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ADDING VALUE NATURALLY -- PRODUCERS FIND A "NATURAL" FIT WITH RED ANGUS AND MEYER NATURAL ANGUS BEEF

by: Blake W. Angell
Commercial Marketing Director, Red Angus Association of America

What was once viewed as a small niche market on the coasts is today developing into one of the fastest growing segments of beef sales across the US. The Meyer Natural Angus Beef program (MNA), now in its second decade of providing consumers with an all "natural" beef alternative, continues to see increased interest for their product. MNA is actively pursuing cattle that meet their specifications and aggressively trying to bring those cattle into their system. As many producers are realizing, the demand for natural calves is alive and well.

In just the past two years, the volume of cattle going through the MNA program has nearly doubled. With right at 80,000 head harvested in 2005, the short term goals of the program are to move the weekly harvest total towards 2,500 head of cattle. This increase will result in the need for an additional 50,000 head annually. With an aggressive strategy and pricing system in place, the MNA program is set to make a much larger impact on the "natural" beef market in the coming years. For one Wyoming ranch, this is exactly why they have chosen to market their cattle through the Meyer program.

Wagonhound Land and Livestock of Douglas, Wyo., is a commercial cow/calf operation that has been utilizing Red Angus genetics along with specific management strategies to produce what they believe is a superior product. Although they were raising and marketing "natural" cattle through retained ownership, Matt Johnston, general manager of Wagonhound, and his management team felt there might be increased opportunities available through aligning their production with a specific natural program. After evaluating the different programs available, MNA was the one that rose to the top.

"We were looking for a successful branded beef program that our cattle would fit into and would provide an opportunity for the development of a long term relationship," says Matt. "The Meyer program provided just what we were looking for."

In The Beginning the Meyer Natural Angus Beef program was the result of Robert E. Meyer's desire to produce a superior beef product "raised the old fashion way - the natural way." So in 1994, Meyer's began providing a product that was desired by the end consumer but was not yet available on a wide scale. As the system was developed, it was crucial that it be designed around the use of cattle with documented Angus genetics to achieve the meat quality objectives desired. Today, the best of both Red and Black Angus genetically identified cattle are used to supply the beef channel. But, with a Red Angus herd of his own in Montana, Robert and the whole MNA team are dedicated to increasing the percentage of Red Angus cattle funneling through their system.

Beyond the requirement of at least 50 percent Angus genetics, producers must also be able to document the management and health protocol of their cattle. The program requires that cattle be free of growth hormones or implants; free of antibiotics or ionophores; and must not have received any animal by-products in their feed. (Producers can obtain a listing of specific products or items that are not allowed by contacting MNA.) One misconception by many producers about natural programs is that the cattle need to be free of any and all "drugs." The health of the cattle is one of the most important facets of the program; because cattle must stay healthy throughout the feeding period to remain in the program, it is imperative that their immune system be at peak performance upon arrival to the feed yard.

Proper mineral programs at the ranch, appropriate vaccination protocols and the ability to wean calves prior to leaving the ranch are huge contributors to the sustained health of the cattle. Although not all of these practices are required, the more of these a producer can implement, the more value the cattle will have to the Meyer program. Today, with the issues facing our industry relative to the reestablishing of export markets to US beef, one final item must be documented. Producers need to be able to provide date of birth information on their calf crop. Overall, cattle entering the MNA program must be 30 months of age or younger at the time of slaughter, and cattle that can be documented to be less than 21 months of age will be eligible to supply product to Japan once that market is accessible. All of this information, along with their endorsement from the Humane Farm Animal Care Program as "Certified Humane Raised and Handled," is used by MNA to further expand the domestic and international markets for their product. It is the ability to supply these markets that will continue to add value to the product and provide for expansion of the program.

One of the main obstacles for MNA is the perception producers have about natural programs. Many producers believe that the "natural" programs have too stringent of specifications to adhere to or are too costly to follow due to decreased performance. Yet, many of these same producers are currently producing calves that are eligible without even realizing it.

Other producers' cattle could meet the criteria through minor changes to their current mineral supplements or management strategies. As it relates to the concern about decreased performance, there are several new products on the market that can provide similar results while maintaining eligibility for "natural" programs.

Marketing Advantage

For Red Angus commercial producers, the Meyer program provides one more marketing option to aid in capturing full value for your calf crop, and will work with the current marketing strategies of any producer. Whether selling calves at the local auction market, over an internet or video sale, or offering them privately off the ranch, the MNA program is designed to purchase calves and yearlings that meet their specifications. Through an extensive network of buyer representatives, MNA has the ability to bid on cattle that meet their specifications when provided the necessary information in a timely manner.

The Red Angus Feeder Fax is one avenue they rely upon as a means of gathering information on potential sets of cattle to pursue. In addition, the MNA program provides producers who may be retaining ownership and feeding the cattle all the way out, or for cattle feeders who are looking for another marketing alternative, access to a grid pricing system designed to reward cattle fed under natural specifications. This pricing system pays very aggressive premiums for high grading, Choice and Prime cattle - rewarding producers for supplying cattle that meet the targets the program is focused on. For one farmer feeder in southeastern South Dakota, the MNA program is providing an opportunity to keep doing what he loves - feeding cattle. In addition to operating his farming and cattle operation, Philip Lerseth of Beresford has also been working for Ralco-Mix feeds for the past three decades. It was through this relationship that Philip was first introduced to the Meyer program. "Ralco is a company that has always been dedicated to the feeding and supplementation of cattle through a natural means, and it was one of our salesmen that first told me about the Meyer program," Philip said. This conversation enticed him to look into what the Meyer program had to offer. At that time, Philip was feeding his own home raised calves along with some locally purchased calves under conventional means. After looking into the structure, objectives and pricing system offered by MNA, he was convinced that this was a program that not only offered him the opportunity to expand his current feeding operation, but also could provide an avenue for his son Harley to continue with the family operation. "The Meyer program is the best natural program out there right now," believes Philip. "It also offers the best opportunity for young people like Harley to make a living in this business in the future."

In the spring of 2002, Philip and Harley put their first set of "natural" calves on feed. Philip recognizes that there is no substitute for good cattle management, especially when it comes to feeding cattle naturally. They spend time daily physically walking through the cattle to try and identify any potential health problems and attempt to address them naturally when possible. He also believes that cattle feed just as well under natural conditions as cattle under conventional means, plus you end up with a better product. As a result of their success with the Meyer program, they have been able to expand their operation by adding additional feeding capacity. Looking forward, they intend to fill their entire lot with not just MNA eligible cattle, but with all Red Angus cattle. Perfect Fit Red Angus genetically identified cattle continue to prove themselves throughout the cattle feeding industry, and this is no exception when it comes to the MNA program. From overall cattle health, to feedlot performance to the carcasses produced, the Meyer folks have been extremely pleased with the consistency of the Red Angus cattle and the way they meet the specifications and target objectives of their program. There was no truer example of this than the results produced by the Wagonhound cattle this past year. Matt and his team were equally pleased with how their cattle performed through the program. As calf feds, and with many of the cattle being harvested at any average age of 13 months, the overall results of the cattle was 92% Choice and Prime, along with 92% of the carcasses being a Yield Grade 1, 2 or 3. Performance like this is rare, but represents one of the main reasons the Wagonhound operation is using Red Angus genetics as the foundation of their breeding program. Myron Edelman shares the bull buying responsibilities with Matt, and these results illustrate what can be obtained through well defined selection criteria and having a specific end target in mind.

Beyond bull selection, Myron also played a role in the decision to market their cattle through MNA. In the end, it was MNA's pricing system that proved to be what the folks at Wagonhound had anticipated, and one of the primary reasons for their decision to use the Meyer system. "We were very pleased with how the cattle did and how well the Meyer pricing system worked," says Matt. "They (MNA) realize they won't get the good quality cattle if the producer doesn't make money and they have a system in place to aid the producer in accomplishing that." For Philip and Harley, their outlook on Red Angus is also very positive. With Red Angus bulls on their cow herd in addition to feeding out other sets of Red Angus cattle, they have seen the type of results from these cattle that make them believers. They feel the good dispositions exhibited by their cattle are crucial to their staying healthy and on feed. They also find Red Angus to be easy fleshing and growthy, with excellent carcass characteristics in the cooler. Overall, they have been very happy with the results from the Red Angus cattle. "Red Angus cattle don't take a back seat to any other breed," states Philip. "With good performance and strong carcass traits, we really believe in Red Angus." The MNA program is very excited about future opportunities that exist not only for their product, but for how Red Angus cattle can fit into their growth plans. More specifically, the MNA program feels that the expansion of the utilization of Red Angus cattle in their system provides a strong point of differentiation in the market place.

In a day and age where the "Angus" name has been tied to cattle that only possess a 51% black hide, the MNA folks feel strongly that they are able to provide the consumer a more consistent, more valuable product through the documentation of Angus genetics in their cattle. The results they have already seen from documented Red Angus cattle, makes the MNA program very eager to increase their Red Angus numbers. The cattle business has recently experienced some of the best times in the industry's history, but producers will be faced with many challenges due to changes taking place within the industry. From industry consolidation and environmental issues to consumer trends domestically and the pursuit for a global beef market, producers will have to position their operations to address the ever changing market conditions, while at the same time find a way to stay profitable. For some, participation in programs like Meyer Natural Angus Beef will provide them the system they need to not only survive, but prosper in the future. For Philip and Harley, they believe it will take specializing for operations of their size to remain in the business. They also believe that more and more consumers will continue to place higher priorities on knowing about the food they eat, and will continue to gravitate towards more source verified and naturally grown products like MNA. It is this mindset, coupled with the structure of the MNA system, which will allow the Lerseth family to continue feeding cattle in South Dakota. "Feeding cattle naturally seems to be the way to go," states Philip. "For us, the combination of the Meyer program and Red Angus cattle really works for us.

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