Marketing and production plans
Even though we’ve barely gotten into summer, it’s time to start thinking about marketing the spring-born calves. An old friend of mine once told me It’s not what you can raise, it’s what you can sell. I think there’s a lot of truth in that statement. Sometimes it’s not our production practices or genetics that determines our bottom line so much as it is our marketing ability and our ability to capture value.
In mid-June I had the opportunity to attend the Beef Improvement Federation conference in Oklahoma City. I chose to drive rather than fly, so I had a lot of time to think about the beef business and some of what I had learned through the week. And that’s when it began to occur to me just how linked marketing and production need to be if we’re going to succeed.
One of the topics discussed was a comparison of crossbreeding vs. straightbreeding. Now this was one topic that I think about 95% of the room had their minds pretty well made up as to where they thought the best route to profitability lies, and there were enough examples given to support whatever position you hold. As I listened I couldn’t help but think that margin between success and failure wasn’t which strategy a rancher pursued, but rather the ability to execute that strategy and at the same time produce a product that fits a market need.
For instance, one part of that morning’s discussion was the various branded beef programs that offer significant premiums for higher grading cattle, and how feeder cattle that can perform well in that system are highly sought after by some cattle feeders. But if those buyers don’t know how well your cattle fit that grid, your chances of capturing those premiums are slim. It may take additional information such as the average genetic merit of your sires to really capture that value. We also have to make sure that we not concentrate so much on price premiums that we lose sight of traits such as cow longevity and the whole cost side of the equation.
Crossbreeding systems have a proven track record of improving performance, especially on the maternal side. That said, if the wrong genetics go into that crossbreeding program, you could easily end up with a product with very little buyer appeal. During one of the presentations at BIF there was a slide of some heifers that I think that most would agree look like the kind of cattle that have a much lower probability to finish on time and hang up a carcass that will grade. One of the feedlot representatives on the panel stated that if he lined up his managers and showed them those cattle, the argument would be over who would get stuck with them. Added performance isn’t worth a whole lot if no one really wants the cattle, or will only buy them if they are cheap enough.
I think of all the ag enterprises, cow-calf production is the most complex, at least in terms of working with the resources that are available and what road to take that has the best chances to make money. I’m convinced that there are no two operations alike, or if they are I haven’t met them yet. The great thing about this business is that there is more than one way that will work. Finding that spot where what you can raise matches up with what you can sell (for a profit) can be easier said than done but I think really is the key to success long-term.