COLLEGE STATION — Beef alliances may bring cow/calf producers a little more leverage, according to an agricultural economist with the Texas Agricultural Extension Service.
Alliances are usually coordinated efforts to cross different sectors of the beef industry, said Dr. Ernie Davis of College Station. Cow/calf operators make an alliance with cattle feeders, packers and retailers. This extended ownership can often help producers gain a little more control of their markets, Davis said.
Presently, many cow/calf producers lack control because they are so far removed from the consumer. They have a young animal that is still probably a year away from being finished and ready to go to the packer, Davis said.
Additionally, there are nearly a million small producers with beef cattle. “They’re big in number but small in size and can’t have any impact on the market unless they have some type of marketing or market coordination scheme to organize and control what they market and how they market. Once you sell the calf, you’ve lost control of the market,” he said.
That’s the way Childress producer Minnie Lou Bradley felt about 12 years ago when she and her family formed Bradley Premium Beef.
“I felt I wasn’t getting the real value for my cattle,” said Bradley, who was one of the guest speakers at this year’s annual Beef Cattle Short Course at Texas A&M University. Even though the family owned a purebred cattle operation, it still sold some calves to feeders to be finished as beef.
“I started selling beef off my porch to get a little more value for my cattle,” she said.
Later, as their business grew, the Bradleys opened a U.S. Department of Agriculture-inspected beef plant and started seeking cooperators — other ranchers — to supply cattle for that plant. “The only way to get cooperators was to pay them a real value for their cattle and give them information about their cattle.”
The Bradleys manage the calves from retained owners in 17 states from Oregon to Florida. The owners are required to have calves on a stringent mineral, vaccination, nutrition and management program before they come into the system. The Bradleys visit with each rancher before the calves are brought into the system to ensure the best management for each calf.
By keeping track of each calf as it goes through the feedyard and then to the packing plant, the Bradleys established a value-based system which lets ranchers know which of their calves are performing well. Each calf is treated individually so performance can be traced back to the rancher’s genetics and management program. Calves are tagged and weighed with their health records kept as they go through one of two commercial feedyards approved for the Bradley program.
Most feedyards keep records only on “averages” from pens of calves — individual records are not kept.
“We’re real proud of what we’ve been able to learn and share with other people. The better we get their cattle the better we do, too,” Bradley said.
When the finished animal arrives at the packing plant, its rate of gain and carcass information is logged individually. The boxed beef is sent to 18 states, she said.
Davis said, “With Minnie Lou Bradley, she started off small and was successful. And they got a market and expanded on that market. To me, that’s niche marketing.”
Nearly all of the success stories — such as Bradley’s and the certified Angus beef (CAB) program — have involved a group effort of some form of vertical integration or retained ownership, Davis explained.
This effort can be as simple as cooperating with neighboring ranches to put together a load of similar cattle to send to the feedyard, Bradley said.
There are some risks associated with beef alliances, Davis warned.
“If you’re into an alliance, you’re extending ownership (of the calf) throughout the system and you can go from a loss center to a profit center,” he said. “It could be the other way around, too, but you know there are certain risks attached anytime you’re in business.”
Bradley said there were a few years she doubted the wisdom of her move. But, she said, “It’s beginning to be rewarding. We’re seeing (our cooperators) improve their cattle, seeing them improve bottom line, and we’ve improved our bottom line.” -30-