Kaleb T. Cattleman has been considering whether there is any advantage to selling his feeder steers in the video auction over selling at the auction in Longhaul, Wyoming, 200 miles away. This year he sold his cattle at the Longhaul auction barn. Kaleb has a neighbor who used a video auction. He has asked his neighbor to provide specifics so he can compare net prices after marketing between the auction and the video auction alternatives. Longhaul Auction Kaleb sold his steer calves in October. They averaged 550 pounds before he shipped them to the auction. He got $161.69/cwt for them. Longhaul charges $13.50/head for calves under 999 pounds for commission or market charges. Other costs include - Brand Inspection= $1.50/head ; Health= $0.30/head; Predator Board=$1.00/head; Beef Check off=$1.00/head Insurance=$0.76/head; Yardage=$2.50; Feed= $2.56. Kaleb hired the "We-Getem-There" livestock trucking company which charged $3.50 per loaded mile. They were able to get about 85 head on each truck. Total time spent weighing, handling and on the truck to auction was 8 hours (estimated physical shrink was 5.5%). The cattle received feed and water at the auction before being sold and gained back excretory shrink incurred on the trip or about 2% of what they lost in terms of physical shrink (for the worksheet use the net shrink, i.e., physical minus what the cattle gained back). Video Auction - Alternative 1 Widow Lonesome sold her steer calves on the Wild West video auction for $161.50/cwt in March for October delivery. The calves were contracted for an expected average weight of 525 pounds with a slide of $0.15/cwt for every pound over an average weight of 540. The cattle were weighted on certified scales and sold free on board (FOB) at the ranch. When trucks came to pick up the cattle they averaged 542 pounds. The cattle were sold with a 3% pencil shrink. Other costs for this alternative included: Filming fee $3/head; Commission at delivery=$10/head; Brand Inspection= $1.50/head; Health=$0.30/head; Predator Board= $1.00/head; Beef Check off-$1.00/head. (Note: to see if price is reduced by the slide, you must first calculate what the payweight of the animals are after the pencil shrink. If the shrunk weight is below 540lbs., price slide is not invoked. If the shrunk weight is above 540 the slide is invoked as presented above). 12 pts. 1. First, use the attached marketing worksheets to work through the revenue and marketing costs for each of the marketing methods. The end calculation of the worksheet gives you a net price per hundredweight (cwt) after marketing. Per head basis Marketing Worksheet - Livestock -Method: Longhaul Auction Gross Revenue per head Amount or Number 1. Price (S/CWT) 2. Average weight (CWT)-(average weight in Ihs. 7100) 3. Gross Revenue per head = (line 1 X line 2) Enter Item 3 in this box Marketing Costs 4. Transportation Costs 1. Rate per loaded mile) b. (# of miles hauled) c. (total transportation costs) = (item 4.a X item 4.b. d. (of head per truck) c. calculated transportation cost per hd. - (item 4c/item 4d) Enter Item 4.e. in this box 5. Shrinkage i Pencil b. Negotiated Percent (enter as decimal c. Average lost payweight from shrink per head = (Item 2 X Item 5.i.b.) d. Cost of lost payweight = (item 5.1.c X item 1. Price) Enter item 5.i.difpencil shrink applies in this box ii a Physical b. Net Physical Shrink Percent (enter as decimal) c. Average lost payweight from shrink per head = Item 2 X Item 5.1.b) d. Cost of lost payscight = (item Sic X item 1. Price) Enter item 5.id if physical shrink applies in this box Enter item 6. in this box 6. Commission (fee per head or % X 3. Gross Rev per hd) 7. Brand, Health Fees (per hd. Enter item 7. in this box 8. Insurance (S/hd) Enter item 8. In this box 9. Checkoff (S/hd) Enteritem 9 in this box 10. Feed Enteritem 10 in this box 11. Predator Bd. (per hd Enteritem 11 in this box 12. Yardage (per hd.) Enter item 12 in this box Enteritem 13 in this box 13.Net Revenue per hd after marketing =3-4-5-6- 7-8-9-10-11-12) 14. Net price per CWT after Marketing (item 13/item2) Enteritem 14 in this box Marketing Worksheet - Livestock - Method: Wild West Video Auction Gross Revenue per head Amount or Number Per bead basis 1. Price (S/CWT) 2. Average weight (CWT)(average weight in lbs. 7100) 3. Gross Revenue per head - (line 1 X line 2) Enter Item 3 in this box Marketing Costs 4. Transportation Costs a. (Rate per loaded mile) b. (of miles hauled) c. (total transportation costs) (item 4a X item 4b d. (# of head per truck) c. calculated transportation cost per hd. - (item 4c/item 4d) Enter Item 4.e. in this box 5. Shrinkage in Pencil b. Negotiated Percent Center as decimal c. Average lost payweight from shrink per head (Item 2 X Item 5.1.b. d. Cost of lost payweight = (item 5.i.c X item 1. Price) Enter item 5.i.d if pencil shrink applies in this box 11. a. Physical b. Net Physical Shrink Percent (enter as decimal) c. Average lost payweight from shrink per head (Item 2 x Item 5.1.b.) d. Cost of lost payweight (item S.i.c X item 1. Price) Enter item 5.ii.d if physical shrink applies in this box + Enter item 6. in this box 6. Commission (fee per head or % X 3. Gross Rev per hd) 7. Brand, Health Fees (per hd.) Enteritem 7. in this box 8. Insurance (S/hd) Enter item 8. In this box 9. Checkoff (S/hd Enter item 9 in this box 10. Feed Enter item 10 in this box 11. Predator Bd. (per hd Enter item 11 in this box 12. Yardage (per hd Enter item 12 in this box Enter item 13 in this box 13.Net Revenue per bd after marketing --3-4-5-6- 7-8-9-10-11-12 14. Net price per CWT after Marketing (item 13.ltcm 2) Enteritem 14 in this box 3 pts. 2. Write a short paragraph below advising Kaleb as to who got the best price after all the marketing costs were taken into account, and as part of your answer describe what cost categories were most important in affecting the outcome