FIND THE BEST MARKETING PROGRAM FOR YOUR OPERATION

by: Stephen B. Blezinger, Ph.D., PAS

Part 2

In Part 1 of this series we began a discussion and evaluation of different marketing programs available to the cow-calf producer. As mentioned in the previous article, having a sound marketing program (how you will sell your cattle) is absolutely critical to every producer in an effort to receive the best sales price for your animals. Some programs are very simple: load your cattle, take them to the sale barn and pick up your check the day after the sale. Others are more complicated and require research, work and in some cases adherence to a specific set of guidelines. In any case, it is the producer's choice which plan to follow. It's just important that there is, in fact, a plan.

Here we will pick up where the last article left off.

Branded Marketing Programs

A number of branded marketing programs exist. In many cases these are related in some manner to the production of a more specific animal, breed or breed type, all natural beef, organic beef and so on. Generally, these are designed to fit into a niche market of some type. Examples would be Laura's Lean Beef, Nolan Ryan's All Natural or one of the organic beef programs. The programs have different requirements for participation and in some cases require the incorporation of specific breeds.

Pros     

1) Can generate premium prices for cattle fitting the program

2) Generally good to work with.

3) Some programs carry with them heightened social acceptance and promote sustainability

Cons

1) Have specific guidelines that the producer must adhere to. Some of these can be challenging.

2) Some programs require time and investment to have the operation made ready to participate (i.e. organic programs).

Comments

These markets can generate some premium prices and are generally not too difficult to work with. In many cases this can be a very good long term option.

Direct Beef Sales Program

A number of producers have developed programs where they sell beef directly off the farm. These types of program have been in place for years but most recently have seen an increase in buying interest from consumers who want firsthand knowledge of where their beef comes from.

Pros

1) Can generate a premium for the beef produced

2) Gives the producer an opportunity to create a branded product and more control over pricing.

3) Provides direct participation into the beef production chain

Cons

1) Require a lot of hands on management, particularly with regard to the logistics of dealing with the meat supply and addressing inventory surpluses and shortages.

2) Market development beyond sales to individuals such as developing contracts with stores, restaurants, etc. makes the program much more challenging.

Comments

Direct beef sales programs can be very rewarding. They do require a lot of work and the logistical management can easily overtake the actual production management demands.

Grass-fed Beef Program

A program that has emerged over recent years has been the grass-fed finished beef program. Grass-fed cattle are produced, as the name implies, primarily on forages and with very little supplemental feed. This program is essentially an all-natural program since it does not allow for use of antibiotics or hormones. It also does not allow for feeding of high starch feed ingredients or even high levels supplemental feeds in general. This reduces the level of gains and feed efficiency.

Pros

1) The prices paid for the cattle in these markets is commonly higher than the other markets listed above since the beef produced is of greater value at the retail level.

2) Done properly these programs create what can be termed as a more sustainable production system since forage production must be optimized and subsequently consumed by the animals as its primary and most significant nutrient source.

3) Use of supplements is limited thus that cost is also limited.

4) Is often considered a more ethically and responsibly centered program.

Cons

1) Production levels are diminished since nutrient intake on forage will not drive high rates of gain, especially at higher body weights.

2) Use of nutritional “tools” such as ionophores or antibiotics is limited. Thus feed efficiency is not as good as conventional systems.

3) Health must be managed carefully through non-medicinal routes. Exposure to various diseases and pathogens is increased.

4) The cost to produce a given pound of beef may be increased.

5) The time required to own a given animal to finishing is increased.

Comments

Given the pros and cons listed above it will be necessary to closely monitor expenses and revenues to determine the level of profitability this program affords. Developing and implementing a grass fed program ongoing will take some practice and trial and error to fine the optimal system and standard operations (SOPs) for your farm working with the program guidelines and restrictions. Consistent, year-round forage production is a key.

Another factor that must be considered to truly make this program work will be the genetics of the cow herd and bulls. Cattle with a propensity to gain on grass will be key. Secondly, animals that will finish at reasonable weights (on grass) will also be important. Use of breeds with high mature weights should probably be avoided.

The challenge to this program will be to manage forages properly and to provide maximum supplementation, as needed, within the AGA guidelines. Properly formulated grower and finisher supplements should be used for the grass-fed cattle. Secondly, it will be highly advantageous to maximize weaning weights while the calf is still on the cow and has access to milk.

Conclusions

Implementation of the grass-fed program will not be difficult once some familiarity with the program is gained. Proper on-going nutrition is required to drive cattle performance and maximize gains and efficiency. This will help keep production costs down, improve rates of gain so time to finish is not excessive.

Find Conclusions

The decision of which of these marketing programs (or combination) to use will be somewhat fluid depending on the markets and the ability to forecast the markets to at least some degree. Because the market changes the use of one program or another may also change. Since some programs are longer term, requiring an extended commitment, this must be factored in as well.

Finding the exact program which best fits a given operation will take some work, research and trial and error. The goal is to find that program or program(s) which will maximize revenues and net profits for the farm.

Copyright 2016 – Stephen B. Blezinger, Ph.D., PAS. Dr. Stephen Blezinger is a nutritional and management consultant with an office in Sulphur Springs, Texas. He can be reached at sblez@verizon.net or at (903) 352-3475. For more information please visit Facebook/Reveille Livestock Concepts.







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