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MARKETING PROGRAMS HELP PRODUCERS FIND GENETIC VALUE

by: Clifford Mitchell

Few envision worn out jeans, weathered cowboy hat and a faded Carhart jacket as well-known attire for a Chief Executive Officer. Many times that is only one of the titles the producer must handle. Production Manager, Marketing and Promotions Director, Laborer and Accountant are all either stenciled on the office door or on one of those funny little wooden name-plate things execs often seem to use as a form of identification.

Fact is the success of the outfit often depends on one person. However, there are more tools available to producers today to help ensure their success. In some cases, this means a whole team of experts available. This is same kind of knowledge a CEO can draw on in the corporate world to make goals easier to attain.

It is no secret cattlemen are good in the production division of the enterprise. Time and time again we see genetic packages that are capable of out producing the generation before on the available resources Mother Nature will provide. In most cases, it is often the marketing division that needs help for a producer to achieve profitability.

“There is a difference in getting them raised and marketing cattle. You have to market what you raise and we need all the help we can get,” says Robbie Hamilton, Wharton, Texas. Hamilton is a director for the Brahman Influence Marketing Group (BIM).

In the Gulf Coast Region and other harsh environments, the F1 female and her American breed counterpart is the centerpiece of most breeding programs. This blend of Brahman genetics thrives where other breeds could not survive. The market demanded by these females is really strong through the region due to a well-deserved reputation.

“The F1 females sell themselves,” Hamilton says. “They get by on less and do more than other cattle.”

“The eared female is acclimated to the harsh Gulf Coast environment. Many eared breeds have created special female programs because they have identified their value as replacement females,” says Wendell Schronk, Executive Vice President Beefmaster Breeders United, San Antonio, Texas. Schronk is also the secretary of the American Breeds Coalition.

“The F1 female excels in our region. My commercial customers are willing to pay $400 per head more for F1s than other crossbred females,” says Chris Krielow, Roanoke, Louisiana. Krielow is a BIM director.

“They are great producers when they are managed correctly. The value paid for F1 females is justified. They don't skip calves in a bad year, “ says Dr. Bill Turner, BIM Commercial Cattle Rep.

The established market for these females is due not only to their ability to handle the elements, but also because good females put cattleman in position to garner profit. The right females add flexibility to a producers breeding program and are always one generation away from profitable offspring.

“The commercial cowman needs to raise cows that will fit his environment and then choose bulls that fit the market,” Turner says. “The flexibility of these hybrid females is critically important. In one year a producer can completely change direction to meet future market demand.”

“These females, when mated to different bulls, can accomplish different things,” Schronk says. “They are high growth females with enough maternal traits to have calves that can express their genetic worth.”

Top genetics are still the backbone of every program, commercial or purebred. Smoke and mirrors may be able to hide certain things, but Mother Nature and the scale can be very unforgiving.

“You have a lot of flexibility using hybrid females, but heterosis can't overcome poor genetics,” Turner says. “It takes the best genetics of both breeds to produce good F1 females. They are great producers and can be as predictable as straight-bred cows.”

Creating a specific product, using the best genetics available, is a common goal among producers of Brahman influenced replacement females. The nature of the market creates repeat business and the amount of attention created by special marketing venues lets producers showcase their product. However, when these same producers that are getting rewarded for their females took the steer mates to town, it was a different story.

“The people who were producing these good tiger-striped heifers were throwing their steers away,” Turner says. “Something had to be done. We were not talking about breeds and genetics, but producers who were using Brahman influence cattle.”

The industry bias toward Brahman influence cattle didn't happen overnight, but has been a blemish for a long time. The females had to bring top prices to make up for losses on the steer end.

“The Brahman influence was definitely hurting the steer calves,” Hamilton says. “Our goal was not to for them to bring a premium, but we would have been satisfied not to get penalized.”

“For years we have been penalized for the Brahman influence,” Krielow says. “We were taking such large discounts the feeder had to be making money. Now, the premium I get more that justifies the transportation costs to get to the sale.”

“It doesn't matter what breed or type of cattle they are if there is just a handful of them,” Schronk says. “The order buyer does not have many options without the availability of numbers.”

As these small to medium highly specialized producers reached to find a marketing tool to help fix the problem, it did not exist. BIM and ABC were born out of necessity to help producers handle the competition and find answers to their marketing questions.

Other programs were rapidly garnering market attention because they provided a known product. BIM saw the need to create the same kind of buying atmosphere to compete and take advantage of the supply of cattle of known genetic descent that are available in the market area.

“We had to find a way to help producers raising good Brahman genetics capitalize on what they are doing. We put the responsibility on the producer to provide the information,” Turner says. “Source-verified will always prevail in today's marketplace. By source-verifying, providing known genetic and health background, producers put themselves in the market.”

“We had to send our cattle through the “Ranch to Rail Program” to establish the value of the steer calves, before BIM could really get going,” Hamilton says. “As long as you maintain no more than 50 percent Brahman influence, the cattle really excel in feed conversion and efficiency.”

Just as the producers have been able to showcase their females in the marketplace, this program offers the same opportunity for steer calves, if cattlemen are willing to do their part. These sales present the product in a fashion where it eliminates most of the risk for the buyer and uniform groups are available.

“The ability to co-mingle cattle into load lots adds value to the product. All the cattle have been handled the same so we can package them together in groups based on weight and quality,” Turner says. “We started with strictly F1 steers, now we also sell the American breeds and calves out of F1 cows.”

The real benefit of the co-mingling is any size producer can take advantage of the program if all of the steps are followed. This program is not biased toward herd size and encourages the smaller producer to become involved. Since most of these producers hit a specialized market based on top genetics, these cattle will perform in the feeding phase, which creates repeat business.

“I can't put together a truckload of calves. When I can co-mingle my calves with the same type and make a load, there is a big difference,” Hamilton says. “The buyer has little health risk in the cattle and he is buying known genetics. We have a lot of repeat buyers.”

“I think it is great if you can appease the buyer by knocking down some of the hurdles for him,” Krielow says. “Co-mingling cattle and the other steps we take with known genetics and the health program definitely makes it easier for the buyer.”

The market often provides the answers for cattlemen who are forced to have many titles back at the ranch. Programs that will be an extension of the producer that provide incentives and help breed good cattle often will identify themselves. Cooperative efforts, that add value, will allow producers to truly become the CEO of their operations.

“These hybrid cattle will continue to grow and perform down the line,” Turner says. “Hopefully, the cattle will continue to gain acceptance through their utility.”     

“ABC and BIM have both been beneficial to increasing the marketability of these steer calves,” Schronk says. “When the order buyer knows there is going to be load lots of known genetics that are pre-conditioned and source-verified, he will pay more for those calves. Every piece of information adds value.”

“BIM is getting top prices for our steer calves,” Hamilton says. “It is amazing how much value it adds when we put the cattle out there like the buyer wants them.”

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