Feeder cattle transparency

Mar 29, 2013

Value based marketing is nothing new to the beef industry,

but it has been unavailable to cow/calf producers selling calves. For the most part, you’re paid on the average, you have added value because of a preconditioning program, or you have a solid reputation with cattle feeders who already know how your cattle perform.

When you buy your bulls to breed the cows, you have tons of data that you can utilize to pick the right bull for your needs, and the list of selection traits is getting longer and more accurate. Add in the new DNA gene marker data and you have even more information to pick just the right bull.

But what about feeder cattle? Up until now, there has been no way for cattle feeders to buy feeder cattle with the confidence that they are getting great feeding performance animals, instead of animals prone to illness. More than not, the cattle feeder is taking a gamble buying most feeder cattle. With razor thin margins in the cattle feeding sector, feeders have become very selective because of high feed costs.

The last cattle on feed report showed that placements were down more than expected. And that’s because feeders can’t find suitable cattle that they have a chance to make a buck on. With cost of gains in the feedlot running around a $1.30 per pound, cattle feeders have become very picky, and if they can’t buy them right or know what kind of feed performance they are buying, they just don’t want them unless they are real cheap.

This may change soon. A company called Verified Beef is trying to change the feeder cattle market by providing cow/calf producers with a certificate of genetic merit. Just think about it… you’ve been buying the best bulls you can afford for years and your females look good and have a calf each year, unassisted of course. You wean them and send them to market. All your genetic efforts, for the most part, are not adding value to your ranch operation unless you feed the cattle yourself, which most cow/calf folks don’t really want to do. This new tool could add that extra value to your calves that you deserve.

The program is a verified process that has been endorsed by USDA and they score your cattle on three fundamental areas: genetic merit, calf management, and age and source verification. The program is a third-party audited process.

On genetics, they want the EPD data on all your bulls for the past 10 years. They make assumptions that your older bulls will represent the genetics of your mature cow herd and the younger bulls will represent your replacement heifers. They combine the data and run it through their algorithm calculations to come up with your genetic merit score. That score is represented in dollars per hundredweight, which will represent the genetic value of your calves.

They have been working with several ranches that retain ownership of their calves through the feedlot and found their genetic merit calculations have supported the kill and performance data of those calves.

They claim that with the work they have done, they have an 89 percent accuracy rate.

The program will also carry other features like auditing your cattle for the various niche market programs like Non-Hormone Treated Cattle, for the European Market and age and source verification, natural beef markets and grass fed markets, which all require some form of third-party documentation through USDA’s Process Verified Program.

You will then be given a feeder cattle certificate that will provide cattle feeder information on average daily gain, carcass weight potential, feed conversion, ribeye area, yield grade and percentage of Choice that can be achieved with a particular set of cattle. They will also validate your calf management program and document your health protocols and weaning process, or if they have been weaned and feed bunk broke.

Your preconditioning program is currently the only way you can add value to your weaned calves. Feeders see a lot of value in feeder cattle that will come off the truck and get to the feed bunk faster with as little stress as possible. In today’s market, feeders don’t want to deal with a set of balling calves.

Verified Beef is currently in the introduction stage of their program and is just getting off the ground. It is an exciting tool for cow/calf operators and could provide them with more leverage in the market. If a buyer of your feeder cattle has all the data and you’re being totally transparent about your calf management, the genetic portion should have greater value in the market for both the feeder and the feeder calf supplier. — PETE CROW