We saw a fat steer sell for $7000 at the fair. A Grandpa and Uncle were unknowingly bidding against each other. There's a premium per lb on animals sold on top of the market price. Can someone explain how the premium works and a going rate for beef

I don't know about a premium, but from what I understand, buying the champion beef, pig, market lamb, or whatever is part of advertising for your market.

Around here the bidding goes up to support the 4-H kids and farming. Like all things if you don't have the kids involved, your pursuits will fade with the times

The huge number of County and State fairs often vary a lot in their bidding process. In general, most of the animals being auctioned go to a processor or mass buyer after the auction, but some do allow the winning small bidder to take possession of it.

When an animal is being sold, typically only the winning and higher placed animals are openly bid on. The rest are usually bought through sealed bids. Most bidding is per pound or hundred weight. Many businesses will place very high, above normal market price bids, on the winning animals, to sponsor the program and to promote their business. The fair or club gets part of the money and the kid who raised the animal usually gets the larger part.

Usually several processors offer to butcher and pack the animals. The winning bidders get to select which processors receive the animal. The winning bidders pay the processing fee and can either receive the meat after processing or donate it.

Sealed bidders submit bids in envelopes for all the animals not auctioned off individually. They usually have to buy every animal leftover at the price per pound or hundred weight they bid. Beef and hogs usually are won at close to market price. Smaller animals like lambs, goats, rabbits, turkeys and chickens, often sell for a pittance, especially at smaller fairs.

I was asked to buy rabbits at two fairs this year. I didn't because I didn't need a ton or more of rabbit anymore all at once, even though I could get it at a fraction of what I normally pay.

Keith

If the Fair has a premium for their auctions I believe the person buying can pay the premium and the kid gets that and keeps the animal.
Auction prices are not near the same as spot markets prices, they are rewarding the kids for their work and those animals go for high prices.

Our county fair would after the show and auction, sell the remaining non winners at market cost, buyer paid for processing.
Winning bidders that take the animals get processing included usually at auction here.

This year hogs averaged $15/lb at the auction here and steers $8.

It’s all about supporting the kids 4H efforts. There’s bragging rights at stake too for the buyers. They’ll have pics and the purchasing certificate framed and on display at their place of business. I’ve seen two coal companies square off in bidding, driving prices into crazy numbers. The purchase price, over fair market value, is also tax deductible for the purchaser. The grand champion steer at the Butler Farm Show last week paid $5.59 a pound, so about a $6500 payout. That’s down from the $8.50 a pound price from last year.

At some fairs, buys will split their money between all the sellers. No winners or losers. At some auctions, the buyers donate the animal back to the sellers. Our coal company used to buy steers at different county fairs, and get the animals butchered and give the cuts out to the employees.

Here it's an open auction. Local business, the sharpies department and anyone that wants to support the kids bid on the animals. The boys have gotten over 500 for a pare of chickens and also on the 3 meat rabbit pack they have sold.

The buyers can take tha animal but mor often it gets solt to the Out truck. what goes to a processor.

It's not about buying the animal. >It's supporting the kids, advertising, tax deductions and some times showing off their $. But the kids benefit and make a crazy return for the animal they sell.

It's an emotional thing for a lot of the kids to sell an animal they raised and spent so much time caring for. Lots of tears get spilled in or around the auction ring.

Yep...Our family has always bought 4-H meat at higher prices once a year. "and it's tasty too"...

Up in the Sandhills it has alot to do with the last name of the seller. For example, the owner of Sandhills Oil Company bought several beef animals from his best customers' kids. Some animals go to the locker, some go to the sale barn, some go back home with the kid that raised it. The Grand Champion heifer nor steer brought the best price. And yes, it's always announced who purchased the animal and the top placers are photographed with the buyer for advertising purposes. Now here in SE Nebraska none of the animals go to the locker. That's up to the kid that raised it. Too many hurt feeling in the past. I can remember 60 yrs ago a girl named Marilyn Barr crying her eyes out after she led her beef up into the trailer and took the halter off of it. Times have changed. I love beef steak.

4-H is awesome. Nuff said. Eyes are startin to burn. Gotta go now.

When my boys did 4-H, market steers, fat hogs and sheep were the only categories that sold. The high bidder took possession of the animal which was typically resold for market value. There was also an option of a premium that could be added by other bidders. My brother represented the local bank which had 13 other banks/branches under them. He would typically only buy a couple animals but would give a $50-100 premium to any of the banks customers kids that may be showing.

I have seen kids get premiums from 10-12 different folks that added up to as much as what the animal sold for.

The premium you speak of around here is typically different than the actual auction bidding process. The livestock is bid on and sold, but there is also an option for the kids to have businesses (or private individuals ) to provide a premium. It is typically done by the pound. You might see a business that wants to support a few kids, but dont want to purchase 3 hogs, so they'll give said kids a 10 cent premium. So on top of the auctioned price, the kid also pockets an extra 10 cent premium per pound for his animal. The business gets nothing but a little name recognition.

Here at our county fair, there is not a premium as some are calling it. It is an open auction, and many businessess, families, organizations bid on those animals that are selected after showing to be in the market animal auction.
Prices are typically far above the current market values. We have beef, hogs, sheep, goats and poultry in our market auction. At our sale a large portion of the final sale for each animal goes into education funds for the owner or show person for that market animal. A lot of the businesses buy or support the family members of farms or persons they do business with. It is a promotional opportunity for organizations and businesses.

Bryce

My son just bought a hog at a fair auction. I think the premium was $11 a pound. The seller was a kid that was a friend of a business partner who did numerus projects for my son. The kid promoted his hog to them. He even made a nice brochure to explain his 4 H project and asked my son if his business would be interested in purchasing it which they did. It was a win win for all involved. My son really likes supporting athletic organizations where there are kids involved and charities that effect kids he may know. His business does not support random organizations because there is only so much support he can give but if its for kids he really has a soft spot for those.

I saw on the news a couple years ago where a prize steer ( a steer ! ) sold for well into the six figures. Unreal. A show steer.

Insanity.

Insanity?

Why, some people have extra money and want to be charitable.

Think of it like the old NAFA top lot. It's advertising for local businesses and of course there's a good ol boy component to it as well

No different than the top lot at FHA, or the $2000.00 cat in an $800 market!

As a kid living on a farm, we raised hogs and cattle and I was in 4-H and wanted to show mine. Dad said forget that. You are a nobody. Prizes and awards given to kids of parents that are somebody. Top money going to top placed animals. But stock has to be capable of winning too. I have a relative that still raises purebred hogs and the vast majority are sold to 4-H and FFA kids to raise to show. A kid I grew up with still does the same with different breed. It's a small circle and everybody knows everybody in that game.

As guys on here have mentioned.........big money going to customers kids. I once witnessed a state fair raffle rigged to give prize to a customer. I was appalled but was told to shut up......that's how it's done.

I also used to work with some guys who went to county fair auction. We didn't buy the Grand Champion.......but did buy about #75 out of 100. Nice calf.....and bought it below market price per pound. Had it butchered and split it 3 ways. Cheap meat.

Years back the neighbor kid sold his steer at an Omaha sale not sure what sale if it was State fair, 4H or FFA it’s been a while. At that time a guy paid an unheard of amount for it then donated it to a homeless shelter. Pretty sure it was all a write off it’s the only thing that made sense at the time. The family did show cattle and swine.

The show cattle stayed indoors in a cooler during the day and only went out after sunset to avoid direct sunlight the hogs ate feed with candy in it smelled like nerds but I never tasted it. LOL

The guy did some judging also he once told me he was going to some old enemies and make some new ones, it sounded pretty cut throat to me. He got caught up in some controversy but retired and moved away we still get the family news letter at Christmas from them.