University of California College of Agriculture Agricultural Experiment Station Berkeley, California The Dealer at California Livestock Auctions by Edwin C, Voorhies September 1951 Contribution from the Giannini Foundation of Agricultural Economics Mimeographed Report No. 123 ^jjflVHtsiTY OF CAUPOWta LIBRARY ocuxECE OF Aca«aA-T\*" DA VIS Acknowledgments This publication is a portion of the California nhase of a study being conducted by the ^'Festern Live- stock J'farketing Research Technical Committee. The Comittee includes agricultural economics staff members of the agricultural experiment stations of Arizona, California, Colorado, Idaho, Montana, New Mexico, Nevada, Oregon, Texas, Utah, Washington, ^"'yoming and Hawaii, and a member of the Bureau of Agricultural Economics of the United States Depart- ment of Agriculture. Research is being conducted in the above-mentioned states and the territory of Havraii on four phases of livestock marketing in the Yiest. These include (l) an analysis of livestock auctions, (2) a study of costs and comparative prices and returns in moving western-produced livestock through various marketing channels, (3) trends in the western demand for meat in relation to the supplies originating in the western region, and (U) an analysis of methods and practices followed in the marketing of western feeder cattle. The research on which this report is based was made possible partly by funds provided under the Research and Marketing Act of 19U6. Varry persons furnished information and data which enabled the writer to carry out this portion of the livestock auction study. The operators of 15 California livestock auctions made available all available data on sales and purchases which were requested. Over 300 dealers furnished a considerable amount of the informa- tion analyzed in this publication and, of these, 15U were interviewed in person. The results of these latter intervievfs constitute the body of the data from which the results set forth in this report are derived. Without the cooperation of these dealers this report would not have been possible. The interviews vere conducted largely during 19$0 by Nathaniel S, Mewhinney, then Assistant Specialist in Agricultural Economics, who resigned June 30, 1951. I The Dealer at California Livestock Auctions i f by 1 Edwin C. Voorhie Introduction and Background This study vas undertaken as part of a research project in the marketing of livestock in the 11 Western states, Texas, and Hawaii (see Acknowledgments). Very early in the livestock auction analysis, it became evident that the dealer — after the farmer or rancher — accounted for the largest share of live- stock a^^ction patronage. Approximate l;sr one-fourth of the consignments to and one-third of the purchases from auctions if.ere transacted by the dealer group in the Pacific Coast and Mountain states. The same relative position on the livestock auctions in Texas was held by this group. 2/ Prom a sample of IS auctions (fig. l) in California, the percentage of livestock sold by types of sellers and buyers in 19hQ is shown in Table 1. The combined sales of these totaled $28,729,000. Over 28 per cent of the consignments were m.ade by dealers since those in categories 2, 3» h, 5, and 6 of Table 1 were operating mth licenses for dealers, commission merchants, cash buyers, or brokers (see p. i;). The percentage of purchases made by those with such licenses probably was greater as a very considerable number of those in category 7 — ^butchers, slaughterers, packers— have licenses to buy and sell livestock. Characteristics of Dealers The concept that the livestock dealer is an independent operator buying and selling livestock for profit is somewhat inexact and inaccurate. No sharp boundaries can be set up which will readily encompass the livestock dealers of California. They are not members of a homogeneous group. Charac- teristics, among others, in which dealers differ include type of business, legal status, size, supplementary and complementary enterprises, range of connections, geographical location, etc, IMle these are only a few of the characteristics which place different dealers in diverse categories, it is believed that a description of these differences mil lead to a better under- standing of the place Virhich the dealer occupies in livestock marketing. The core of the study which has been conducted by the Western livestock Marketing Research Technical Committee was the auction. Ovang to delays in obtaining data plus the fact that the information furnished by dealers was readily available, it seemed desirable to renort on the results of the California dealer phase of the larger study. Nevertheless, to focus attention 1/ Professor of Agricultural Economics, Agricultural Economist in the Experiment Station and Agricultural Economist on the Giannini Foundation of Agricultural Economics, University of California. 2/ McNeely, John G. , and Charles B. Brotherton. Livestock Auctions in Texas . Texas Agr. Exp. Sta. Bui. 732, 19?1, p. 26. The Texas publication is a part of the results of the study conducted by the "lestern Livestock llarketing Research Technical Committee. 2. : FIGUBE 1 I Livestock Auctions* California 1948; Headquarters of Dealers in Study TABLE 1 Percentages of Livestock Sold and Purchased by Types of Sellers and Buyers at California Livestock Auctions, 19k& Types of sellers and buyers Cattle Sheep 1 Hogs Horses All classes Seller Buyer Seller Buyer Seller Buyer Seller Buyer Seller Buyer 1. Rancher, farmer, X C C LL^ X 69 35 79 kk 86 32 73 40 70 35 2. Livestock dealer or truck buyer 20 19 Ik 20 7 25 18 k9 19 19 ■3 J • nnpTfttoT* nf auction at which sold or bought 7 2 3 2 5 2 k 2 7 2 k. Auctioneer or employee 1 a/ ^/ 0 a/ a/ a/ 0 1 a/ 5. Operation of another auction 1 h 3 2 a/ 1 3 3 1 3 6. Order buyer k 0 5 0 6 0 0 a/ 7. Packer, slaughterer, butcher a/ 36 a/ 27 2 3k 1 ^ 1+ a/ 37 8. Other than above 2 a/ a/ a/ a/ a/ ! I i 2 2 a/ All types 100 100 99 100 100 1 100 L. ... . 100 100 100 100 a/ L«ess than 0.5 per cent. only on dealer-auction relations vroulri lead to a one-sided view of the trader anc- his operations. Some dealers operate on livestock auctions, a very considerable number trade on auctions at times while others have never patronized them. V/hile the sample was nra^Tn from dealers operating in the vicinity of livestock auctions (p. 5 and fig. 1), it seemed to be highly advantageous to analyze the total procurements and sales of livestock by the dealers (p. 9 )» dealers' consignments to and purchases from livestock auctions (p. 20 ), dealers' handling policies (p. 15), and order buying by dealers (p. 18). Dealers are known by a wide variety of designations, some of which are related to functions performed — calf buyers, cov; dealers, order buyers, etc. The method of settling transactions often is the basis for characterizations such as cash buyer, credit buyer, commission merchant, etc. More general designations are dealers, country dealers, local dealers, traders, scalpers, hucksters, speculators, etc. The livestock dealer is not a newcomer in the marketing field. His pre- decessor was the drover who either bought livestock from ranchers or farmers and drove the stock to market or who Derformed the driving function for several producers. Legal Status. — California passed a Produce Dealers Act in which is related to "the handling and sale of farm products in fresh condition" includ- ing livestock. Not all states have legislation of this t^rpe. Even in states where regulations exist there is often confusion and misunderstanding in different sections as the rules set up vary in the different states. Traders and dealers cross state lines, and increased truck use on improved highways, population shifts, livestock production changes, etc. increase the probabili- ties for a more frequent crossing of state boundaries. Certain methods of transacting business are recognized in the California Actfk/ licenses being issued for commission merchants, dealers, cash buyers, and brokers. A brief description of these categories for California follows: 1. Commission merchants contract for, solicit, or receive livestock from producers for sale on commission or are those handling the proceeds of such sales, 2. Dealers buy, contract for, or obtain possession or control of live- stock from producers and resell such animals. They make payment on a deferred basis — namely, by check, draft, money order, cashier's check, or other commercial paper. In some states such a person is known as a "credit buyer," 3. Cash buyers purchase livestock from producers for resale and pay in full at time of purchase with cash, coin, or currency. No personal checks, cashier's, or other commercial paper are used to pay for livestock purchased. 3/ Colorado adopted somevrhat similar legislation in the same year, h/ State of California Agricultural Code, 19h9 : h39-hSl . i 5 li. Brokers are recognized as persons or firms negotiating deals between producers and commission merchants, cash buyers, dealers, or other producers. They are not permitted to handle the money or the livestock, only arranging transactions between interested parties. In this state persons are often called "brokers" vrho may handle an entire dairy or beef cattle enterprise transaction, property (real estate), cattle, machinery, etc. Such persons can be comnared ivith real estate brokers. The broker is not synonymous with the order buyer. The latter may be, and in some instances is, a broker, hut many order buyers would be classed as commission merchants and/or dealers. In addition to the licenses required to operate in the above-mentioned categories — special licenses are issued to agents who act for, and in the name of, cash buyers, dealers, brokers, or commission merchants in buying, soliciting, receiving, or contracting from producers. Agents in some sections are particularly active in obtaining consignments for livestock auctions. They often form important links in interstate livestock movements, e.g., a considerable number of agents purchase livestock in the other Western states for California firms. There are exemptions from licensing such as (a) persons dealing in live- stock at a public livestock market only and under a United States Bond, (b) licensed slaughterers unless they slaughter on consignmtmt or purchase live- stock for resale in live condition, (c) oroducers selling the livestock v;hich they have raised or buying stock for their own use. More than one license can be held by an individual or a firm. In 1950 the annual fee for a license as comrnission merchant, dealer, cash buyer, or broker v/as set at $hO while agents naid $2, 50. Surety bonds vrere required of the commission merchant (ift^jOOO) and the dealer (|1,000). The Dealer Sample . — To obtain information on dealers' characteristics and oD'^rations, a sample was draivn from those trading in the vicinity of the Cali-fornia livestock auctions which had been selected for study (fig. 1). The ma.iority had traded on auctions in their localities. Although the attempt was made to secure data from independent traders buying and selling livestock, a number of those vd.th aiiction connections (table 1 — categories 3j h, 5) as well as a few in other categories v/ere included in the sample. Interviews were obtained with iSk California dealers, and cooperation was excellent. The absence of qiiestions related to finances ivas a factor which militated toward success in obtaining records. A number were sufficiently interested so that records were compiled direct from their accounts, but most data were based uioon estimates. The interviewed traders furnished information which forms the basis for the greater part of the study. In addition to the l$k already mentioned, incomplete data vrere obtained from 168 additional traders. All reported having headquarters (in some cases only a mailing address) within California. Dealer Numbers . — The sample of dealers represents those whose headquarters were located in the vicinity of livestock auctions — in most cases within a radius of SO miles of the 15 auctions which were studied in the broader auction 6. study under way (p. 1). The data obtained from these dealers should not be interpreted as representing dealers' activities in the entire state or in any section. It is believed that insofar as livestock auctions are concerned, the information obtained depicts rather clearly the part which dealers play in auction transactions. The data are for 19U9 and it is highly probable that the activities of no tvro years would be identical. During the course of the study the question frequently arose relative to livestock dealer numbers. Y-Tiolesale handlers of "all fruits, vegetables, wool, pelts, furs, rabbits, poultry, eggs, honey, cut flowers, hay, grains, beans, and other agricultural cotniP.odities" must obtain licenses in the same manner as those who deal in livestock. In checking state licensesV for 19U8 it vv-as indicated that there were probably about 1,000 licenses in effect for the livestock handlers acting as commission merchants, dealers, brokers, cash buyers, and an additional number of agents operating under the principals oust named. Omitting duplications of those holding one or more licenses, e.g., packers and slaughterers who are generally licensed as dealers and/or commis- sion merchants or brokers, commission houses on terminal markets, auction operators whose T>rincipal business was the auction, and order buyers in the employ of Packers and slaughterers, it was estimated that there were about livestock dealers operating at the beginning of 19U9. It is highly probable that there were, in addition, approximately 200 agents of the persons or firms listed buying and selling livestock. Backgrounds .— The livestock trading experience of the interviewed dealers varied — the previous period spent in trading ranging from a few months to over 60 years— with an average of slightly less than 12 years. Generally, the dealer was experienced in trading, usually well informed on market conditions, and a seasoned livestock judge. Farming (or ranching) had been the previous occupation of 70 out of 1^2 while 29 had started their careers as dealers. Packing, butcliering, or slaughtering were the previous occupations of 18 while five had been associated with transportation. Auction operation had claimed the attention of three while two had been brand inspectors, '^/hile some arbitrary decisions have doubtless been made, it would appear that only about one-sixth of the group had been in nonagri cultural pursuits before engaging in trading. These latter occupations ranged from dentistry to real estate. Principal Business .— information was obtained from 30U dealers on what they considered their principal business or occupation. Over half (l5U) named livestock dealing. (Of the l^h from whom all data were obtained /p. 8_/ , the number was 78 or a little under 50 per cent.) About one-fourth (26 per cent) named farming or stock raising. From all indications this percentage was smaller than that obtained in the regional study which extended into six states. The chief Pursuit of 19 (6 per cent) was in connection ?ath an auction— operator, owner, accountant, auctioneer, etc. Ten were engaged principallv in vAolesale butchering and slaughtering while nine were connected with transportation (e.g., truckers buying and selling livestock); eight were 5/ Licenses issued in 19h8 (and 1950) for handling agricultural products totaled 11,062 (ll,95li). Division was: dealers, U,008 (U,17li) J brokers, 1,1 (l,hl7); commission merchants, 963 (1,2^7); cash buyers, 710 (826)j agents, 3,979 (U,280). I ■ r : 7 in real estate while 11 sold other apricultural commodities, e.g., hay and grain. Tvo or three specialized in buying and selling dead and crippled livestock. A few (.five) had partially retired from dealing in livestock and stated that they were earning a little or in order to keep busy. Other principal occupations given included law, warehousing, food lockers, lumber dealer, hardware, reduction plant owner. The large number of supplementary and complementary enterprises involved makes it extremely difficult — if not impossible — to draw sharp and distinct divisions betv/een activities. This lack of clarity can be seen in practically all sections of the analytical phases of this study. A few examples perhaps will be sufficient to indicate some of the difficulties involved. Farming and trading as shown above are most frequently supplementary and complementary enterprises. A person with two such occupations might be listed as a farmer or as a dealer. A considerable number of butchers hold licenses as dealers so that such a person might logically be placed in two different categories. Time Spent in Trading . — About $0 per cent Ok of 150) spent the entire time in trading. Only one-fifth (31) estimated spending less than half time in trading. Indications point to fewer part-time livestock traders in California than in other parts of the ITest. Year-round operations were carried on by lh3 out of 1$3 (93 per cent). In the states to the east a far smaller proportion operated all year. Although interpretations may be somewhat arbitrary, it v.'ould appear that California "seasonal traders'" busiest periods are in the spring, summer, and fall. There are some notable exceptions as in some sections (Imperial, Coachella, Palo .Verde valleys) buying and selling is restricted in the hot, summer months Transportation . — Trucks were operated by about half (^h per cent) — a smaller relative number than seems generally to be the case in the West. Those operating trucks picked up livestock at famns, auctions, and elsewhere, often delivering to and transporting from sales. Several auctions ovmed and operated trucks which in many instances were important business assets and in some instances obviated the necessity of dealer truck operation. In other situations dealers did not operate trucks even though they might have had regular places of business including facilities for handling livestock. Several such traders disposed of purchases to packers, butchers, or to others and arrangements were made Td.th others for transportation. One-hundred-and-twelve trucks were operated by 83 California traders — an average of only one and one-third trucks per dealer. Custom trucking was done by only eight of the l^k dealers — in terms of those operating trucks, eight out of 112. Only lii trucks v;ere operated by these eight dealers. In California, custom trucking necessitates a public carrier's license or a permit, and many do not do such work for these and other reasons. 6/ Certain auction operations were discontinued during the summer months. 8. Auction Connections . —Only 13 of the iSh dealers had auction connec- tions. This percentage (8 +. ) is probably lov^ as an effort was made to omit those who ovmed or operated livestock auctions. It is probable that from 15 to 20 Tjer cent of the dealers were connected in some way financially vath auctions. This latter judgment is based upon returns obtained from other Western states. Of the 13 California "connections," one vras a partner while another v-as the manager. The remaining 11 were four auctioneers, four ringraen, one agent and two others. Size Q-f Operations . — Criticisms are made frequently of the small opera- tions of individual traders. Small size is condemned because such an operator often does not possess capital to move livestock, let alone purchase and hold it. Small volume, it is contended, has a tendency to increase pressure for "cutting comers." Doubtless, some criticisms can be substan- tiated as a few have been forced out of business for failure to pay for stock. I'^Thether this situation was brought about by volume of operations is open to debate. On the other hand, claims have been made that large dealers dominate certain auctions or that specific traders' operations hold down prices, etc. Many California traders operate without any physical headquarters other than a mail address; indeed, some ^veil-informed persons believe that the majority so operate. ^Mves in many instances keep books at home. On the other hand, a few dealers handle thousands of head involving exchanges measured in millions of dollars. Some of the latter type have well-established headquarters with specialized assistants such as bookkeepers, accountants, etc. Livestock handled by the l^U operators in California ranged from 10 to upvrards of $0,000 head — expressed in marketing equivalents!/ with an average of 1,978 marketing equivalents. Some 27 per cent of the sample dealers xrere above the average in the number handled. (The median average was 829,) A clearer conception of the operation volume can be obtained from the following tabulation: Marketing equivalents Number of traders Per cent of total Under 2^0 28 18 250-h99 27 18 <00-999 30 19 1,000-1,999 28 18 2,000-U,999 29 19 5,000 and above 12 8 Total 100 7/ Marketing equivalents-rone cattle, three calves, ,10 sheep, four hogs. a-. 9. All of the preceding averages are somewhat low as a very considerable number of dealers bought and sold horses and mules. The latter classes of stock are not included in any of the above compilations. No dealer included specialized in horses. Such as were bought or sold were incidental to the main business. Considerably over one-third handled less than 500 marketing units during the year, a slightly larger proportion between ^00 and 1,000, and hi or over one-fourth over 1,000 head. Those who reported working full time with their main occupation as "dealing" (7U of l5h) handled an average (median) of 1,330 head. Livestock Handled by Dealers Volume . — All stock handled was reported in terms of beef cattle, dairy cattle, bulls, calves, sheep and lambs, and svane (table 2). No record was kept of horses handled. A somevrhat clearer operations picture is brought into focus when all livestock classes are converted into marketing equivalents. About 86 per cent of the 30Li,593 head (marketing equivalents) handled were cattle—beef cattle, dairy cattle, bulls and calve s~^^'hile sheep accounted for ^ per cent the total and svine trailed v/ith 6.2,/ The percentages vary but little from those obtained in a sample of over 35h dealers scattered throughout the Western states except that calves, sheep, and swine are slightly higher in the California returns. The lh5,000 beef cattle ma.de up hi per cent of the total vrhile about 2h per cent of the turnover was represented by 72,000 dairy cattle (table 2). A large number of the California traders handled dairy cattle (table 3). The dividing lino between beef and dairy cattle is indistinct — in fact, in many instances an animal cannot be designated as a beef animal or a dairy animal (see p. 13). Generally, however, there is a considerable difference betvreen the proportion of dealers' beef cattle handlings on the Pacific Coast and in the Mountain states. In the returns from some of the states contributing to the regional study, e.g., Wyoming, dealers operating in the vicinity of livestock auctions bought and sold very few dairy cattle. About four-fifths of all traders handled 112,000 calves. The larger number of traders in the "calf business" was partly accounted for by calves so frequently being a "by-product" for dealers handling dairy cov;s. Such a situation occurs largely in areas of heavy dairy cov/ concentration. In the Los Angeles milkshed a large nvmiber of the calves go onto the veal market and some into reducing plants, A number of these animals are handled by the dairy cow dealers v/^hile still others are handled by specialized traders often purchasing regularly from dairymen and selling to packers or reduction plants. The total of bulls handled was small and only a few were bought or sold per dealer, yet 68 per cent of the group had dealt with the animals in 19U9. In the "Western states' sample some 70 per cent handled bulls. 8/ The value of the different classes of livestock by the 15 auctions represented in Table 1 was: cattle, 89; sheep, U; hogs, 6j and horses, 1 per cent. •vxi 'io '■9 ..er cent). The latter, in a large measure, v/ere \itilized for replacement and further feeding. Hog Soi^rces and Outlets . — ^As with calves, the principal source was the auction (table U) followed closely by the farmer. Public markets contributed less than one-tenth. Packers, butchers, and slaughterers took almost three-fifths (58 per cent) while another fifth (21 per cent) of the hogs were obtained by farmers and feeders, most of the latter being utilized for further feeding rather than for replacement. Public markets received about one-seventh (lU per cent) while auction markets vrere the destinations of only a minor percentage (h per cent — see table 5). Handling Policies of Dealers Estimates were obtained from the 15U traders on the percentages of all animals purchased (1) disposed of within a vreek's time or (2) held for a longer period. The manner of holding (pasture or dry feed) was ascertained (table 6), The year was one of relatively high livestock prices and this undoubtedly had an effect upon the length of time animals were kept. Atten- tion is also called to the large number of farmers v^ho arc also dealers. These persons often purchased for their ovm use. About two-thirds (65 per cent) of the beef cattle vras estimated to have been sold within a week of purchase. This proportion was uniform in the three Pacific Coast states v4iere a somewhat slower turnover was indicated than in the states t^> the east. About two- thirds of the animals retained for more than a week vrere placed on pasture while the remainder vras kept uoon dry feed. Dairy cattle was kept for longer periods. Slightly over half {Sh per cent) was held for over a week. Southern California operators reported only about one-tenth of their purchases being sold v^ithin seven days. 9/ Voorhies, Edwin C, and Robert W. Rudd. Sheep and Wool Situation in California, 1950 . Calif. Agr. Exp. Sta. Circ. 399, 1950, pp. 1-50. 10/ Western Livestock Marketing Research Technical Committee. Shifts in the Trade in Western Slaughter Livestock . U. S. Dept. Agr, Inform. Bui. Hi, 1950, pp. 1-67. L TABIE 6 Dealers' Handling Policy for Livestock (Per Cent of Stock Handled) Livestock class Resold T/ithin iTeeks Held on pasture Held on dry feed Beef cattle 65 23 12 Dairy cattle U6 26 28 Calves 9U 1 Bulls U2 h Sheer) and lambs 73 27 a/ Siirine 86 1 7 7 a/ Less than 0,5 per cent. 17. Several reasons apoarently account for the slower turnover of dairy cattle. Numerous animals are brought in from more distant areasll/ and there are stringent rules in the receiving territory relative to tuberculosis testing. It is probable that the pressure to sell dairy animals was not so great as with beef animals. The latter are largely sold on a v/eight basis and probably values would change more rapidly. In some of the highly developed milksheds, considerable time was spent in making the animals as attractive as possible prior to sale. Many dry cows were held until they could be sold as springers or as fresh cows. In some market milk areas the sale method (special sales berne and special dairy auctions) and a lack of pasture make it imperative to place a large nroriortion of the cows awaiting sale on dry feed. Almost all (9h per cent) of the calves handled were sold within a week of purchase. A large percentage vrere "day-old" or "dropped" calves, and one result is that the dealer attempts to get these animals off his hands as soon as possible. The small percentage ([t2) of the bulls sold within a week of purchase differed materially from that reported from other states participating in the regional study. An examination of the records indicates that between UO and So per cent of the bulls had been on a "loan for growth." Another practice partially accounts for the low percentage. Several dealers stated that they were renting bulls to dairymen before selling them. Many other reasons vrere perhaps present — as in the case of dairy cows — which served to lengthen the period during wliich bulls v'ere kept. Many would wish to condition animals before selling. A very large proportion of the bulls retained for more than seven days was placed on pasture. About three-quarters (73 per cent) of the sheep and lambs were disposed of within a week of purchase. Of those retained for a longer period, practically all were kept on pasture. An appreciable number of those retained for longer periods were kept by the dealers on ranches operated by them. Less than lU per cent of the hogs purchased were held for over a week, . These were placed in approximately equal number on pasture and dry feed. Some dealers have farms (p. 6) operated in connection with their trading operations while a number without farms have holding pens. Numerous Coast dealers have contracts for "garbage hogs" for which heavier feeders are desired. Often, dealers buy hogs when able to do so and hold them on feed until the desired size is obtained. Most of the animals found a market fairly close to where they were produced, TThile a very large number of swine arc shipped into the state, these were not handled by the 6U interviewed dealers. i±/ 11 / Voorhies, Edwin C, and Nathaniel S. Mcv/hinney. "Dairy Cow Replace- ments." C alifornia Agricultu re, vol. U, 1950, !ip. 12/ Western Livestock Marketing Research Technical Committee. Op. cit . , pp. 1-67, Oc. V.*.' 18. Order Buying In addition to buying and selling livestock for their ovm account, many traders act as "brokers" in transferring title to livestock (p. There are, of course, variations in this type of transfer transaction. Such stock may be bought on order for individuals or firms, packers, other dealers, farmers, feeders, etc. Rirchases are usually made from commission firms at public markets or elsewhere from "other dealers," fanners, livestock auctions, etc. Such stock may be destined for immediate slaughter, stocking, or feeding. Often a commission is charged for the service. Sometimes, especially in the case of dairy cows, a flat fee per animal is the rule. Many order buyers often do purchasing by long distance phone or vdre. An effort is made to purchase animals of a definite grade or quality. There has been a rapid increase in this type of biiying, particularly in the animals (both meat and dairy) v^hich have been routed v:estward to the state. Of the 15I4 traders operating in the vicinity of livestock auctions, 35 (23 per cent) did order buying (table 7), From available data indications are that the proportion is higher in the Great Basin and Mountain states. There is a tendency for the larger operators to carry on this type of buying. Although the number of dealers bujang on order is not large, many of the data obtained for California operators check closely with those from other states in the regional study. More operators did order buying with beef cattle than with any other livestock class, and the actual volume of stock (measured in marketing equivalents) xvas far larger. Over one-quarter (26 per cent) of all animals were sold on order. For the Western region as a whole, there were more order buyers and a larger proportion of the beef animals was sold in this manner. Farmers, stockmen, and feeders took the largest part of purchases, about three-fifths being ordered by this group and the other two-fifths by packers, butchers, slaughterers, etc. (table 8). Only 11 of the iSh dealers stated that they had handled dairy cattle on order during 19J-i9, and only 5 per cent of total dairy cattle sales were made in this manner. Annroximately two-fifths of the dairy cattle orders were placed by farmers (table 8) while an equal number originated with other dealers. Numerous replacement animals for the intensively driven market milk sections are purchased by traders for other dealers. This occurs not only in the state but in other Western states. About one-sixth of the order for "dairy cattle" originated with slaughterers. About one-seventh of the calf dealers purchased calves on order and these disposed of a little less than one-third in this manner (table 7). Packers, slaughterers, or butchers placed orders for the bulk (86 per cent) of the animals so sold vdiile farmers took the remainder (table 8)-. Relatively few had orders to purchase bulls. For these the larger part was for the account of slaughterers, butchers, or packers. Only a few (10 per cent) were ordered by farmers. TABLE 7 Order Buying of California Dealers Number Per Cent of sales on order livestock class Total Buying on order Beef animals 96 22 26 Dairy animals loU 11 5 Calves 123 18 3U Bulls 105 12 9 Sheep and lambs 5U lU 57 Hogs 52 9 28 Total I5h 35 TABIE 8 Sources of Orders for Buying Livestock (Data Are in Precentages of Total Order Sale) Livestock ; class Packers | Farmers others Beef cattle 39 60 1 Dairy cattle 17 hi 1x2 Calves 86 lU y Bulls 87 10 3 Sheep and lambs 36 hi 23 Swine 90 0 10 a/ Less than 0.5 per cent. 20, I'fhile only one-quarter of the dealers of sheep and lambs purchased on order, they handled almost 60 per cent of the animals in this manner. These results are similar to those obtained in other sections of the Western region. These traders were usually highly specialized, handling usually only the one class of stock. Approximately tv;o-fifths of the orders of the traders originated vdth farmers or feeders, a like proportion with slaughterers or packers vrhxle the remainder originated v;ith "other dealers." Only about one-sixth of the hog dealers handled on order, but these accounted for over one-fourth of the sales (tables 7 and 8). In the region, order buyers were likevase few in number. Most of the hop orders vrere placed by butchers or packers; only about one-eighth vras purchased for the accounts of farmers and others (table 8), Auction Transactions of Dealers The sources and outlets of all livestock handled by dealers operating in the vicinity of livestock auctions were discussed in a previous section (p. 9 ), Since the core of the state and regional study is related to livestock auctions (p. 1 ), the par't the trader plays in consigning to and purchasing from auctions was given special attention. Although interviewed dealers v;ere operating in the vicinity of the sampled auctions, their trading in many instances extended to several auctions, many of the latter not being in the vicinity of the auction near v^hich headquarters vrere located. As already shown (p. 11), trading extended to many channels of trade other than auctions. Numerous dealers did not trade at auctions even though they had headquarters in the vicinity. In California 3h out of the 15U traders interviewed did not trade at any auctions in 19U9. Some stated that they had traded at auctions in previous years. Not all of those trading bought and sold, 86 having consigned stock and 108 having made purchases. With the exception of bulls, purchases were more numerous than consign- ments (table 9). The latter (expressed in marketing equivalents) were only three-eighths as numerous as the former. Expressed in another m.anner, the dealers rcTDorted that they consigned less than 10 per cent of the stock handled to auctions for disposal wliilo purchases made acco\mted for almost 25 per cent. This division into consignments and purchases varies materially from that indicated in the fountain states v;herc consignments were not only relatively larger but rp^ctions claimed a far larger relative proportion of both consignments and purchases. Fortunately, California traders were able to offer vAat is believed to have been fairly accia-ate information on the auctions at which they traded. Fifty-seven different auctions — 5U in the state and three others outside— were sales locations for stock consigned by 86 of the dealers. In contrast, 108 dealers made purchases at 82 different auctions— 6U within the state and 18 in six other states (fig, 2), During 19U9 individual dealers bought and sold on as many as 19 different auction?. The relative importance of consigning and purchasing can be shovm in a slightly different manner than that mentioned previously. The 86 dealers FIGURfi 2 Auctions at TWhioh 164 California Livestock Dealers Traded, 1949 Auctions from which dealers purchased livestock • * 1 auction TABLE 9 Dealers' Consignments To and Purchases of Livestock at Auctions Livestock class Consignments Purchases number Beef cattle h,h20 25,617 Dairy cattle 15,812 19,U01 Calves 8,761 53,011 Bulls 3,683 1,783 Sheep and lambs U,151 lii,938 Swine 2,767 33,90U Marketing equivalents of the above 27,9h2 7U,W;1 ,1 . i 23. making consignments used an average of four auctions for such disposals. These four were included in the 57 to y;hich consignments were sent. On the other hand, 108 of the group made use of an average of between five and six auctions (included in the 86 mentioned above) for purchasing stock. Over half per cent) of the dealers' auction consignments originated with farmers. "Other auctions" contributed over one-third (36 per cent). No other source contributed more than one-twentieth (table 10). Almost 96 per cent of all consignments (measured in marketing equivalents) were cattle— almost identically the same percentage as in the six states from which returns have been made available. Dairy cattle made up $7 per cent; beef cattle, 16; calves, 10; bulls, 13; swine, slightly over 2; and sheep and lambs, somevrhat under 2. In the states to the east, beef cattle consignments vrere of far greater relative importance while dairy cattle were of far less significance in the total. The proportion of bulls was far greater in California. Insofar as proportions of calves, swLne or sheep were consigned, there were not great differences between dealer's offerings in the other Western states and California. Outlets for auction-purchased livestock were more niimerous and varied than were consignment sources. If dairy cattle were omitted, it would be found that slaughterers, butchers, and packers received one-half of all the livestock purchased by dealers at auctions. Leaving dairy cattle in the summary, slaughterers, packers, and butchers still ranked first in the distjosition of stock purchased, the total percentage being U5 (table 11). Only a slightly lower total percentage (12) was sent to farmers, "other auctions," and public markets while the remaining 13 "oer cent was dispatched to "other dealers" or sent to sources other than those named. The outlet for the auction purchases by California dealers was different than that in the other ^Testern states, "other auctions" and public markets being relatively more important in the latter area. The farmer in this state occupied a more important place in outlets. Cattle occupied a relatively less important place in livestock auction purchases than in auction consignments even though the actual number of cattle purchased was almost two and one-half times greater than the total ^ auction consignments. Beef animals accounted for 3h per cent of the auction purchases; dairy cattle, 26; calves, 2U; swine, 11; bulls, 2; and sheep and lambs, 2 (expressed in marketing equivalents). Auction procurements of the California traders apparently are different than those of the Mountain states group. Purchases of dairy cattle, swine and calves appear to be less important for traders in the Mountain group while beef cattle are far more important. With sheep, Wyoming and California furnished most of the data, and numbers of animals are such that any compari- sons would be questionable. Tables 12 and 13 show distances stock vras moved from (table 12) the procurement location to the auction where consigned and (table 13) the auction at which the stock was purchased to its outlet. Information obtained previously from auction records used in the analysis of auctions and proce- dures was found to be unsatisfactory and unreliable for making analyses of the distances which dealers moved stock to and from auctions. It is believed that the "dealer study" herein presented remedies this defect. 2U. TABIE 10 Percentage of Dealers' Livestock Consigned to Auctions from Different Sources Livestock \ \ class Farmers other dealers Public marke ts other auctions Other sources Beef cattle 28 1 h 61 6 Dairy cattle Sh 3 2 35 6 Calves 53 2 39 6 Bulls 90 £/ 9 1 Sheep and lambs 82 i/ 8 10 Swine hi i/ kh 15 Total in market- ing equivalents 55 2 2 36 1 5 a/ Less than 0.5 per cent. TABLE 11 Percentage Disoosition of Dealers' Auction Purchases Livestock class Farmers Other 1 dealers Public j markets Other i auctions j Packers other outlets Beef cattle 25 10 Ih 10 35 6 Dairy cattle 19 9 17 29 23 3 Calves 2 1 3 6 75 13 Bulls 6 h 9 16 56 7 Sheep and lambs ih £/ 6 5 69 6 Svane 23 £/ 16 53 i; Total in marketing equivalents 17 i 6 12 13 U5 7 a/ Less than 0,5 per cent. li TABLE 12 Distances Dealers' Auction Consignments Shipped (All Data Are in Percentages) 1 . lavestock class Distances in miles Less than 25 25-99 100-300 Over 1 300 Beef cattle 52 UO < 3 Dairy cattle hi li5 9 h Calves 32 57 11 Bulls 87 12 Sheep 9 57 29 5 Sviine 32 56 12 Total in marketing equivalents hi . _ . . U2 8 3 a/ Less than 0.5 per cent. TABLE 13 Distances Dealers' Auction Purchases Shipped (All Data Are in Percentages) Livestock class Distances in miles Less than 25 25-99 100-300 Over 300 Beef cattle 13 33 lU ho Dairy cattle 35 36 19 10 Calves 23 5U 22 1 Bulls 28 53 11 8 Sheep 7 62 17 111 Sivine Ih U5 Ul i/ 1 Total in marketing j eqiiivalents 22 la 20 17 a/ Less than 0.5 per cent. 1 26. Only one-tenth (11 per cent) of the consirninents were moved over 100 miles while almost half (U? per cent) vias sent less than 2< miles to the auction. Purchases were moved far greater distances, almost two-fifths (37 per cent) traveling over 100 miles from the auction at which they were purchased to the outlet. Slightly over one-fifth (22 per cent) was shipped within a 25-raile radius of the auction at v/hich they were purchased. California is a "deficit" state in all of the major livestock products with the exception of turkeys, and this is one of the underlying causes for the difference between the distances "consigned" and "purchased" stock vras moved. Beef Cattle Consignments .— Only 3 per cent of the almost lli5,000 beef animals handled were consigned to auctions— far less, relatively, than in the other Western states studied, "vThile the sources of these animals are given, it would be erroneous to take the approximate proportions listed as being typical. Traders, making consignments, were among the smaller operators, and the average number per operator was lov;. Dealers estimated that over 60 per cent (61) had been obtained from "other auctions," Compared TAlth the other Pacific Coast states and with the Mountain states, this propor- tion is high. Scarcely half as many (28 per cent) v/ere obtained from stock- men or farmers. This latter percentage is lov^ v;hen comparisons are made between California neighboring states. One conclusion can be drawn from the data: "Other auctions" and farmers or stockmen were the two main sources of traders' auction consignments. In all states these two sources contributed anproximately 90 ner cent of all offerings. Among the other sources, that which occasions comment and criticisms in many quarters is the "sane auction," The statement is frequently made that a large number of animals go through the same auction ring several times. An attempt was made in this study to ascertain the number of animals consigned to an auction which had been obtained from the same auction. Similarly, data irere obtained on animals purchased at auctions v/hich had as an outlet the same auction. From the estimates made, slightly over 5 per cent of the beef cattle consignments had come from the same sales ring. Although numbers were too few to make positive assertions, available data indicated that consignments obtained from the same auction ring were more mamerous than in the other Western states in ¥;hich the study was made. Over half (^2 per cent) of the consigned animals v/ere moved from within a 25-mile radius of the sale (table 12) while two-fifths was sent from between 25 and 100 miles. Beef Cattle P\irchases .— While only 39 dealers reported consigning U,i|20 beef animals, 69 reported the purchase of almost 26,000 head. The latter represented a little over 18 per cent of the total handled.. Packers, butchers, or slaiighterers took over one-third (35 per cent) while farmers, ranchers, and feeders followed with one-quarter (25 per cent). Public markets received about one-seventh (ih per cent), "Other dealers" and "other auctions" each received slightly less than 10 per cent. The remainder (6 per cent) was disposed of through (1) slaughterers who custom killed for the dealer and others, (2) the dealers who yd shed to keep the animals, and (3) the same auction,. About 2 per cent of the purchased animals Tfere estimated to have been again sent through the same auction at which they had been purchased. 27. TTnlike consignments which were largely made to auctions fairly close by, purchases were disposed of at more distant points, over half (SU per cent) being moved over 100 miles (table 13). Dairy Cattle Consignments . — Daiiy cattle loomed l-arger than all other classes of livestock combined. Somewhat less than one-quarter (23 per cent) of all dairj' cattle was auction consigned and more dealers made consignments than vdth any other class. Farmers furnished traders mth over half i$h per cent). "Other auctions" furnished over one-third (35 per cent). The remainder (11 per cent) was obtained largely from dair;;;- cow sales, and a number had come from the sales ring to which they had been consigned. Two and one-half animals in every hundred were estimated to have been in this last-mentioned category. Consigned animals came to the auctions from nearby points, seven-eighths coming from vlthin a 100-mile radius of the auctions. In the few noved over 300 miles was dairy cattle from Arizona, Utah, Texas, Montana and Louisiana.. Dairy Cattle Purchases . — Auctions ivere utilized to dispose of over one- quarter (27 per cent) of the purchases while packers, slaughterers, or butchers claimed a light quarter (23 per cent). The public markets were the destinations of about one-sixth (17 per cent) v:hich would indicate that an additional number were bound for the block. Farmers vrere the pijrchasers of less than one-fifth (19 per cent), "Other dealers" obtained a small tenth (9 per cent) vAiile the remainder was disposed of through a number of channels. Among the latter outlets vrere 668 animals estimated to have been sent to the same auction ring for sale— about 3.5 dairy cattle in every hundred purchased at auctions. There is an indistinct division between "dairy" and "beef" cattle. Beef furnished by dairy breed animals is often underestimated by those accustomed to thinking in terms of Herefords, Aberdeen Angus, Shorthorns, etc. Among animals of the latter breed, some animals may not be placed in either a "beef" or a "dairy" category unless more information is available than that which was obtained from auction operators or from traders. This lack of homogeneity between dairy and beef animals is illustrated by estimates made of dairy breed animals passing through the Los Angeles Union Stock Yards in 19U9-50. Some 97,600 cov/s and heifers, 13,203 calves, h,3h9 bulls and stags, and 5,167 steers— all of dairy breeding— went through this public market, ostensibly destined for slaughter. In the course of this same year, 5,016 of these "dairy animals" were released for milk and breeding purposes. If these e.^timates be correct, over one -fourth of cattle and calf receipts were of dairy breeding. Over 70 oer cent (71) of the purchases were sent to outlets within a 100-mile radius, i\'ith about 10 per cent traveling over 300 miles. Most of the latter animals were transported from central and northern California auctions to the Los Angeles milkshed. Calf Consignments .— Only 8,761 of the 112,000 calves (less than 8 per cent) viere consigned to auctions. Farmers (53 per cent) and "other auctions" 28. (39 per cent) furnished the bulk. It is highlj^ probable that a considerable number of the auction consignments vteve of beef origin.-^' Less than one-half of 1 per cent had come from the sarae auction. The low percentage was partly at laast the result of the handling practices vath young dairy calves. Almost 90 per cent (89) of the consignments were transported less than 100 miles. None of the consignments were sent over 300 miles. Calf Purchases. Purchases outweighed consignments ty over six times. Three-quarters went to slaughterers, packers, or butchers. "Other" outlets accounted for almost one-seventh (13 per cent) of which a considerable number found outlets with jobbers which would indicate that the number marked for slaughter ran between 80 and QS per cent. A fev} were custom killed, the meat being wholesaled. A small number were reported as having found an outlet in "rodeo and roping" work. Those sent through the same auction ring totaled less than one-half of 1 per cent. A few were in such poor condition that they were sent to reduction plants. The outlets vrere close to auctions at which they were purchased as three-quarters (7? per cent) traveled less than 100 miles after purchase and most of the remainder were disposed of at points between 100 and 300 miles of the purchase points (table 13 ). Bull Consignments . —Farmers furnished nine-tenthg of the 3,683 bulls consigned the only other important source being "other auctions" which provided about one-twelfth. The proportion furnished by farmers was higher than with any other class of stock. Animals again consigned to the same auction niimbered less than 1 per cent. Distances consignments moved were the shortest estimated for any class of stock as seven-eighths was transported less than 25 miles while most of the remainder were moved from 25 to 100 miles. Only one-half of 1 per cent was moved over 100 miles (table 11). Bull purchases .— Purchases were only 50 per cent as numerous as consign- ments. Over half went to butchers, slaughterers, or packers. If custom- killed animals were added, the proportion marked for immediate slaughter would have approached three-fifths. Almost one-fifth traveled to "other auctions" while one-tenth moved to public markets. A few were purchased by farmers and a number were put out on loan with producers. About one in every 100 was sent through the same ring. Outlets were close by as over four-fifths of the auction purchases were sent to outlets less than 100 miles away (table 13).' 13/ On January 1, 1951 California was estimated to have had 1,U82,000 cows two years old or over and of these, 885,000 were counted as dairy and 597,000 as beef cows. Normally, in a year's time more dairy calves are dropped. Many of the dairy calves are dropped on intensively operated market milk farms and they are not raised for replacements, being disposed of as rapidly as possible after birth. Mr 29. Lamb and Sheep Consignments . — Consigaments of sheep and lambs were relatively unimportant. Few dealers consigned relatively few animals, VJith possibly three exceptions California livestock auctions handled but few sheep (table 9). The majority of the traders in the sample who handled sheep or lambs did not patronize livestock auctions. The bulk of the consignments made (over 80 per cent) v-ere obtained from farmers or ranchers while practically all of the remaining animals were brought in from auctions — approximately one-half from "other auctions" and the remaining half from the auction to which the animals were being consigned. Approximately two- thirds of the consignments were moved from witiin a 100-raile radius; less than one-third vras transported betvreen 100 and 300 miles. A few (about one-twentieth) had been brought over 300 miles. The latter had been sent from Canada to a California auction sale. Numerous dealers handling large lamb shipments reported heavy east and west movement, especially in stocker and feeder classes, but they did not use auctions as trade channels. Lamb and Sheep Purchases . — Dealers purchased via the auction between four and five times more sheep and lambs than they sold through the same channel. Seventy per cent of auction purchases were destined for butchers and packers while the farmers and feeders took one-seventh — pres^jmably for stocking or feeding (table 11). The remainder (about one-sixth) was sent to several outlets — public markets, "other auctions," the same auction, wholesale custom slaughter, etc. The number sold at the auction of purchase made up between 2 and 3 per cent of the disposals. Along with beef cattle, purchases moved greater distances to outlets — almost one-third of the animals moving over 100 miles (table 13). This is not surprising when the location of sheep production is considered. There is no record of purchases being moved to outlets other than those in California. Swine Consignments . — Relatively few were consigned. Of those reported, slightly over two-fifths originated in "other auctions" and an almost equal proportion with farmers (table 10). The remainder came from numerous sources including auctions to which they were consigned. One in seven had been through the same ring previously. This does not necessarily mean that animals going through an auction more than once are sent through in rapid succession. Many come back after periods on feed. Such consignments are in contrast to those usually thought of as being sold through the same auction. The latter type of sale is often the result of "quick speculation" or buying by the head and reselling by the pound or vice versa. Almost 90 per cent originated within 100 miles of the sales ring (table 12), the remainder coming from within a 100- to 300-mile radius. None of the consignments were reported as originating outside of the state. 30. Snlne Purchases .— Purchases reported by the traders included in the sample were 12 tmes larger than consignments. The packer, butcher, or slaughterer took over half (<3 per cent) followed by farmers or feeders vdth a small fourth (23 per cent). The latter were largely feeders. Public markets accounted for one-sixth (l6 per cent). The remainder was sent through a variety of outlets, some animals being tagged for custom kill, feed lots and farms of dealers, "other auctions," and sales through the same ring. One out of every 100 went back through the same sales ring at a later date. Practically all of the 3li,000 purchased animals were moved less than 300 miles (table 13). None of the animals v;ere reported as having been purchased at auctions outside of the state. Auction Appraisal By Dealers Conversation with dealers indicated that there are several distinct attitudes held with reference to livestock auctions. Since traders stood out prominently in auction patronage and their auction contacts were in most cases frequent, it was believed that individual's opinions might be revealing. The group's lack of homogeneity has been discussed. Operations vary widely, making for different contacts or none at all in a limited number of cases. A number of the California operators, usiially above average in size, buy at large auctions in states outside of California and some of these do no auction br.siness in the state even though headquarters may be vdthin the state. I'ost of the traders, large and small, operated only intrastate. Some buy and/or sell on one or as many as 20 auctions annually. A few attend as many as five and even six sales weekly. Those latter buyers are looking for "bargains" — "sleepers" as such are often called. Others, including packer-buyers, attend some of the larger sales, seeing to it that no one gets anything under the "market." Some traders operating in auction neighbor- hoods never trade at auctions while there are others who buy and sell exclusively at auction yards, A uniformity in opinion was not expressed by this group; in fact, if one were voiced, it would be viewed with suspicion. There were two distinct and often contrasting attitudes to the livestock auction as a marketing agency. l^^Jhile the majority commented favorably, the most loyal endorsers were among either the "average" or "below average" sized operators. Among larger traders the "pro" and "con" of the auction as a desirable marketing agency seemed to be more evenly divided^ The most common commendations were "the auctions have been excellent markets for small farmers," "all get a fair break," etc. Advantages to small farmers were most frequently expressed. A not inconsiderable nmber were neutral in attitude. A number living in the immediate vicinity of the auctions had never patronized them. Some — a minority — were strongly opposed to the auction as a marketing institution. Comparisons v/ith other marketing channels were most frequently made by the latter group such as "the auctions do not measure up to central markets," "I TDrefer to market direct," "auctions are a waste of farmers' time," and "a farmer will spend a day selling one or two head." 31. A few nointed out rrhat they believed either had been or would be the auction's effect on their group. Several stated that country buying v/as becoming more difficult and said very freely that farmers v/ere shovdng a growing preference for auctions. Another variation of this was given in the statement that they "vrere making less money." It is probable that some of the functions performed formerly by dealers have been taken over by auctions and the result is that many dealers cannot look upon them as other than direct competitors. The most frequently mentioned advantages of auction selling were related to livestock assembly. This function has many facets and among those to which attention was called were "convenience," "market for small and odd lots," "a good cull market." Convenience was stressed in a "market close to home." By small and odd lots, dealers were referring not only to numbers but to mixed classes, e.g., milking covr, two calves, and a hog. Odd lots would include classes for which quotations might not be available in the vicinity — "day-old calves," "vreaner pigs," "gummers," etc. Cull animals are numerous in many areas and the opinion among dealers is rather strong that farmers have a better opportunity to dispose of them through auctions than through other channels. Cull livestock is the subject of somewhat acrimonioixs debate among interested traders. A few — usually the larger oncrators — said "low quality livestock," "trash livestock," "low class stuff." Observation would lead to a confirmation of low quality livestock passing through a number of auction rings. However, such livestock has been end is utilized, regardless of the channel through which it moves. The real crux of the situation is in the manner in which much of this stock is utilized. One observing trader of long standing focused attention on the problem in "The difficulty is not with the fact that low quality livestock goes through the ring, but that culls often go to the farm instead of to the slaughterer." As with many arguments and opinions, those on quality cannot be sub- stantiated by reliance on actual data at the present time. Limited observa- tions may be deceptive. There can be agreement that in all market channels a considerable percentage of low grade stock can be found. Lack of uniformity keeps some traders away from certain auctions, and yet the reverse is sometimes the case. Generalizations might well be avoided. One trader in a not highly developed dairy area bemoaned his ability to obtain "good dairy cows at auctions" vriiile another in a highly devoloned dairy area stated that he "could get excellent dairy cows at specialized auctions." In some areas specific auctions were named as being assembly points for specific livestock classes, e.g., feeder calves, dairy cows, feeder pigs, etc. One of the most highly controversial questions was that related to the auctions' influence on prices. Some of the opinions expressed were not always clear as to tht, meanings which were intended to be conveyed. Some were certain that "cull" and "odd" lots brought higher prices at suctions than elsewhere. Here as elsev/here it was difficult if not impossible to obtain actual comparisons. There were some vmo were sure that prices v/ere more uniform over an area since auctions had come into the picture. The claim is that orior to the advent of the auction, ranch prices sagged materially compared vriLth the organized markets. The claim is that the depressed prices are no longer evident. 32. Among traders there is a vddespread opinion that aiictions have made for a more hiphly competitive market and this has been expi^essed in "more competition," "all buyers have a chance to bid," "more buj'-ers," "better prices arc obtained through competitive bidding," etc. It v;as evident that mar^ were thinking of their auction consignments in terms of high prices while a different viewpoint T.'as expressed relative to purchases. Among an appreciable number an opinion (frequently heard among those farming as vrell as trading) was that the farmer had come to a better realiza- tion of livestock "values." Various reasons were given for this awakening to the "value" sense such as seeing the livestock sold in the ring. Related to this was the view that "the farmer did not lose control of his animals." TIThile not Dositively contradicted, there might be a number of questions arising as to the validity of the last statement. Some dealers perhaps v^ent a little far in stating that ranchers had become as well informed as traders on "values," but there seems to be a firm belief that auctions hav^ been a source of market information to farmers. , Auction business operations were generally regarded as favorable, the rapidity of settlement being especially stressed. Complete unanimity did not prevail on this point in all sections. Several disadvantages of auction selling were emphasized and practices of specific auctions v/ere condemned vigorously. Among many there is a strong objection to the auction oivner or his employees selling in a ring. As part of this same general criticism is the practice of the auction aimer or operator buying at the ranch for selling through the ring. A fev; auction operators who were also dealers countered vdth the argioment that only by purchasing could a sufficient volume of stock be run throurh a ring in sufficient quantity to attract buyers. There can be no doubt that the matter of the buying and selling by the owner or operator is a question over which there is a lively debate. Certain auctioneers' methods were roundly condemned by some and praised by others.' The speed of selling came in for frequent comment. At the one extreme v;as "too rapid selling" — at the other, "too slovf selling." Mistakes made by auctioneers, holding up sales, were mentioned. As vn.th the speed of selling, certain bidding practices were both criticized and defended. One controversial question revolves about the auctioneer starting the bidding. There was mention of "collusion between the auction and the packer." ^Thile there was considerable criticism outside of the dealer group of scales and weighing, this was not mentioned by the California operators. Several, usually those carrying on above-average-sized operations, were highly critical of the "small auction" for the lack of buyers present. Misrepresentation was brought up frequently, especially as it related to age, calving dates, pregnancy, production, etc. 33. Shrink and fill were listed as the source of problems with many ramifi- cations. Sales pr?ctices undoubtedly have an influence on weights at v/hich animals are bought and sold. Most of those conimonting on certain management procedures in connection with fill and shrink stated that they v/ere aware of such effects and acted accordingly. Sanitation lacks and disease transmission dangers appeared. The most frequent criticisms came from those v;ho were also stockmen and dairymen. Those traders v-dth a larga and rapid turnover did not express themselves so readily. Some specific complaints in this state along these lines were noted among dealers in dairy cattle. One of the frequently mentioned "disadvantages" is the soiling charge. Comparisons are made vdLth other disposal methods and the conclusion was most certainly reached by a number that the auction method is a more costly method of selling. I'-Tiat was often left out of consideration vras that there is a very considerable variation between auctions in the rates assessed. Some criticism stems from a lack of uniform charges. Dealers do not in some instances pay the same charges as others — at many yards this is clearly advertised. Probably in instances some dealers are rewarded, e.g., for regular attendance by paying lovrer selling charges. Several traders criticized the method of reporting sales at certain auctions. In some instances operators do announce only the highest prices paid at sales and the claim is that such announcements mislead farmers. In California where it was found that there were a considerable number of newcomers in the trader group, the opinion was expressed by some of the newcomers that numerous older traders were attempting to force them out. Claims of "monopoly," "favoritism," "personal prejudice" were too frequent to be ignored. In analyzing many of the criticisms, there can be but little doubt that many dealers had set up in their thinking a free competitive market. IVhat many were attempting to condemn were those forces which they believed vj-ere preventing the making of a price under completely competitive conditions. To seal opinions for or against buying and selling procedures and practices in watertight, isolated compartments is unrealistic. Insofar as the dealer is concerned, he desires to purchase at the lowest prices whereas the auctioneer's job is to get the highest price. Conditions are the reverse Twith the dealer when he makes consignments. In verity, many dealers' profits sprang from the hazards of the auction system. The California dealers bought more than they sold at auctions and certain reasons v:ere stressed as advantageous in auction buying. The broad term, "selection," -"'as emphasized by such phrases as "one can obtain the number, class and type of animal desired and at the time it is wanted," "it (the auction) is a convenient place to make up a truck load or a car." A few small ooerators believed that the auction provided a center where those with small cash reserves could pick up the type v/antod and at "the same time offer a reasonable price." In this state with the demand for both dairy and beef cattle, advantages of specialized auctions were mentioned in pur- chasing dairy cows, feeders, slaughter stock, etc. Several in widely separated areas were not at all hesitant about the opportunities which auc- tions offered for speculation. 3U. A number of the opinions expressed could be classed as psychological rather than economic in character. In the psychological relationships personalities often play a vital part. Numerous suggestions vere made by those interviewed relative to steps which it was believed would improve the trading by the group. The view that there were too many dealers is no doubt shared by almost all—large and small alike. Wo doiibt, a similar view could be obtained from service station owners and operators 1 From a limited number came the suggestion for more state regulation of dealer practices. From some trading interstate caine a plea for more uniformity in state regulations.