale?  What about the records that are kept on your cattle as they go through  the sale?  Are they accurate?  How soon after the sale are you paid?  And how is the amount of shrink determined?

     Review your marketing alternatives. Take some time to see if there are other market outlets that you can use. If there are,  evaluate them critically, not just if they can provide you with a better price than your current market. The time to review these options is not the day before you plan to take your calves to the sale but, sometime earlier so you can have time to  thoroughly review and understand these options.

Compare Market Alternatives Against Your Operation's Goals
     Once you have analyzed the marketing alternatives available to you, compare their potential to your stated business  objectives. Will they fit your operation? Are they physically possible or do you have to significantly change the way you do  business to utilize an alternative?

Make Your Decision And Market Your Cattle
     Finally, make a decision and market your calves. Don’t try to second guess your decision. If you do well keep you will want  to keep this alternative for next year.  If it did not pan out then scratch this alternative and go on. You learn from your  mistakes and every year is different in the cattle business. Marketing is a planned event that is reviewed every year, changed  if necessary, but constantly improved.

     Last, but not least, what about retained ownership? It is a marketing alternative.  Would it be profitable for you to keep these calves until next spring? They will weigh more. The information required to analyze a retained ownership decision is the same  as that used to evaluate any other market.  First, estimate the cost of gain. Then compare what you can get for the calves  today against a spring sale. The futures market and knowledge of the basis will help develop a spring price estimate.

Summary
     Most producers are good production people and they dislike the hassle associated with marketing. But, in beef cattle  production survival depends on a producer being above average in production, marketing and financial management.

     A successful beef marketing effort includes at least six steps: knowing what you have to market, knowing the costs of  production, knowing the market environment, reviewing alternative marketing actions, comparing alternatives against  management goals, and making a decision and staying with the decision.

     These steps allow a cattle producer to inventory his herd and review its strengths and weaknesses. Reviewing the market  environment also provides information about the basic supply and demand factors that influence prices.  Comparison of  market alternatives allow the opportunity to match the operation’s strengths against what the market is offering this year.   Finally, a marketing decision must be made. This step wise procedure will allow any cattleman to make a better and more  informed decision when marketing his cattle.