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A COMPETITIVE EDGE: FOR FLORIDA'S STEVE HINES, ANGUSSOURCE ADDS VALUE AND BUILDS BUYER DEMAND

by: Eric Grant

For Steve Hines, who runs about 800 head of commercial and registered Angus cattle near High Springs, Fla., the advantages of AngusSource are clear.

When he first enrolled in the program three years ago, he wasn't sure it would make that big of a difference when it came to building demand for his calves.

But a year ago, when a repeat buyer snatched up three potloads of his calves at a $3/cwt. premium over the market, Hines knew his efforts to improve his commercial marketing practices were paying off.

“AngusSource is really one of the least-expensive ways that you can add value to your cattle,” he says. “It makes your calves worth more money, and the buyers appreciate the fact that they know the age, source and genetics of the cattle.”     

AngusSource, which is an industry-leading USDA Process Verified Program (PVP), enables producers to document and verify the age, source and genetics of their calves for buyers. This in turn, opens up opportunities for premium prices and increased demand for their calves.

Cattle enrolled in the program are identified with the official AngusSource eartag and verification certificate, and their verification remains intact throughout the animal's lifetime and through all marketing and production channels.

The program's eligibility requirements are relatively simple, says Sara Snider, director of the program:

“Cattle must be sired by a registered Angus bull. Calves must be enrolled by the ranch of origin, and at minimum, must have a record verifying the birth date of the oldest calf within the enrollment group.”

An industry perspective

For John Butler, chief executive officer for Beef Marketing Group, a cooperative of 15 feeding operations, the benefits of AngusSource are too many to count.

First and foremost, the program allows him and others in his cooperative to accomplish their primary goal: to focus on developing value-added beef programs driven by consumer demand.

“As a procurer of feeder cattle as well as someone who offers competitive, retained ownership programs, AngusSource cattle come to us with a promise,” says Butler. “The AngusSource promise is that the cattle are of known genetics and they have the additional benefit of being age and source verified. AngusSource has become a trusted, credible PVP that fits well with the branded beef programs that we are involved with.

“The great thing about AngusSource is that it allows virtually any commercial producer to produce cattle that can be eligible for branded beef programs like Certified Angus Beef (CAB),” Butler adds. “And when those opportunities are open, I think there are pretty significant benefits in terms of real premium dollars for now having cattle that can be eligible for meeting the specifications of these programs.

When it comes to qualifying for CAB, for instance, at participating plants AngusSource also allows cattle that are not 51% black hided to be eligible for Certified Angus Beef and Certified Angus Beef Natural, because the producer can verify that the cattle were sired by registered Angus bulls.

“Being able to verify the sire's genetics adds confidence among buyers that the seller is truly focusing on breed specificity and quality,” Butler adds. “And participating in this program also helps producers because many of them have received carcass data and other information on their cattle after they're sold.”

Perhaps the greatest value of PVP programs like AngusSource is that they provide a direct information link between all sectors of the cattle industry.

Harris Ranch, which is a leading U.S. beef producer, packer and exporter of U.S. beef to Japan, depends heavily on age- and source-verified cattle.

“The one issue that dominated the attention of the U.S. beef industry in recent years was export market accessibility,” says Harris Ranch's Mike Smith. “When we lost many of our beef export markets several years ago, it's estimated the U.S. beef industry was losing $3.5 billion per year, or roughly $150 for every fed steer and heifer marketed each year.”

A key component to recapturing, securing and expanding export markets, says Smith, is producer participation in programs like AngusSource.

Japan in particular requires all beef imported into its country to be processed by USDA-certified plants and procured from suppliers who are PVP or USDA Quality System Assessment (QSA) certified, says Smith.

“Without question, the most restrictive export requirements imposed on us are from Japan,” he explains. “Not only are detailed and descriptive processing procedures and record-keeping required by Japan and other countries, but all beef and beef products marketed there must be obtained from cattle determined to be 20 months of age or younger at harvest.”

One of the key advantages to AngusSource is that cattle enrolled in the program can be accepted into most feedlot's pre-existing PVP or USDA Quality Assessment (QSA) programs.

“For farmer-feeders who market directly to packers, AngusSource offers a Feedyard Umbrella Program for ranch-enrolled calves,” says Snider.

For all of these reasons, most of the nation's packing companies now recognize the value of having a reliable source of AngusSource cattle so that they can not only position themselves within the U.S. market, but also capture international opportunities as well.

“We're currently getting anywhere from $25 to $30/head premiums for age-verified cattle right now,” says Ron Rowan, director of Beef Northwest's risk management and alliance-development programs. “That means producers who enroll in this program have an opportunity to capture premiums.”

To help producers market their AngusSource cattle, American Angus Association's commercial programs department is working with livestock markets across the country to organize and promote special AngusSource sales.

“These sales, held in conjunction with the livestock markets' regularly scheduled value-added calf sales, allow producers the opportunity to work with others to market large numbers of AngusSource calves to potential buyers. That not only builds awareness of the program, but also demand for the cattle,” says Snider.

For Hines, perhaps the greatest benefits of AngusSource are that the program provides him with a powerful way not only to connect with buyers of his cattle, but also to add value to the overall production of his ranch.

“It's worked well for us,” he says. “It's added value to our calves, and captured the attention of people who want these kinds of cattle. I've been happy with the results we've seen.”

For more information about AngusSource, please visit www.angussource.com. For more information on USDA Process Verified Programs, please visit http://processverified.usda.gov

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