Agricultural News
Value-Based Grid Marketing Maximizes Returns For Above Average Cattle
Wed, 13 Jun 2012 13:48:08 CDT
Value-based grid marketing can help cattle producers maximize returns says Pete Anderson of AgKnowledge Services.
"If you have cattle that are above average in terms of carcass value, then you probably shouldn't be selling them for average," he says.
To take advantage of grid marketing, a couple of considerations have to be made, Anderson says.
"One, 'What do you expect out of your cattle?' You have to have a history of predictability. You have to know what the carcass value is and know what they've done historically and what to expect with this set of cattle. And, two, you have to understand how grid arithmetic works."
Anderson's white paper on grid marketing which is available by clicking here, helps sort that out.
http://www.cabpartners.com/news/research/GRIDMARKETINGWHITEPAPER-6-4-12.pdf
He says after doing their homework, producers should start thinking of their cattle as a brand.
"In the cattle business, we typically think of cattle as a commodity because for a lot of our history, they've all been sold at the same price. Grid marketing presents one opportunity to get more or less than that price for cattle that deserve more or less."
"To turn your cattle into a branded product, you have to have what every brand has which is a history of consistency, proven quality which you can document before somebody buys it."
If you can't yet document your history, Anderson says it's time to start going after that information. Producers will need to work with the feed yard and the packer to get that data. Anderson says that data from multiple years should be collected due to the variability of a number of factors from year to year.
"Once you've got that, once you know what they're capable of doing, grid marketing represents a great way to capture that value.
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