After seven years of operating live video hay auctions online, Valley Video Hay Markets and Torrington Livestock Markets have come up with a new twist. The Torrington, WY-based businesses began offering two-day-long, timed hay auctions under the banner, Hay Time Auctions, as another service to buyers and sellers earlier this year.
"It's a new way of conducting an auction, and it's proving to be very popular with buyers and sellers alike," says Valley Video's Barry McRea. He notes that, at the first timed auction held in March, his company moved 3,500 tons of hay. The next month, another 3,000 tons of hay were sold. Most of the hay sold at the two early sales was from western Nebraska and Wyoming. Bidders were from as far away as Pennsylvania.
The timed auctions are relatively straightforward:
McRea travels to each consignor to take pictures of hay offered for sale and to send a sample from each lot to Olsen's Agricultural Laboratory in McCook, NE, for RFV, protein, ADF, moisture, lignin and sugar analysis. Photos, test results and directions to sellers' businesses are posted on the Valley Video Web site before auction time.
Online bidding begins on Wednesdays at 8 a.m. (MDT). Buyers also have the option of placing maximum bid amounts on particular lots.
At 2 p.m. the next day, sale lots within the timed auction begin to close at two-minute intervals. If there's any bidding activity on a lot during that two-minute period, the sale is extended for five minutes. Bidders stating maximum bid amounts automatically receive email notifications whenever bids are exceeded – so they can submit higher bids. Each new bid triggers a five-minute extension of the sale for that particular lot.
McRea says timed auctions appeal to hay sellers for several reasons. "A major benefit for growers is that, when they put their hay up for sale online, it can potentially be seen by every buyer in the country rather than just a few local buyers. It's a pretty good tool for price discovery."
Also, because the Valley Video Hay Auction is operated in conjunction with the Torrington Livestock Market, sellers are guaranteed prompt and secure payments. "As soon as the hay is loaded, the seller sends a scale ticket to Torrington Livestock and a check is issued within seven days. In turn, Torrington takes the responsibility for invoicing the buyer for payment."
Buyers also don't have to travel to auctions to inspect hay or place bids. "They can place bids from anywhere in the country as long as they have access to the Internet," McRea says. "We're seeing more and more people taking part in the auction using their smart phones."
Brokers working for livestock producers prefer timed over live video auctions because they get more time to contact customers about lots being offered. "And it gives people more time to check with several trucking companies about freight rates and truck availability," says McRea.
He plans to conduct timed auctions on a twice-monthly basis through November. The next auction will start June 8. Along with hay from Wyoming and Nebraska, he expects Kansas and Utah lots for sale at this summer's auctions.