MARKETINGS. In this Issue. Central Livestock Update By Jeff Reed, Vice President, Central Livestock Association. November 2015

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1 2015 Central Livestock Association A Company of Genex Cooperative, Inc. MARKETINGS In this Issue 2 Hedging for Profits 3 Effective Cattle Handling 4 Zumbrota Stockman s Supply 4 Introducing Arrow Cattlequip 5-6 Market Highlights 7 Annual Photo Contest Winners Editor: Brooke Handy Contributing Writers: Jessica DeGroot Johnson, Ashley Kohls, Deanna Lennox, Phil Olson, Jeff Reed, Bob Young Send comments or suggestions to: bhandy@crinet.com CRI Mission Statement CRI is the global leader delivering excellence, innovation and value to members and customers as a strong cooperative Central Livestock Purpose The purpose of Central Livestock is to act as a full service livestock marketing organization assisting livestock producers in production and marketing by providing competitive prices, superior service and broader outlets through a profitable and innovative organization. Central Livestock Update By Jeff Reed, Vice President, Central Livestock Association The fall special feeder cattle sales are well underway and volumes of high quality calves are selling each week at our auction markets. The large runs of calves are a little later than normal as farmers and ranchers seem to be preconditioning and backgrounding their calves more than ever this year. Our sales staff is fielding the usual questions from ranchers and farmers about what creates successful vaccination and backgrounding programs. They are also receiving questions about what buyers are willing to pay for. Like last year, it looks as if the long weaned, processed, well vaccinated calves will be topping the market in any given weight category. Buyers will pay more for healthy calves that are well beyond the various weaning stressors and are off to a great start. Check out centrallivestock.com for auction calendars, full market reports, and to list or view advance consignments. The Stockman s Supply farm store, located at the Zumbrota Market, has had a very successful sales year again. A couple manufacturers have had some product shortages, which has caused some backorder challenges. With manufacturing plant expansions underway, those supply issues are scheduled to improve over the next six months. We are continuously evaluating new product offerings to meet our customers needs. We sell many livestock related products throughout the Midwest, not just in the Zumbrota Market territory. We will be updating the online catalog soon with a number of recently added product lines. This year, we have seen enormous growth in our hedging program, which has become a popular and valued risk protection service to many customers. To better fit individual customer needs, we have expanded use of option strategies in managing price risk for cattle on feed. As cattle markets have moved lower in recent months, producers once again saw the value of price protection on their balance sheets and we have hedging products available for almost any size producer. As always, thank you for your business. We are only a phone call away for any of your livestock marketing needs or questions. November

2 Hedging for Profits By Jessica DeGroot Johnson, Livestock Feeding Program Manager, and Bob Young, Central Livestock Operations and Hedging Manager Volatile livestock prices have always been a challenge for producers when it comes to making decisions on marketing their livestock. Many of Central Livestock s customers utilize our hedging program as a tool to alleviate some of the stress. When you hedge livestock, you lock in a selling price which takes away some of the risk involved with raising livestock. A key to successfully hedging livestock is knowing your cost of production. To calculate the breakeven price, you need to know what it costs to raise those animals from start to finish. These are considered expenses, which will include the initial cost of the livestock, feed, yardage, veterinarian bills and labor. Other than the purchase cost of the livestock, feed will typically be the largest expense. For an accurate calculation, know the type of feed that will be fed, the price per unit, an estimate of the average daily gain and number of days on feed until market. Knowing the number of days on feed will provide the month to market your livestock and determine when to hedge them. After costs are estimated, you can calculate the breakeven selling price. The most important calculation is determining what profit margin you are satisfied with and will allow you to continue feeding livestock in the future. Central Livestock customers who use our hedging program not only ease some of the stress of marketing livestock themselves, but it also gives their lenders some additional peace of mind. Central Livestock takes care of the futures market variability from when the hedges are put in place to when the livestock is marketed. This allows for more flexibility in your operating line of credit with your lender. Customers that hedge their livestock are required to fill a contract. One fed cattle contract requires 40,000 pounds or head of finished cattle. One feeder cattle contract equals 50,000 pounds with a feeder base of pounds each. Finished hog contracts are based off 40,000 pounds of carcass weight, or about 200 head of hogs. Some Central Livestock producers in the last year have elected to use options instead of straight hedges to protect their cattle. By using options the producer has the opportunity to lock in a bottom price while leaving the top side price open. Pricing options determine the strike price (your bottom), and time frame determines the cost of the option. The number of pounds per contract is the same as a straight hedge. Throughout the year, we conduct one onone and group meetings with producers to help determine individual price protection needs. There is no charge for these meetings as long as you market your livestock with Central Livestock. If you are interested in hedging your cattle or hogs or have questions about the program, contact Bob Young, Central Livestock Hedging Manager, at (651) , or contact him at the Zumbrota market at (877) CENTRAL LIVESTOCK ASSOCIATION South St. Paul (800)

3 Introduction to Effective Cattle Handling Proudly producing safe, wholesome & healthy beef while maximizing carcass value. By Ashley Kohls, Executive Director, Minnesota State Cattlemen s Association There are three important concepts to understand when first approaching a group of livestock: pressure zone, field of vision and speed. The pressure zone, also known as the flight zone, is the personal space around an animal that causes them to visually respond to your presence. The size of an animal s pressure zone can be dependent upon their previous experience with being handled or genetic disposition. Pressure zones are pretty basic; use a large pressure zone for flighty or nervous cattle (like steers with their heads up), a moderate pressure zone for familiar cattle in an open setting or cattle that have had pleasant interactions with people, and a small pressure zone for calves that are fully acclimated on a farm or animals who have been handled almost daily (like show animals and dairy cattle). Slowly approach an animal or group of animals to see how close they will allow you to get before moving. This is the pressure zone. Cattle, like humans, have two responses fight and flight. Use the animal s pressure zone to allow them to get used to you. An animal s field of vision varies greatly depending on the type of animal, predator or prey. Animals like cattle are considered prey animals, so their eyes are located on the sides of their head to allow a large field of vision as a mechanism for protection from predator animals. Because of this, cattle need to turn their head to see you if you are standing behind them. If a head turn happens while pressure is applied to an animal, it causes them to alter the direction they will walk. Example: If a cow must turn her head to the right to see you, she will veer to the right while walking. If you have ever had the chance to watch a good cattle dog, you will notice how they work both eyes of the animal to encourage them to walk in a straight line. Once you understand the basics of cattle vision and pressure, you have accomplished two important steps in gaining the animal s trust and are now able to better position yourself for a successful interaction. A final key point to remember in handling cattle is speed. Adjust your speed of movements to achieve the desired outcome. Cattle with smaller pressure zones will need more rapid movements to get them moving and keep them moving. Cattle with larger pressure zones will need slower, more deliberate movements to get them moving. For these types of animals, it s important to release your pressure and back off once they have responded. Cattle can only process one main thought at a time, so it is vitally important to be clear on what you want them to do with deliberate and concise movements. Always approach an animal so they can see and respond to you visually. This will allow you to be in control and not startle the animal, which will encourage a fight or flight response. Safety is always the #1 concern when working with any livestock species, especially large animals. This includes not only the safety of the people handling the animals but the safety of the animal as well. It is important to always be aware of your surroundings, position in pens and responses from the cattle. If at any time while handling the animal you feel at risk, get out of the situation by whatever means necessary. No matter which sector of the industry you represent, the end goal should always be the same: to supply consumers with a safe, healthy and wholesome product! Five General Handling Principles There are five basic principles of cattle behavior that, when used properly, can improve the ease and speed of working cattle while reducing stress and increasing efficiency. 1) Cattle want to see you and be allowed to respond to you visually. 2) Cattle want to go around you. Position is important to minimize cattle catching themselves on gates. 3) Cattle want to go to and be with other cattle. 4) Cattle want to remove pressure. Only apply pressure when cattle have a place to go. 5) Cattle can only process one main thought at a time. The only way to work cattle quickly is slowly. Anatomical Point of Balance Blind spot (50 ) directly behind Cattle can see 310 Sometimes larger with size Limited ability to turn head, causes whole body to shift while looking towards an object. Actual Point of Balance Albany (800) Zumbrota (877) Rock Creek (320) West Fargo (800)

4 Zumbrota Stockman s Supply By Jessica DeGroot, Livestock Feeding Program Manager and Phil Olson, Stockman Supply Manager Zumbrota Stockman s Supply is located next to Central Livestock s Zumbrota market and was purchased by Central Livestock with the auction market in The store specializes in livestock products, selling everything from ear tags to squeeze chutes and provides products to producers all over Minnesota, Wisconsin and Iowa. Stockman s Supply carries complete cattle handling systems from Arrow Cattlequip, Real Tuff and For Most. It also carries the following: Applegate gates, feeders and panels; Behlen Country stock tanks and wire mesh panels; Smidley steer stuffers and creep feeders; Common Sense continuous fencing, feeder wagons, bale feeders and heavy duty feed bunks; and Easyway mineral feeders and oilers for fly prevention. The store also carries guard rails, railroad ties and K Fence fencing supplies for any fencing needs. Inside the store you can find ear tags, rubber boots, work gloves, sorting sticks and many other items. Stockman s Supply buys directly from the manufacturers, so when producers want something out of stock, special ordered, or not Zumbrota Stockman s Supply Call (507) Conveniently located at the Central Livestock Zumbrota Market kept in regular store inventory, the items are shipped directly to the producer. Stockman s Supply also has a delivery service available to customers. Central Livestock provides the truck and trailer, and customers pay a flat mileage rate for delivery. An online catalog with the Stockman s Supply product line can be found at Store hours are Monday through Friday 8 a.m. to 5 p.m. and Saturdays 8 a.m. to 12 p.m. CST. Customers can contact Phil at the store by calling (507) Introducing Arrow Cattlequip By Deanna Lennox, Marketing, Arrow Cattlequip Arrow Cattlequip was founded in 1988 with generations of ranching livestock and the land as their background. Arrow s cattle handling products include squeeze chutes, portable handling systems, stationary systems and loading chutes. These products come from inspiration and motivation to bring the best livestock handling solutions to the rancher. They strive to make livestock handling easier, faster and safer. Each product has been developed from years of hard work, innovation and testing. Arrow pays close attention to design and detail, bringing innovation and quality to the industry. With their dealer network they provide equipment to livestock producers throughout the United States and Canada. With a worldwide network of manufacturing facilities in the cattle equipment industry, Arrow understands cattlemen s needs in all parts of the world. Let Arrow Cattlequip s experience and knowledge of cattle handling help you move forward. For more information about Arrow Cattlequip, call Zumbrota Stockman s Supply Manager, Phil Olson, at or visit You can also see their chutes in action on YouTube just search Arrow Farmquip North America. CENTRAL LIVESTOCK ASSOCIATION South St. Paul (800)

5 Market Highlights Minnesota State Fair 4-H Auction Congratulations Malory Mattson! Mattson, a Freeborn County 4 H member, exhibited the Grand Champion Dairy Steer at the 2015 Minnesota State Fair. The steer sold for a record $10,000 to Central Livestock Association, O & S Cattle Co. and American Foods Group at this year s Minnesota 4 H Purple Ribbon Auction. Photo Credit: Lisa Young, Agri News Industry Events Make sure to stop by our booth at the 2015 Minnesota Cattle Industry Convention and Tradeshow, Dec. 3 through 5 at the Grand Casino in Hinckley, Minnesota! This year s convention theme is Feeding the Future. Many topics will be covered during the convention including: the future of the cattle industry both economically and politically, the future of the tools used within the cattle industry and the future of those who will carry the torch as the next generation of cattle producers. Visit for more information and to register! Central Livestock Association Special Feeder Cattle Sales Schedule Zumbrota Market Special Feeder Sales Thursday at 10 a.m. November 19, 2015 December 3, 2015 December 10, 2015 Bred Beef Cow Sale December 17, 2015 January 7, 2016 January 21, 2016 February 4, 2016 February 18, 2016 February 25, 2016 Bred Beef Cow Sale March 17, 2016 April 14, 2016 June 2, 2016 Beef Bull Bonanza Rock Creek Market Special Feeder Sales Wednesday at 10 a.m. November 18, 2015 December 2, 2015 December 16, 2015 January 6, 2016 January 20, 2016 February 3, 2016 February 17, 2016 March 2, 2016 March 16, 2016 April 6, 2016 April 20, 2016 May 4, 2016 May 18, 2016 June 15, 2016 August 17, 2016 Customer Appreciation 6th Anniversary Sale July 20, 2016 West Fargo Market Cattle Sales Every Wednesday at 10 a.m. November 18, 2015 Sandhills Sale November 25, 2015 Sheep Sales Designated Wednesdays at 8:30 a.m December 2, 2015 December 16, 2015 Albany Market Special Feeder Sales Wednesday at 10:30 a.m. December 9, 2015 January 13, 2016 February 10, 2016 March 9, 2016 April 13, 2016 Albany (800) Zumbrota (877) Rock Creek (320) West Fargo (800)

6 CENTRAL LIVESTOCK ASSOCIATION Auction Schedules Albany Market (800) Monday & Wednesday: 7 a.m. to noon Hogs and Sheep Tuesday & Thursday: 7 a.m. to 10 a.m. Hogs 10:30 a.m. Fed Cattle, Slaughter Cows & Bulls along with Baby & Started Calves on Thursday Special Dairy Sales: First Wednesday & third Friday of the month, 10:30 a.m. Special Feeder Sales: Second Wednesday of the month, 10:30 a.m. Rock Creek Market (320) Monday: 8 a.m. Market Cows, Fed Cattle, Feeder Cattle, Hogs, Sheep & Goats Wednesday: 10 a.m. Market Cows, Fed Cattle, Feeder Cattle, Hogs, Sheep & Goats Special Feeder Sales: 10 a.m. Every other Wednesday, September May Zumbrota Market (877) Monday: 8 a.m. Overnight Market Cows/Bulls 10 a.m. Fed Cattle, Stock Cows & Breeding Bulls 1 p.m. Feeder Cattle, Day Delivered Market Cows/Bulls 4 p.m. Baby Calves Tuesday: 8 a.m. Sheep, Goats & Feeder Pigs Wednesday: 10 a.m. Market Cows/Bulls & Fed Cattle Special Dairy Sales: Second & fourth Tuesdays, noon Special Feeder Sales: 10 a.m. Every other Thursday, September April West Fargo Market (800) Wednesday: 10 a.m. Feeder & Slaughter Cattle Sheep Sales: Designated Wednesdays at 8:30 a.m. Central Livestock Zumbrota Hay and Bedding Auction First and third Saturday of the month at 10 a.m. November 21, 2015 December 5, 2015 December 19, 2015 January 2, 2016 January 16, 2016 February 6, 2016 February 20, 2016 March 5, 2016 March 19, 2016 April 2, 2016 April 16, 2016 May 7, 2016 May 21, 2016 Hay and Bedding Drop-off Hours Friday before the sale: 7 a.m. - 5 p.m. Saturday of the sale: 7 a.m. - 9 a.m. Call Big John Hoernemann to make other arrangements at Buyers: Hay and bedding needs to be paid for before loading, staff will be available to help load until 5 p.m. sale day, any other arrangements need to be made with Big John. Sellers: Checks will be available for pick up on sale day or mailed the following Monday. Central Livestock Association assumes no responsibility as to the quality of the hay and bedding sold. We act only as a selling agent. CENTRAL LIVESTOCK ASSOCIATION South St. Paul (800)

7 11th Annual Central Livestock PHOTO CONTEST WINNERS! 1 ST First Place: Black Beauties Melissa Schutz, Boyceville, WI 2 ND 3 RD Second Place: Wheat Sunset Tina Frey, Pine City, MN Third Place: Idaho Palouse Spring SheilAnne Smith, Moscow, ID Albany (800) Zumbrota (877) Rock Creek (320) West Fargo (800)

8 Listen to our daily radio market reports. Follow us on Facebook Get Connected - Company and industry news - Upcoming sales and early consignments Central Livestock Association - Zumbrota Market Sign up to receive Central Livestock E-NEWS Central Livestock Association Visit for weekly sales schedules, early consignments & market reports West Fargo Corporate Office South St. Paul 953 Concord St. S. P.O. Box 419 South St. Paul, MN Country Representatives Doug Lind: Jim Bevier: Allen Houchins: Jim Verschoor: Albany Market County Road 10 Albany, MN Mgr. Greg Supan: Asst. Mgr. Lonnie Ritter: Rock Creek Market 3923 State Highway 70 Pine City, MN Mgr. Dave Vandenheuvel Dick LeCocq: West Fargo Market 851 Arena Road, Suite 204 West Fargo, ND Mgr. Mike Hilde: Kent Oland: Kelly Waslaski: Albany St. Paul Rock Creek Zumbrota Zumbrota Market County 6 Blvd P.O. Box 185 Zumbrota, MN Mgr. Bob Young: Big John Hoernemann: Don Huntington: Dale Krier: Donnie Dohrn: CRI N