Auction companies adapt to cope with COVID-19, struggling farm economy
Wisconsin auction companies have been busy over the past four years, as hundreds of farmers, battered by low commodity prices and bad weather, have sold their farms and liquidated their machinery and cattle.
Just when it looked like conditions were improving early this year, agriculture was dealt another crippling blow by the coronavirus pandemic, which affected producers, financial institution, auction houses and sale barns around the state.
To help bring some perspective to the current situation, Wisconsin State Farmer contacted three auction companies located in different regions: Tim Slack Auction & Realty, Lancaster in southwestern Wisconsin; Premier Livestock & Auctions, of Withee, in the north central region and Miller ’n Company Auction, Newton in eastern Wisconsin.
Who is going to be farming 20 years from now?
Slack said he hasn’t been severely hampered by COVID-19. “I had a big machinery sale in Dane County on May 7. I sold big self-propelled choppers and tractors. We called it an online-only auction because of COVID and especially because it was in Dane County, which was such a hot spot for the virus,” he explained.
“People called and said they lived just down and road, or didn’t have a computer, and wanted to come to the auction. I told them to come but if the police removed them they'd have to go to the end of the road and call in their bids,” Slack said.
“We had two online platforms: www.proxybid.com and www.equipmentfacts.com. We had a lot of bidders on those, with over 150 numbers out, and we had probably close to 250 people at the sale itself. But no police officers showed up, and we had no problems.”
However, he is seeing farmers who are having serious financial problems. “I’ve been doing a lot of appraisal work trying to help some farmers restructure their debt, which is going to be harder and harder to do because a lot of their equity has been eaten up over the last few years because of the poor farm economy,” Slack acknowledged.
Slack says both old and young farmers are struggling.
“There are some young farmers who don’t have the equity to survive, and there are older farmers who getting stressed out and have been burning their equity, who have now decided it’s time to get out. Some are just at the age where it’s time to retire,” he added.
Good used machinery that’s been well maintained has been bringing good money even through the COVID-19, according to Slack. “The new stuff is so high and if they can go to an auction and save themselves $10,000 or $20,000, that’s what they’re doing. If it’s good quality, even if it has some age to it, and is well maintained it’s going to bring good money. But good, clean machinery is getting harder to find.”
Slack is seeing buyers from all age groups. “Maybe the older generation is buying for the younger generation to help them farm,” he surmised. “But I’m hoping that some of the younger farmers can make it through these current bad times and survive, because otherwise I don’t know who’s going to be farming 20 years from now.”
Like other auction companies, Slack is expanding his approach to farm auctions. “We have people bidding online but we’re encouraging people to come to the site a few days before the sale, look at the machinery, and then bid online from home.”
Along with the other online platforms, Slack is also using HiBid.com. “We’re expanding the use of these tools as we continue to do business and keep buyers safe.”
Tim Slack Auction & Realty (email@example.com/608-723-4020)
Online bidding a boon to auction sales
Rocky Olsen, co-owner, of Premier Livestock & Auctions, saw a decrease in auctions early in the spring. “There was hesitation with COVID because of price problems, plant closures, and supply chain issues,” he said.
Right before COVID-19 hit, the company was gearing up to do more Internet sales. “We had online cattle sales ready to go when COVID hit, and that was hugely beneficial to us,” he said.
The company conducts primarily livestock and machinery auctions. “Livestock prices have picked up thanks to the government programs,” Olsen noted. “Farmers are getting FSA checks, and with forecasted higher milk prices, demand for dairy replacement cattle has shot up.”
Premier Livestock & Auctions sells cattle on cattleusa.com. “As far as I know, we are one of only two sale barns in the state that offer Internet bidding on livestock,” said Olsen. “We had a huge turnout of Internet buyers at our recent auction.”
Feeder cattle, dairy cows and dairy heifers are sold during online auctions. “Most of the buyers are looking for dairy replacements. A lot of farmers sold their heifers because of the cash crunch, so they don’t have their own replacements, and they’re coming to us to buy mostly fresh cows and close springers,” he reported.
Olsen emphasized that prices also are up now for good quality used machinery. “We’ve had machinery sales where prices have been extremely strong. Our machinery auctions also are online, at www.equipmentfacts.com, so we’ve been getting guys from 13 states as well as Canada and Mexico bidding on equipment, and we’ll have another machinery sale on Aug. 7.”
He noted that some of those selling machinery just need extra cash, and are selling equipment they haven’t been using. “Most of the equipment at our machinery auctions comes from farmers who’ve discontinued their dairy operations, sold their farms and now need to sell their equipment,” he said.
While Premier Livestock & Auctions has expanded its online presence, “We continue to have live bidding and Internet bidding on both machinery and cattle,” Olsen stressed. He can be reached at 715- 721-0079.
Premier Livestock & Auctions (715) 721-0079 premierlivestockandauctions.com
Weathering the changes
Gregg Miller says his business has weathered many changes and different stages this year.
“Initially we were all just wondering what we could do as we faced the fear of the unknown. But as the weeks went by, farmers adapted more to the virus, and their attention shifted to survival in light of the low prices for grain, meat and milk," said Miller, owner of Miller n' Company. “From our auctions we knew that money was really tight, with a lot of farmers needing short-term credit. It was as tough economically as I’ve seen in over 30 years of selling,” he said.
At the beginning of the pandemic, regulations limited the type of auctions that could be held. “There were a lot of good retirement sales that we had to postpone for quite some time. We only got to hold two types of auctions: Estates, where someone passed away and those where there was a need to disperse the cattle due to dire economic circumstance,” he said.
Currently, Miller is conducting simultaneous auctions that are both live and online. “We’ve done that for sometime. I’m not the greatest fan of online-only, but we’ve learned a lot from them during the last couple of months.”
But most of his sales still come from in-person bidding. “Out of every $100 in sales about $15 comes from online bidders, with the rest from people on the grounds,” he said.
Machinery sales include a mix of large modern equipment, as well as equipment from the typical family-size farm. “Some equipment can be used by large farms or hobby farms, but sometimes there’s just too much of it, and some of it doesn’t fit anywhere,” he explained.
Machinery buyers are coming from all segments of farming, according to Miller . “Large operators, with the hours they put on machinery, are looking for high quality because they use up the equipment fast. Even the smaller farmers who can’t afford new machinery, or are finding limited good clean equipment on the dealer lots are buying at auctions. I think everybody is a buyer right now,” he said.
Miller says they are also seeing steady cattle prices because there weren’t many auctions supplying the demand earlier in the year. “When we have good cattle for sale, we have buyers. But in a typical dairy herd, the cattle are really sorted hard. A high percentage of the herd doesn’t make it for replacements. They end up going to slaughter because the dairy producer who’s buying needs a young high-producing cow and is very selective about what he buys.
“There’s still a lot of stress on everyone involved from the farm family to the auction company,” he added.
Miller emphasized the need for farmers, auction companies and the agricultural media the keep the lines of communication open.
“It’s good that someone is writing about it and farmers can read about it,” he remarked. “When farmers get together on auction day, sometimes it’s therapy more than anything else.”
Miller ‘n Co. Auctions (millernco.com) 920-980-4999