Premium Sale Basics: How the Livestock Auction Works

The premium sale is the auction at the end of many junior livestock shows, where businesses and families bid on market animals raised by 4-H and FFA members. For many students it is the biggest payday of the project. It is also the part of the show where rare and heritage breed exhibitors most often hit a rule they did not know existed.

Premium and market value

Most sales split the money into two parts. The market value is what the animal is worth as meat, usually based on weight and a market price. The premium is what the buyer pays above that, effectively a gift to support the exhibitor and the program.

Keep or turn

Ohio State University's livestock sale page explains the two common options. A buyer who keeps the animal pays the bid and takes the meat home. A buyer who turns the animal back pays the premium, and the animal is sold at market value to a packer, with the money going to the exhibitor.

The page gives a worked example. A 1,200 pound steer at a packer price of $1.20 per pound is worth $1,440 as meat. If the winning bid is $1,000, a buyer who turns the animal pays the $1,000 premium. A buyer who keeps the animal pays $2,440, which is the $1,000 plus the $1,440 market value. Your sale may use a different formula, so ask the committee how it works.

Why eligibility matters for rare breeds

Many sales accept only market animals that meet specific rules. Those rules may limit breed, age, weight or finishing standards. A slow-growing heritage animal may not reach the minimum weight in time, and some fairs do not sell breeds that are not on a standard list.

Before you buy an animal, ask the fair office:

1. Is my species and breed eligible for the premium sale?
2. What are the weight and age limits?
3. Does the animal have to pass a market class?
4. Is there a separate heritage or breeding sale?
5. What are the deadlines for tagging and ownership?

Get the answers in writing.

If your breed is not eligible

You still have options. You can show in breeding classes, showmanship and record book contests. You can sell the animal or its products privately. Many rare breed farmers sell meat, eggs or fiber directly to customers who value the breed story. See the Heritage and Conservation section for ideas.

Working with buyers

Buyers are often local business owners and friends who like to support young people.

• Visit potential buyers before the show with a short letter.
• Send a handwritten thank-you note within a few days of the sale.
• Share photos of the animal with the buyer's banner.
• Invite buyers to visit your farm.

A buyer who feels welcome is more likely to come back.

A simple plan

1. Read the sale packet in the spring.
2. Confirm eligibility for your breed.
3. Make a list of potential buyers and visit them.
4. Keep records of every cost.
5. Save part of the check.
6. Follow up the next year.

Keep going

Learn about the rest of the show in How to Win at the Livestock Show, or explore our breed pages to see which animals fit the market and which do not. agriculture.directory lists processors, feed stores and vets near you. For a funny take on auction day, farm.fm has the Menard County Jr. Livestock Show and Premium Auction.