Veteran Cattle Feeder Lee Borck Says Grid Marketing Cattle is Like Supplying Premium AutomobilesWed, 20 Jun 2018 12:09:47 CDT
In the mid-1990s when Kansas cattle feeder Lee Borck saw the first value-based grid markets, he realized it was like a past generation of new car buyers and sellers. He talked about that recently.
“They didn't have a lot with 200 cars on it you could pick from. They had two of them sitting in the front window and you'd go in, you'd write the order down,” said Borck, the Manhattan, Kansas-based chairman of Integrated Livestock Systems and the Beef Marketing Group Cooperative. “And you had the price for the bare car. But then if you wanted air conditioning, or if you wanted floor mats, or if you wanted electric windows. This much for the air conditioning, this much for the floor mats, and this much for the windows. That's the way we approach selling cattle. Cash is a base index, that's average. That's your Plain Jane auto.”
To watch a brief video clip featuring Lee Borck, Manhattan, Kansas-based chairman of Integrated Livestock Systems and the Beef Marketing Group Cooperative, compare grid marketing cattle to supplying premium automobiles, with extra variables like weather thrown in, click or tap the PLAYBOX in the window below.
If packers wanted better-than-average grade cattle, they needed to pay a premium. This much for more marbling, this much for leaner carcasses. With DISCOUNTS if the cattle got too fat.
“And we got to be just like the automobile companies were,” Borck said. “We produced more of what the packer wanted and less of what he didn't. And so, we were able to get premiums out of it. It's really pretty simple economics.”
While that might sound like producing premium beef became very routine, it has never been cut and dried, or as simple as those driving economics.
“It wasn't that we were extremely good to begin with in doing that. It took years for us to really figure out how to be efficient at what we were doing,” he concluded. “There were mistakes and you'd think you had it figured out. And you hit a weather event that would... You didn't know whether it was right or not then because it would blow up the information that we were gathering. So, you'd almost have to say it was a lifetime's worth of work to be able to get to where you're fairly comfortable. But even today, it's not an exact science.”
Borck and his network of allied feedyards continue to innovate and respond with ever greater precision to the consumer demand for premium beef.
Source - Certified Angus Beef
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