By Steve Suther, Director of Industry Information, Certified Angus Beef LLC
Does it pay to target commercial calves for the premium quality beef market?
At Certified Angus Beef LLC (CAB), we get that question a lot. Now that all calves are worth so much more than they were a few years ago, what difference does it make if we aim for quality, or not?
In the short run, it probably doesn't matter a great deal, but it makes sense to get in position for the long run now, when you can afford to.
Several U.S. producers have discovered that stacking generations of above-average marbling genetics can build commercial herds capable of producing 30% Prime or better, often at $200 per head premiums.
When you sell bulls this year, they may bring half-again or even twice what they did a couple of years ago. Of course you try to put yourself in the buyer's boots. They trust you. They study the numbers ahead of the purchase and try to make sure the bulls will improve their herd.
You earn that trust not by "people skills" alone, but through leadership and foresight that anticipates demand in light of genetic research and the latest selection tools. You stand behind your bulls and your customers know that. What more can you do?
Read the signals that say it's time to join in the market trend toward higher quality beef, and lead your customers there with bulls that are above breed average in marbling, while balanced and strong in other economically important traits. You have already read the research reviews, so you know there are no negative correlations, no price to pay in terms of functionality. All you do is add marbling as you build the best genetics for the next generation.
You and your customers may be somewhat disconnected from the "grid marketing" world in which more and more feedlots sell finished cattle to Canadian packers, especially if they sell calves at weaning. But with the rise of information technology, buyers increasingly keep track of sources. They know where the high-grading cattle are and they will come back to bid more next year.
Cattle feeders want uniformly predictable growth and grade, so one emerging area of customer service is to become proactive in building relationships with feedlots, channeling feedback to your bull buyers and helping them cull from the bottom end as they build on the best.
A typical pen of cattle
has $1,000 difference in value from top to bottom these days, but the most valued strings of cattle cut that in half.
You're fortunate to be producing a breed of cattle that can literally do it all, even without cross breeding, although many customers will continue that practice for several good reasons. Recent discussions in the U.S. have concluded there are legitimate reasons for choosing to maintain a product-focused straightbred Angus program, just as there are for crossbreeding. The key is that either approach must follow a plan from start to finish.
