Understanding Cattle Sale Reports – What does it mean?
Twice a year, V8 Ranch puts on the Made for Magic Online Heifer Sale. In the summer, we offer up the best of our fall born Brahman heifers from the previous year, and in the fall, we put the best of our spring borns up for auction.
Choosing which handful of heifers (hey, that’s a great band name!) get selected for the spotlight can be incredibly challenging for breeders. We spend nearly a full year raising these calves, looking for the characteristics that define the brand. Once we’ve chosen the five or six we’re featuring in our auction, it’s time to get them sold!
At V8, we generally hold a two-day online auction with bidders from around the world. They’re up at all hours of the night hoping their bid wins their favorite lot of the sale.
Trust us when we say the bidding is fierce in the final moments. The most popular heifers can jump from $85,000 to over $125,000 in minutes—which is exactly what happened for Miss V8 799/9 in our Made for Magic VIII sale, held October 23-24, 2023.
WHY NUMBERS MATTER TO BRAHMAN CATTLE BREEDERs
Online auctions such as Made for Magic have become increasingly popular in the ranching community. Cattle breeders use the numbers from these sales not only as a temperature gauge on what the cattle industry is looking for in terms of genetics and phenotype, but also as a marketing tool to promote their brand.
One of the tools we use is called the “sales report”. It’s intended to show the overall demand for a particular ranch’s cattle stock. We also report the buyer of every lot sold, which our buyers recognize as a way we promote their investments.
Many people—even seasoned ranchers!—find that reading a sale report can be confusing, as some cattle are sold as a partial interest and others are a full interest. If you’ve watched the auction live, sometimes when the sale report comes out, the numbers are so different you wonder if the report is referring to the same sale you were watching! Well, there’s actually a reason for this massive discrepancy.
Before you invest in your next Brahman bull or heifer, it’s critical to know how the industry creates these reports. It’s also important to note that some breeders adopt alternative methods in their approach to stand out in the market.
LOT 1, MISS V8 791/9
Sold full interest to Jake and Britt Mathews of Ki Cattle; San Augustine, Texas
When it comes to buying a Brahman animal (rather than semen or embryos), there are two main investment types.
Investment Type 1: Buying an Animal Outright
At V8, you can buy an animal outright from us. This is called a “full interest”. You could buy just one or you could buy a dozen—we are thrilled to partner with you and treat you the same either way.
If you have a ranch, you can get yourself a trailer and come on down to get her or him. Once you sign on the dotted line, that Brahman is yours to do with as you wish, but our relationship doesn’t end once the ink is dry on the deal. You can reach out to us with any questions, at any time. We consider you a partner and a friend, not some “customer” we sell to simply in order to line our pockets.
You could also buy an animal and leave them with us. That’s right, we understand that sometimes you just don’t have the space or property type to accommodate a Brahman. In fact, we know this from firsthand experience. Sloan Williams was notorious for buying an entire herd of cattle with no place to put them.
If you’re in the “no place to put a Brahman” category, we offer a ‘room and board’ option where they stay with us. Give us a call at the office or drop us an email if you’re curious about this option.
Investment Type 2: Buying an Interest in an Animal
Many times you’ll see an animal that’s being sold for “one-half interest”. What this means is the ranch is so confident in the potential of an animal that we’re willing to share in the future profits with a client. Think of it like “going halfsies” with your best friend—where you both get to share in the success of the investment.
This means we likely keep the heifer or bull at V8, plus feed and care for them. It’s kind of like buying a blue-chip stock on Wall Street, except in this case, you’re welcome to visit your investment anytime you wish!
Any breeding proceeds that come from that animal are yours to share. For example, let’s say you buy a half interest in a Brahman bull from us. We will continue to manage the bull just like we did before you became our partner. We will split any expenses (like feed and semen collection) and when the semen sales hopefully start to happen, we split the profits 50/50.
When you’re deciding your investment type, one of the biggest tools you’ll want to look at is the Cattle Sale Report. Each ranch is responsible for collecting and disseminating this data, with the express intention of using it for promotion and marketing.
When you’re deciding your investment type, one of the biggest tools you’ll want to look at is the Cattle Sale Report. Each ranch is responsible for disseminating the data, with the express intention of using it for promotion and marketing.
So, let’s get into what goes into creating a “sale report”, how it works, and what to look for when choosing who to invest your hard-earned cash with.
how to read a cattle sales report
If you’re uninitiated in the world of cattle breeding, you may not realize how much math and science goes into it. We might dress in shorts and Crocs (well, when not showing clients around the pens, of course), but there is a calculator wearing a pinstripe suit and glasses inside in the old noggin.
Here’s a quick snapshot of how we wrote our Made for Magic VIII sales report, which includes a mix of full-interest and half-interest sales
In this example, two of the six heifers available for sale were half-interests. This means the buyer owns half of the animal—and V8 owns the other half.
When you total up all these interests, it would equal five “full” animals. Because, of course, with V8 owning two one-half interests, one “full” animal would not have been sold externally.
Industry standard dictates that calculating the average sale price comes from “actual cash in”. Meaning completed sale for the amount of money actually received from external buyers.
If you sold a one-half interest in a heifer for $100,000, that’s the sale price that should go in the sales report.
No one counts the ranch’s half-interest portion in the calculation. Doing so would be like a Las Vegas casino counting the “house money” in determining how much is on the table.
Yet, there’s a new word that has started springing up—and if you’re considering investing in Brahman cattle, you should know what it means.
“Valuation” is a term that counts the ranch’s half-interest in determining the “value” of the cattle. It doubles the reported numbers that go into the report for half interest animals. Established ranchers have taken note of this strategy, and it’s worth noting that these larger figures can appear more impressive, especially to those new to the industry.
Here’s a comparison of a sales report using the Industry Standard Model and the method of including “value” into the report.
Notice the jump in Sale Gross? These “value” numbers are speculative. We did not receive this cash amount, and it doesn’t truly reflect the animal’s worth. While industry standards define “value” as the cash price paid, for those unfamiliar with cattle sales, it might paint a different picture.
Including this “value” number in the cattle sales report may give a skewed perception of the ranch’s performance and potentially leave buyers feeling less valued. Because our reputation, standing, and name is so vital to V8 as leaders in the Brahman industry, you won’t find us doubling any prices.
For example, when Miss V8 472/9 “Magic” sold in Made for Magic IV for the record-setting price of $150,000 for one-half interest, we did not double that sales price or report the “value” of that female as $300,000.
Why not, when it would have made us look so much more impressive?
Well, the first reason is that we are honored and proud to have $150,000 as the sale price.
Furthermore, the “value” metric is speculative and lacks concrete foundation. A guess at best. What is a fact is that one-half interest sold for $150,000 and that the winning bidder placed a bid for $150,000 to own one-half interest. There’s no proof that the bidder would have placed a bid of $300,000 to own 100% of the female. The value number on a cattle sales report suggests such a claim, but at V8, our approach is grounded in clear, verifiable data.
Finally, we believe that doubling the price often makes the bidder feel less-than—like their $150,000 bid wasn’t good enough and we needed to add our half to make the purchase look better to everyone else. If you know V8, you know that’s not our way. We are thankful anytime someone chooses to spend their hard earned money with us—even if it’s $6 for a home fragrance wax melt—and we do our best to ensure you see strong return on investment, no matter your investment.
So, is Magic a $300,000 female? We’ll never know, because we never received $300,000 for her. She is a $150,000 female, as proven by the actual sale price—without a shadow of a doubt.
What does this mean for you as you go along your Brahman journey? When you come across the term “value” or similar expressions in a cattle sales report, be aware that you’re seeing estimated numbers, not the actual sales price.
At V8, our foundation is built on integrity. Drawing inspiration from Maya Angelou’s profound words, “When someone shows you who they are, believe them the first time,” we emphasize transparency and trust in all our dealings.
tips to choosing the right breeder for you
“Sale reports” serve as a kind of report card for cattle breeders. Some brands, like V8, with their long history of top marks, set a high benchmark. It’s expected for newer breeders to look for creative ways to showcase their potential. After all, who wouldn’t want to be partnered with a straight A student?
But just as with any report card, it’s wise to look beyond the grades. You’d probably kick yourself for not doing a little bit of homework (no pun intended) to find out the real deal before investing your time and energy into that relationship.
We are all for innovation—particularly when it comes to the kind of advanced reproductive approaches we employ in our breeding program—but we’re also all about integrity. When you’re part of the V8 community, we always have your back. Our commitment to our customers and our industry is steadfast. Good or bad, we’ll tell you the truth, even if that means opening up our ledgers and breaking out the calculator.
We want you to choose the absolute best breeder for you and your unique goals. It’s our mission to help you see a strong return on your investment. You could have $5,000 to spend with us or $500,000—and we are absolutely honored when you choose V8. Whether your dreams lie in the show ring or the breeding pasture, we’re here to help you every step of the way.
Click here for more details about our available animals—full or half interest. Or, if you have your own females and are looking to upgrade your genetic program, click here to see our domestic Brahman bull semen.