Steer auction by computer (a high-tech cattle-ogue)
Denver — Each Wednesday morning Greeley Producers in Colorado holds a cattle auction. But there are no steers bawling in the pens, no lean wranglers with their fancy Stetsons and well-worn jeans, no gathering of craggy-faced ranchers earnestly discussing the weather or the price of beef.
Instead, all the action takes place electronically. Cattle that have never left the pasture are consigned, sight unseen, to buyers who use personal computers to make their bids. This is one of several electronic marketing operations that are beginning to assume the role that the colorful and often dangerous cattle drive filled a century ago.
''I think this is inevitable,'' comments Darrell Hipes, general manager of National Live Stock Producers Association, the oldest and largest livestock marketing cooperative in the United States.
It is a development that many ranchers view with mixed emotions. On one hand, they're eager for the more competitive market for their livestock that the technology promises. On the other hand, the stock auction has traditionally been one of the major social events on a rancher's calendar. Whooping it up a little in the big city, seeing all the latest agricultural products in a carnival-like atmosphere, and meeting old acquaintances have made these get-togethers the subject of animated anticipation and reflective reminiscence for as long as anyone can remember.
The electronic stock auction began three years ago with several pilot programs sponsored by the US Department of Agriculture (USDA). The department provided the money to develop computer auctioning systems for lambs in Virginia, hogs in Ohio, and cattle in Texas. When the federal money ran out, two of the operations folded. But Mr. Hipes's organization bought the Virginia system last fall and is expanding it into a number of different areas.
Stock men are intrigued because many feel it will redress some of the inequities they see in the current market.
Fifty years ago, all livestock was sold in terminal markets, places like Chicago where ranchers shipped their animals. Because of the large number of packers congregated in these cities, the market was highly competitive. Since then meatpackers have spread out across the country and a hodgepodge of different sales methods have evolved, Hipes explains. In addition, the number of buyers has declined substantially. Together, these factors have made it difficult to get a fair price for their livestock, ranchers complain.
By bringing together more buyers without the substantial cost of physically shipping stock to an auction, ranchers hope computer technology will provide a more competitive market for their products.
Electronic auctioning also promises some major advantages for meatpackers. Because they must send buyers out scouring the country for animals, packers' acquisition costs are very high. The new technology can cut this down, Hipes maintains. But so far many in the meatpacking industry have been reluctant to embrace the change. Buyers in particular say they feel threatened because widespread computer auctioning would alter their jobs radically.
In the Greeley operation, buyers can participate from any place in the country. All they need is electricity and a telephone. The rancher looking for replacement stock can participate through a Radio Shack computer sitting on a bale of hay in the barn. The packinghouse buyer can make his purchases from a hotel room with a portable computer like an Osborne.
Every Wednesday, participants dial into the main auction computer. At 10 a.m. sharp, cattle lots are put up to bid. All animals have been inspected by Greeley Producers and the pertinent statistics fed into the computer for the buyers.
The bidding begins at a preset price. If no one enters a bid within 22 seconds, the price drops by a set amount. When the price reaches the level that a buyer wants, he just pushes a key on the keyboard and the bid is registered. This information is flashed on the screens of all the buyers. If a second customer wants to up the ante, he can push another key, then type in a higher bid.
''It's amazing. You can sell a thousand head a minute,'' says Kent Stegner, who manages the Greeley operation: ''I think that in five years a world of livestock will be marketed this way.''