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On-line bidding drives cattle auctions

Reading Time: 4 minutes

Published: August 17, 2006

When the Calgary Stockyards opened for business in 1903, it was a noisy, busy place full of livestock, cowboys and cattle buyers. It stood near the railroad tracks of a little city with its eye on growth.

Nowadays the historic location has given way to progress and the former site is filled with gleaming, glass fronted warehouses and a busy farmers’ market.

The cattle may be almost gone from Calgary, but they continue to be sold on-line from a southeastern office building where bidders sit quietly in a darkened room watching the activity on a projected computer screen.

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The medium is the internet and The Electronic Auction Market, or TEAM, has become a price setter for cattle across the West since it began in 1986. While cattle prices are largely unchanged in the last decade, the market approach is different.

“Agriculture has become extremely data driven. For many of the people we are dealing with, they are in very remote locations and their tie to what’s happening outside of their area is the internet,” said Jason Danard who helped develop the most recent edition of on-line bidding offered through the TEAM network.

In its 20 years of operation it has moved three million head of feeder and fat cattle to a network of buyers across the country.

“In my opinion there is no better medium to trade cattle 24 hours a day,” he said.

The computer system started when company president Will Irvine bought the franchise from an Ontario firm to offer a new and faster way of selling cattle. The Calgary operation was only selling about 40,000 head per year and needed to change. More change was forced when Marathon Realty refused to renew the lease on the original site. The stockyards moved to Strathmore, Alta., in 1989 but kept the computer sales in Calgary.

Sales started on small machines using ticker tape to provide a summary of the bidding activity. The system was nicknamed the tape, which holds to this day. About 200 buyers were enrolled.

The new system went from a closed network to a public system with about 8,000 registered users, of which half are registered buyers. There are about 200 agents throughout Western Canada inspecting cattle for sale and most recently, agents in several American states have joined to widen the sales arena.

Every sale is open to anyone with an internet connection so people can collect real time market information as opposed to the anonymity of cattle sold in private arrangements.

“The fat cattle market was being established based on how the second cut cattle were selling though the sale ring and the better strings were selling direct from the feedlot. There was no real price discovery mechanism,” Danard said.

Feeders are sold every Friday and fat cattle are offered every Tuesday, Wednesday and Thursday.

“If the market is on its way up, we’re going to sell the bulk of our fat cattle on Thursday. If it’s on its way down we sell the bulk of cattle on Tuesday.”

If the market is slack, more move Wednesday.

Selling commercial cattle is the core business but the system has sold animals simultaneously in purebred production sales including the Calgary bull sale. Most recently a Maine Anjou sale for a group of producers went completely on-line.

“Moving forward, I believe we’re going to see more of that,” Danard said.

The system can take bids in less than a second and goes beyond a limited number of live bidders in the stands or on the phone.

During the busy fall sales season, order buyers can be in two places at once, as long as they have a connection. It is not uncommon to see buyers at a live feeder sale with a laptop computer participating in two sales.

“Just about every laptop today comes wireless compatible, so all somebody requires is a laptop, plug it in and they can participate right there,” Danard said.

In addition to sales, the internet connection provides regularly updated news, agriculture headlines as well as opening and closing quotes from the Chicago Mercantile Exchange.

“It’s always real time. It’s never history,” Danard said.

Yet history is what makes the stockyards a venerable institution.

Entrepreneur Pat Burns arrived in Calgary in 1890 planning to sell beef to feed railroad workers. Along with other investors he decided to open stockyards based on what was appearing in the United States.

The Alberta Stockyards Co. was incorporated in 1903 but was always referred to as the Calgary Stockyards. Cattle were sold on almost a daily basis by 1910, wrote Leonard Friesen in his 1995 book, Cows, Cowboys, Cattlemen and Characters. In 1981 the name was changed to the Calgary Public Livestock Market Ltd.

Burns was on the original board of directors and held the largest number of shares. Other board members included R.B. Bennett and William Pearce. Burns sold his shares to the Canadian Pacific Railway in 1911 for $59,587.

CP expanded the yards in 1912 but few improvements were made over the next 50 years. A few chutes were added including a building with a special squeeze to test cattle for tuberculosis and brucellosis. CP turned its land holdings over to the publicly held company Marathon Realty in 1963.

During its heyday, Calgary set the price for fat cattle but as more feedlots appeared and farmer-feeders started to disappear, fat cattle bypassed Calgary since they were sold straight from the lots to the packers.

Slaughter cattle receipts started to decline and by 1986, no fat cattle were sold there.

Owners Will Irvine and Don Danard decided to turn the business around. They bought the system from an Ontario group that same year and used it until 2002 when the internet system was introduced. Sales started to increase and are up to 200,000 per year on-line. The live auction does about 100,000 head per year.

Early on, people thought TEAM might replace the live auction, but that has not been the case.

“Internet sales will never replace the auction market,” said Jason Danard.

“I don’t believe every auction market in Western Canada is going to survive the next 20 years but I do believe we are still going to see auction markets 20 years from now.”

About the author

Barbara Duckworth

Barbara Duckworth

Barbara Duckworth has covered many livestock shows and conferences across the continent since 1988. Duckworth had graduated from Lethbridge College’s journalism program in 1974, later earning a degree in communications from the University of Calgary. Duckworth won many awards from the Canadian Farm Writers Association, American Agricultural Editors Association, the North American Agricultural Journalists and the International Agriculture Journalists Association.

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