Cattle drive(n)... Bluegrass Livestock Marketing Group is thrivingPosted on Mar 5, 2012
Manager Jim Dause said Bogie is a fixture there.
“We keep a wheelchair at the stockyards for him, and his family comes and puts him in it,” Dause said. “He comes every week, and at his age, when he doesn’t come we get kind of worried about him.”
That service to customers like Bogie may be one of the reasons Blue Grass Livestock Marketing Group, of which the Richmond yards is a member, is the largest livestock marketing company in the state – and growing.
Blue Grass, based in Lexington, is by far the largest cattle marketing business in the state, accounting for about half of all cattle sold at stockyards in Kentucky, according to Jim Akers, chief operating officer. Blue Grass expects to sell about half a million cattle this year, Akers said. Besides the Lexington and Richmond facilities, Blue Grass operates yards in Campbellsville, Stanford, Mount Sterling and Maysville. At various times during the week and month, the yards sell cattle, but also horses, goats, sheep and hogs.
Blue Grass will soon open a new facility in Albany, Kentucky, which will replace the yards that burned down in Monticello a few years ago.
“When the yards burned in Monticello, that created a void and cattle farmers in the area were having to drive incredible distances, distances that were not sustainable, to market their cattle,” Akers said. “That created a void and we saw an opportunity.”
Akers said he the Albany facility, which will have a sale ring modeled on the yards in Richmond, will be designed to move as many as 50,000 to 60,000 head of cattle a year at sales scheduled for Wednesdays and Saturdays each week.
“We wanted a Saturday sale to help the many part-time cattle farmers in the area,” Akers said.
Akers said Blue Grass was fortunate to find a spot just outside of Albany at an intersection of two major roads, Ky 90 and U.S. 127, for its new operation.
The company is also offering virtual cattle sales, where beef producers can move their feeders without ever having to go through a stockyards. Blue Grass sends its representatives to the farm to check the cattle for age, weight, sex and quality. The calves are videotaped and sold through a virtual market. After the cattle are sold, a company rep assists in checking the load of cattle before they head out directly to the customer.
“The virtual sales account for about 10 percent of our sales, and it’s a growing part of our business,” Akers said.
With the yards scattered across eastern Kentucky and its virtual market, Blue Grass is able to provide a market to cattle producers in the eastern half of Kentucky and nine surrounding states.
“We don’t go into western Kentucky or any farther than we can send representatives to service the farmers,” Akers said. “All we have to sell is service and if we can’t have a personal relationship with the producer we don’t want the business.”
The company’s history begins with the yards in Lexington that opened in 1946. In 1976, the Hope and Barber families bought into the business but sold it in the 90s. They got back into the business in 2000 and are among the owners today. Blue Grass currently has a total of 11 owners, all of them either farmers, buyers or hands-on managers and actively involved in the day-to-day operation, Akers said.
When they decided to expand operations in the state, the owners hired Akers to take over as chief operating officer in 2006. Akers had previously been working for the University of Kentucky and was involved in setting up the Kentucky Beef Network.
Dause, who managed the former Madison Livestock Sales in Richmond, said that business decided to join Blue Grass about five years ago. The Richmond yards moves 45,000 to 50,000 cattle yearly and also markets goats on the second Monday of the month and horses and farm equipment periodically. Dause said the advantage of joining Blue Grass was access to larger capitalization to make sure their customers got paid.
“With prices the way they are we are selling $1 million to $1-and-half million worth of cattle every Friday,” Dause said.
Being well-capitalized also helped Blue Grass weather the bankruptcy of Eastern Livestock Company, with which it had done business. Akers said Blue Grass “is still actively involved” in the bankruptcy proceedings but the producers who sold through Blue Grass all got paid.
“Over 400 farmers all got paid for cattle, and we never saw a penny of it,” Akers said.
The state has subsequently passed new regulations aimed at ensuring that what happened with Eastern Livestock doesn’t happen again. Meanwhile, Akers said in the past year or two he has attended farmers’ meetings around the state gauging producer interest in creating a beef cattle indemnity fund that would serve as insurance against future collapses like the Eastern Livestock debacle. But there isn’t much interest out there, Akers said.
“I think it’s because we took the hit, and farmers didn’t take the hit,” Akers said. “They didn’t feel the sting.”