Agricultural News
Better Cattle are In Demand and the Bar Keeps Rising
Thu, 30 May 2013 11:20:12 CDT
When supplies are tight, all feeder cattle are worth more, but does that mean there are no premiums paid for better ones?
John Butler, chief executive officer, Beef Marketing Group, says, "The way I that I look at that is that, really, the cattle that are of known genetics and known animal healthcare and practices and management and nutrition become more valuable to me. And here's why: because in today's marketplace, that 700-pound animal is a much more significant investment for me today than it was when drought conditions and available corn so on and so forth were plentiful."
The risk decreases when a feeder has a good idea of how the cattle will perform and grade.
"You can actually look at it-and we do-that the tide has turned in such a way that those producers who spend the time and effort to really get the right genetics and manage their herds accordingly have a greater opportunity now for more profitability than perhaps they did when cattle supplies were plentiful."
National quality grading trends have shot up in the last five years and that also begs the need for more of these better cattle, says Certified Angus Beef Cattle Specialist Paul Dykstra.
"Cattle that, ten years ago, would have rung the bell, would today be average or even below average. And, so, that just makes the target that much higher and really makes, I think, particularly the cow calf operator very responsible for decisions that they are making at the ranch level to zero in on some very lofty goals in terms of end product merit."
Beating the average is what it takes to earn more money, he says.
"I think that, unfortunately, the increase in quality that we've seen across our industry in end-product merit has simply moved the bar higher. And, as a result, that makes us all have to achieve more in order to receive a premium. And that's the only thing that exists in the increase in quality grade and consumer acceptability of our beef product."
Still, the good news on the bottom line is that happier consumers will spend more to support those who keep lifting the bar on beef quality.
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