GUIDE: Bargaining for a Better Market Outcome

John and Jane sit down at the table ­after supper and discuss tomorrow’s ­meeting with the buyer. They’ve got a good set of calves, and they want to get a good price for them. John and Jane have been selling to the same buyer for nearly ten years and feel they have a good relationship with him. Jane has been checking with their neighbors about the prices they have been getting, and she wonders if they could be doing better than they have been.
   Both John and Jane like ranching and working with the cattle, but when it comes to marketing, they are not comfortable with haggling over price. They worry if they don’t sell their calves to this buyer, they will have a hard time finding another buyer quickly, which will increase their feed and labor costs for their weaned calves.
   John likes to let the buyer make the first move on price, and he figures there is not much room to improve this price with the buyer. However, he always makes sure that they are not giving up too much sale weight on pencil shrink (an estimate of livestock weight lost during handling, weighing and transportation). John and Jane are like many other ­producers who are uncomfortable with bargaining over price and worry about losing their buyer.

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