Answers To Some Consignor Frequently Asked Questions Regarding The 2020 11th Annual Steaks Are High Sale

The TWA Board of Directors and Sale Auctioneer Rob Schacher of Schacher Auction Services have worked together to create the below list of “frequently asked questions” (“FAQs”) to help those who are considering consigning live animals to the upcoming 2020 11^th Annual Steaks Are High Wagyu Sale.  If you have other questions after reviewing the sale lot consignment nomination form and instructions, and these FAQs, please contact Rob Schacher by phone at (817) 219-0102 or by email at wagyusales@schacherauction.com.

1. Now that the sale has been changed to an online video sale, and with the current COVID-19 crisis, how do you believe the sale will do in terms of demand and pricing?

There is no way to predict how the sale will do in terms of demand and pricing.  The current COVID-19 crisis is changing and evolving rapidly and the government is taking unprecedented steps to contain it and slow the spread, and treatments are being developed.  Therefore, it is impossible to know what that situation will be like by the time of the sale in late April.  And it is impossible to know how this crisis will impact demand for cattle.  In the past week, as the crisis was growing and there was panic buying in grocery stores, closings of certain businesses and schools, etc., there were many successful online video cattle sales, through Superior Auctions and others.  The three online video sales conducted by Superior on Monday, March 23, 2020 were all well received and pricing was firm.  Unfortunately, we cannot predict market conditions a month in the future.  But remember, breeding and calving seasons in the cattle industry do not stop or reschedule for crisis such as this, and there is nothing fundamentally wrong with the cattle industry at this time.  

2. What is the deadline for submitting sale lot consignment nominations?

The original entry rules and forms that was sent out via email on February 28, 2020 specified that entries were due for submission by Friday, March 20, 2020 (last Friday).  However, last week the TWA issued a press release and sent out an email informing TWA member of changes to the sale and in such communication the deadline was extended to Friday, March 27, 2020.

3. What is the probability that my nominated sale lot consignment will be accepted by the consignment selection committee since there is a limit of 100 live animal lots in the sale?

We of course do not know how many lots will be consigned, but in the past the number has been around 100 to slightly above 100.  So, your odds of having your sale lot consignment accepted is very high, but we cannot predict with certainty.  To ensure that your nominated sale lot is accepted, ensure that you nominate desirable animals that are in good condition, and include with your consignment nomination form a good description of your animal as well as a good video or several good pictures to help the selection committee understand why your animal is desirable. 

4. If I send in a consignment nomination form to consign a sale lot, and pay the required $100 consignment entry fee, and if the sale consignment nomination is rejected by the consignment selection committee, will my $100 consignment entry fee be refunded?

Yes, if any nominated consignment is rejected your $100 entry fee will be returned to you.  However, if your nominated animal is accepted by the selection committee but you pull the animal from the sale afterwards, or if the animal is a “no sale” during the sale, the entry fee will not be refunded.  And remember, the retained entry fees will be applied to the sales expenses to reduce the total sales expense that is allocated to sellers based upon gross sales proceeds.

5. Now that the sale has been changed to an online video sale, will the sale expenses that are paid by the consignors out of the gross sales proceeds be higher or lower than in the past?

We expect the total sales expenses will be meaningfully lower because we will not be paying for the physical sale facility, we will not need the staff for handling the cattle at the sale facility, we will not have the food and drinks expense related to a physical gather, etc.  And the auctioneer sales commission is a variable number tied to the gross sale amount.  Our rough estimate is that the dollar amount of sales expenses could be reduced by as much as one-third of what they have been in the past.  The sales expense as a percentage of gross sales proceeds cannot be determined since it will be higher for relatively lower gross sales proceeds amount and lower as a percentage of gross sales if the gross sales proceeds are relatively higher.  As stated in the entry rules document that was emailed on February 18^th, the sales expenses have been between 11% and 15% of gross sale proceeds for the past three sales.  And the $100 consignment entry fee will offset up to that amount of sale expenses allocated to each sale lot.   This amount is the total expense including all commissions and fees.

6. How do I go about getting the required video created and sent to you for each nominated consignment lot?

First of all, it is not required to create a high-quality video for each lot just to nominate an animal for consignment to the sale, but we will require the video file shortly after we inform you that your nominated animal was accepted.  For purposes of submitting the consignment nomination form, a video would be good since it will best inform the consignment selection committee of the animal’s appearance and condition.  However, a picture or two or three will be sufficient for inclusion with the consignment form.  We will require the high-quality video file shortly after your nominated consignment animal is approved by the selection committee.   As far as how to go about creating a good video file that will do a good job of marketing your animal in the online video sale, remember that this is the only opportunity most potential buyers will have to see your animal before deciding to bid.  So, taking the time to create a good video has value.  It is helpful if the animal is clean and has the hair on its back and head trimmed.  We will be announcing various sessions in Texas at which we will have a professional videographer and professional equipment where you can bring your animal to have a video created.  Or you can create a video yourself, either edited or unedited, and send to us. We will announce a “Dropbox” account into which you can upload your video file.  If your video file is unedited, we will edit into an appropriate length and eliminate bad sections of the video to make the video as good as it can be made through editing.  If you have questions please contact Rob Schacher.

7. There is a requirement in the rules that each live animal in the sale must have certain health tests and a Certificate Of Veterinary Inspection. Are the required health tests and health paper required to be done prior to or at the time the consignment nomination form is sent in, or can the health tests and health certificates be done after my sale lot is accepted by the selection committee?

                       There is no need to have any testing done, or complete the required Certificate of Veterinary Inspection (Health Paper), prior to acceptance of your sale lot by the selection committee, so long as your Veterinarian can complete such prior to the sale.  However, if prior to the sale you do not deliver the required Health Paper for any consigned animal tests positive for a banned disease, such as Trichomoniosis (for bulls), or Johnes (for over 2-year-old animals), or BVD (all animals) or Leukosis (all animals), or if your consigned breeding age bull does not pass its breeding soundness exam, such consigned animal lot will be pulled from the sale and you will loose your $100 consignment fee.  Therefore, it is in your best interest to know that your animal will pass such required tests prior to consignment if possible.

8. If I consign an animal and it sells in the sale, how will shipment/transportation be handled?

The buyer of your animal will be responsible for transportation of the animal from where it is located prior to the sale.  We must set forth in the sale catalog the location of the animal so that potential buyers can take into consideration the transportation aspect of their purchase decision, so please ensure that you include this information in your consignment nomination form.  After the sale the buyer will pay the sale amount to Schacher Auction Services to be held in escrow in a bonded custodial account, the same as would be the case for a physical live sale, and Schacher Auction Services will inform the seller that payment has been made.  Pickup by the buyer, or shipment to the buyer arranged by the buyer can then be done.  Schacher Auction Services will work with buyer and seller to help with arranging transportation.  After the animal has been shipped the seller has met its obligation for delivery under the terms of the sale and at that time Schacher Auction Services will send the sale proceeds to the seller.

9. Where do I get more information about how to submit consignments of live animals or frozen semen or embryos to the sale?

The rules and consignment forms that were emailed to TWA members on February 18, 2020 are available on the TWA website by clicking on the link within the press release issued by the TWA on March 18, 2020, which is accessible under the “News Releases” section of the TWA website (www.TexasWagyuAssocaition.org/news-releases)