EXPORT MARKETS OPEN UP NEW MARKETING POSSIBILITIES

by: Clifford Mitchell

Marketing plans often take many shapes or forms depending on the firm's overall goals. Developing untapped resources often adds another option for these outfits to make a profit. As production costs continue to rise, market diversity will sometimes help defray expense.

Export markets have been somewhat elusive for some firms, while other businesses thrive in this marketplace. Identifying these potential markets is the first step, because many guidelines must be met to qualify products for export.

“If I don't take advantage of export markets, I limit the marketplace for my genetics. Rules and regulations are part of the deal. If you want to take advantage of this market you just need to make up your mind to live by these regulations,” says Fred Schuetze, Buzzard Hollow Ranch, Granbury, Texas.

“Each country has specific guidelines for semen, embryos or live animals,” says Doyle Sanders, DBL D Bar Ranch Beefmasters, Industry, Texas.

Pre-qualifying semen and embryos so producers have something ready to export to foreign buyers is a good place to start. Working with reputable outfits or a broker will help make sure regulations are not overlooked.

“Qualifying semen for most export markets requires your bull to be quarantined for at least 60 days. Decide what countries you would like to market semen to and get it qualified for those markets,” Sanders says. “There are people that know what criteria need to be met for each country. Work with a broker, your genetics export company or other qualified foreign importer to make sure every detail is covered.”

“You have to spend the money to house your herd bulls and get the semen qualified for export to the countries you have identified as potential markets. If you want to export embryos, there are places that know these guidelines and will help you get the embryos ready for export,” Schuetze says. “Most local veterinarians don't know the guidelines for export. The USDA web site is a good place to start. Work with a broker or find someone to help you with the export arrangements. Knowing these regulations will become a full time job before you know it. These regulations are always changing, sometimes as frequently as every every months. ”

Before BSE was discovered in the United States, many breeders depended on the export market to sell seedstock. Currently, some borders are re-opening to American seedstock and breeders are taking advantage of this protocol. However, shipping costs are playing a role.     

“There was a period of four or five years where we didn't ship any live animals, but we're starting to ship a few live animals now,” Schuetze says. “I always like to send live cattle to my international customers, but the embryo will probably be the way we market a lot of genetics due to rising transportation and health costs. We have built a presence around the world and potential customers are looking for established breeding programs to help upgrade their stock.”

“I haven't shipped any live cattle yet. My good friend, Bub Epley, of Rancho Tres Hijos in Tilden, Texas just shipped eight Beefmaster heifers to Panama in January. These are the first such exports made to Panama. Our ranch is following his lead and I hope to do that in the near future,” Sanders says. “I have marketed enough semen to know that potential customers want to buy it in volume and you need to have a qualified semen bank built up to meet potential demand. Since some of the export markets, particularly Mexico, have re-opened the demand for live bulls and heifers have helped strengthen prices for our cattle.”

As producers look to potential export markets, some firms may not be able to make the commitment to international customers. Establishing contacts and customer service demands are critical.

“Person to person contact is very important in this market. Buyers are a long way away and you have to build a trust,” Sanders says. “Even though these breeders are a long way away, a handshake still means a lot. We have to maintain contact and follow up after we make a sale. You have to be committed to the travel and extra time it takes to develop these relationships.”

“Over the years I have been fortunate enough to judge shows and speak at international field days. Many events where there are large congregations of cattlemen,” Schuetze says. “Meeting and developing relationships with these people is a big advantage.”

Breed associations also take steps to help market genetics to an international audience. Obviously, each breed takes different approach, but some work with breeders to represent them abroad. Working with organizations such as your breed association may help increase export demand.

“I have been fortunate to be able to travel to other countries as a volunteer for Beefmaster Breeders United (BBU) and we receive backing from the U.S. Livestock Genetics Export Inc. (USLGE) in a lot of these ventures. Members travel on behalf of the association, making herd and livestock show visits to promote Beefmaster cattle,” Sanders says. “The international market is a good way to grow our breed. Cattlemen all over the world are becoming familiar with the “six essentials”. I am currently involved with BBU and our international committee sponsors with a project to donate semen to cattlemen in Thailand, trying to introduce them to the Beefmaster breed. BBU has been involved with semen donations to a lot of countries. This is a good way to get calves on the ground and expose producers to our product. ”

Timing plays a role as cattlemen travel to potential export countries. Most breeders target certain events as a good place to tap into future markets. Marketing can take many forms. Presence on the internet could be a good introduction.

“I travel internationally with my engineering business and I try to locate events like field days or stock shows to help promote our breed. I look for cattle shows in the areas I am going to be,” Sanders says. “I also travel to a lot of cattle organization meetings abroad. You have to have a web site, be willing to do some international advertising and your cattle need to back it up. Something as simple as showing international cattlemen pictures of Beefmaster cattle can get them interested.”

“This day and time I believe you have to have a web site to help marketing efforts. I expect 30 percent of my international business comes from the web site,” Schuetze says. “It is a great way to introduce semen and embryos to the international market.”

Just as U.S. breeders target international events as a place to meet potential customers, interested international guests use these venues to meet American cattlemen and view their genetics. These events usually rely on volunteer groups to help host cattlemen from other countries and make them feel at home.

“It all starts with the international committee. This is a volunteer group that hosts all our international guests. They do a tremendous job providing hospitality and a place to conduct business,” says Joel Cowley, Houston Livestock Show and Rodeo Executive Director of Agricultural Exhibits. According to Cowley, this group hosted its first guests in 1950, and in 2009, registered 1,826 guests from 94 countries.

“Our volunteer committee has aggressively tried to locate and help our international guests. A lot of our guests are cattle, horse or deer buyers. Our numbers are growing every year. There is an opportunity for increased export business,” says John Canavan, International Committee Chairman, San Antonio Livestock Exposition.

Livestock shows throughout North America showcase many different breeds and species of livestock. Foreign guests use this as an opportunity to meet with potential genetic suppliers and to closely inspect samples from each breeding program.

“Livestock shows, like Houston and San Antonio, do a good job promoting to the international market. A lot of people attend these events from all over the world,” Sanders says. “These events are good for Texas cattlemen.”

“I have to attend the events where I get the most “bang for my buck”. I have always had a display of cattle at Houston and spend a lot of time there during international week,” Schuetze says. “Houston is a good place to meet people and I try to go to the Toronto Royal some years. I still do all the AI here at the ranch and I travel to Australia three times a year to visit a good client there, so my time is somewhat limited.”

International guests, especially from the Latin American countries, attend these events and tour ranches in the area. There is potential for a lot of business to be done in a short time period.

“A lot of our guests will come early and tour some of the larger ranches in the area. It is a package deal that attracts international guests to Houston. The first week of the show we have a wide variety of genetics on display and smaller breeders have a chance to showcase their cattle,” Cowley says. “More and more breeders are attracting international guests to the ranch. The Texas Department of Agriculture (TDA) does a great job helping facilitate this. Last year through sales we tracked at the show and from the survey done by the TDA, close to $1 million in business transacted during the week.”

“I like to think our hospitality area is like an Embassy for our foreign guests. They get VIP treatment and can learn about agriculture in other countries,” Canavan says. “We have two people from the TDA who serve on our committee. They work hand-in-hand with our international buyers arranging things like transportation. It's great to have these guys on our committee. They are constantly helping buyers and are maintaining these contacts long term. During the first week, when most of the auctions are taking place, we have several breed associations and other organizations that have booths right in our international room.”

As the export market works to find the most feasible way to conduct business, livestock shows will continue to play a role in the marketing plan for firms interested in export markets.

“Regulations and border closings certainly changed the type of business being done. Most breeders adapted with the sale of semen and embryos. The last couple of years, as restrictions lightened up, we have seen an increased interest from international buyers for live animals,” Cowley says. “Between 2003 and 2006, our open cattle entries declined by 26 percent. However, these same breeds had displayed a nine percent increase by the 2009 Show.”

Tours are another way to expose foreign cattlemen to American genetics. Hosting these groups helps expose what many ranchers have to offer the international market.

“We have hosted a group of officials from Thailand to introduce them to Beefmaster genetics,” Sanders says. “Back in August the BBU took a group of South American cattlemen to some Texas ranches which resulted in semen sales and shipment of live cattle to Panama.”

As regulations continue to ease foreign cattlemen realize U.S. genetics could be a way to add some genetic diversity and upgrade native livestock. Breeders looking to add this component to the current marketing plan must be willing to stay the course and make a long term commitment. Those willing to make this promise will likely get rewarded for their loyalty.

“I have been travelling to foreign countries for 35 years. People know how I breed cattle and that I have a certain type,” Schuetze says. “I am not going to change the way I breed cattle just to meet the export market. You can teach yourself some of the different protocols needed for export, but it usually depends on where you're going and what you're trying to get there. It takes a long term commitment and you have to take care of your customers.”

“Tapping into export markets is not a fly by night type of thing, it takes a long term commitment,” Sanders says. “Make a long term commitment to make sure you have satisfied customers. This is going to include travelling to see cattle in foreign countries from time to time. As breeders, none of us can afford to create unsatisfied customers.”







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