OCA tries its hand at online cattle auctions

Monday, February 20, 2012

Ontario has been slow to embrace online bidding, but now pilot projects undertaken by the Ontario Cattlemen's Association may accelerate the trend

by MARY BAXTER

Live cattle auctions broadcast on the Internet and offering online bidding might be commonplace in the United States and Western Canada, but they're still a novelty in Ontario. That may be changing.

Recently, the Ontario Cattlemen's Association (OCA) launched two pilots with the goal of encouraging calf club sales to use the technology. This spring, at least three other sales barns plan to add online bidding to their purebred sales.

Streaming auctions online involves setting up equipment such as video cameras at the auction site, high speed Internet with an upload speed of at least two megabytes per second, and an auctioneer who is willing to work with the process, says Sarah Buchanan, the Canadian representative for Cattle In Motion LLC, a U.S. company which specializes in streaming auctions to the Internet.

Buchanan explains that, when she broadcasts a sale, she is on the block with the auctioneer to monitor computer bids. Her computer screen flashes red when someone bids online. "And I'll just alert the auctioneer to that."

She says online bidding means buyers can participate without having to travel to the auction and, for sellers, it offers the potential to reach more buyers. The company took videos of bulls for sale during the Saunders Charolais bull sale at the Keady Livestock Market in Grey County last April and sent out notices to the Charolais breeders on its database. As a result, she says, "five of their 27 bulls got marketed into Texas." 

The company did its first live stocker calf auction broadcast demonstration in Ontario on Nov. 29 at Ontario Stockyards Inc. in Cookstown, Simcoe County. Dan Ferguson, OCA's producer relations manager, says the sale was broadcast to about 50 people, including the organization's advisory councillors who were meeting in Peterborough and spectators in other locations across the province. Online bidding was available but wasn't used.

The main objective of this first pilot was to see how the technology worked, he explains. For the first part of the auction, the resolution "was pretty good." Halfway through, however, the live feed froze. 

Ferguson was planning another live broadcast pilot, this time complete with online bidding, at Hoards Station Sale Barn near Campbellford, north of Belleville in eastern Ontario. The pilot was scheduled to take place Jan. 27 during the Quinte Cattlemen's winter stocker sale.

The pilots each cost $2,000 and are funded by the Agriculture Management Institute.

Without funding, using such technology "would probably cost a producer an extra $3 an animal" with 700 calves at an auction, Ferguson estimates. That's reasonable for technology which can potentially expand the number of buyers for the animals, he says.

(Buchanan notes that, if sales barns plan to include online sales as a regular item, the costs drop to about $500 per auction because cameras can then be permanently installed.)

But Dave DeNure, who owns Hoards Station with his wife, Kim, questions whether online auctions for stocker sales will become widely used in Ontario. "Most of the guys are going to want to be where they can see the cattle," he says. Others may find it frustrating because they won't be able to see who is bidding against them.

However, he acknowledges that for those who have something specific in mind, or if the sale is three to five hours away and they are interested only in a handful of cattle, "it'll be an advantage."

At David Carson Farms and Auction Services near Listowel, where the auctions have been streamed for the past year, the service has been popular, both with those who enjoy watching auctions and those who might call in an advance bid. But the sales barn hasn't yet embraced online bidding.

Agrimart.ca, based in High River, Alta., provides Carson's online broadcast service. Scott Meston, the company's owner, says none of the six sales barns he works with – Carson's is the only one in Ontario – has embraced online bidding. He wonders if it's a generational thing, pointing out that the majority of those participating in the auctions are older and may not be comfortable with computer technology.

Moreover, telephone bidding offers the advantage of having someone at the other end of the phone who can answer questions quickly during a fast-paced auction. But auctions are noisy places, he adds, so there's also the risk with telephone bidding of the person on the other end not hearing your bid.

It may take some time for people to feel comfortable about logging onto a sale and bidding online, Buchanan acknowledges. Sales barns may also be wary of spending extra money until they see a payoff and that payoff "might be somewhat slow."

But given that more sales barns elsewhere in North America are embracing the practice, "it's almost inevitable that most will have to offer it at some point," she says. BF