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PRODUCERS MUST BUILD VALUE INTO THEIR CATTLE

by: Eric Grant

Part III in a series

The long-term challenge for seedstock producers is identifying ways to build value into their cattle without going overboard on expenses. There are several, general ways of doing so:

1) Register your cattle. That's why breed associations exist and why thousands of seedstock producers around the world are members of them. Associations are built on the premise that registered cattle simply are worth more. That premise has held true for centuries. Even producers who raise and market composite breeds can tap the power of breed association these days. Most of the major breed associations now accept and offer registrations for composite cattle, can maintain pedigrees on these cattle and in some cases even produce Expected Progeny Differences (EPDs) for use by the breeders.

2) Keep good records on your cattle. Surveys show that most commercial producers now use Expected Progeny Differences (EPDs) to determine their bull-buying purchases. If you don't gather data and report this data to your association -- you will not have the information you need to compete with those producers who do.

3) Gather and evaluate economic information. Taking an in-depth look at the feedlot and carcass profitability of progeny of different sires or bloodlines in your cow herd can go a long way in improving the bottom lines for your customers. Most feedlots these days work hard to provide all sorts of individual-animal information on the cattle they feed to the people who place cattle in their lots; they do so because it's in their best economic interest to have profitable cattle. Most packers can also provide individual animal carcass data to producers.

No doubt, the beef industry stands at the threshold of fundamental change in the way it analyzes the performance and profitability of the cattle it produces. Soon, seedstock producers will have at their disposal economic analysis tools that take livestock evaluation to another level, above and beyond EPDs. Economic models, and marker and gene-assisted selection will become a reality for making selection and culling decisions. As a seedstock producer, you should gain as much understanding of these technologies as you can, and be willing to adopt them once they become more reliable.

4) Take an active role in ensuring the profitability of your customers and their customers. Successful seedstock producers today are just as concerned about the profitability of their customers as they are with their own operations. The rise of retained ownership, alliances, vertical integration and greater producer accountability of product quality means seedstock producers must take into account a whole new set of traits, namely carcass and beef quality traits, rather than just growth, feed efficiency and fertility in their selection.

Therefore, seedstock producers who work with their customers to evaluate and compile carcass and economic information will have a leg up on their competition. In the long run if they are able to base culling and selection decisions on this data, they will improve the quality of carcasses and the profitability for all segments of the beef industry.

5) Commercial producers don't just buy bulls; they buy philosophy. Take a look at the most successful seedstock producers in the country, and you'll find they have one thing in common: an ability to articulate what they believe in (their philosophy) and what their program stands for. They have a clear understanding of their mission, where their program is headed, and what other producers have to gain by using their genetics.

In other words, it's not just a matter of selling cattle. It's building ideas behind your product, and using these ideas to carve out a niche for your business.

6) Promote your cattle. Keep in mind that marketing and promotions take many forms, such as advertising, direct mail, telephone calls, customer visits, bull test stations or the show ring. What works best for you depends on your own individual situation, your philosophy and what resources you have at your disposal.

Often, the most success marketing program simply begins by delivering quality products and backing them up with good customer service. Word of mouth is often the single-most effective way to build your customer base. If you have satisfied customers who are recommending your program to others, then your chances of launching and maintaining a successful marketing and advertising program are greatly enhanced.

7) Build trust. Ultimately, the seedstock business is a people business. And people pay more for cattle from people they know and trust. Your reputation may be the most valuable asset you have in building long-term value into your cattle, and ensuring your seedstock business is around for years to come.

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