Market Closeout
Don’t let the light go out.
I’m not a cynic. In fact, I pride myself in being a full-blown optimist. My mom used to tell us that the pessimists were usually right, but it is the optimists that end up changing the world. So, it is against my nature to share the following statement: It is increasingly difficult to succeed in the cattle business.
When I’m talking about success, I am not talking about strictly profits or providing well for one’s family, even though those are pretty darn important. I’m talking about living with a purpose, being treated fairly in the marketplace, providing a great product, building a sense of accomplishment, and maintaining one’s independence. These things, at least at some level, are possible for everyone in the cattle industry.
It is more than just a little bit disturbing that if you gather a group of veterans of the cattle industry (grizzly veterans), and get them to answer honestly, most of them will say that they think it is more difficult to succeed in this business than it has ever been; that the lights of the industry are growing dimmer.
This frustration has led to a degree of lost hope. In part I think this has been fueled by a widening gap between the haves and have-nots. This gap has always existed, but never, ever, on this level. The gap is widening at a pace we have not experienced before. The coronavirus pandemic has accelerated these trends even more. I’m not so naïve that I believe we can rectify the situation by attempting to legislate our way back to the good old days. Rather, I believe that we can return optimism by better understanding how our marketplace works and providing the product that it is rewarding.
There is no group of people who work harder than cattlemen, and those efforts should be rewarded with independence and sustainability.
What excites me is that the solution is not being issued by some powerful wave of innovation and disruption. Rather, it’s simply about capturing the value that you have already created. There are subtle changes that have been occurring just under the surface that promise to transform our industry.
There is no group of people who work harder than cattlemen, and those efforts should be rewarded with independence and sustainability.
The economic drivers are not that difficult to figure out. The market demands quality; it rewards efficiency and growth in pounds. It expects us to raise our product in a way that the consumer can identify with and support. The difference is that the market is asking for objective and verifiable information on genetics and management. The AngusLinkSM Genetic Merit Scorecard® is designed to document the genetic merit of a pen of calves so that buyers can have confidence in what they are buying. AngusLink’s Process Verified Program (PVP) claims provide documentation and validity to certain marketing claims that give producers increased market access and market flexibility.
I am also a natural skeptic. I have always been one of those who say, “Prove it to me. Then I will do it.” In 2019 producers enrolled in AngusLink generated more than $2 million in premiums. In 2020 that went to more than $4 million. In those two years alone, we saw premiums returned to producers total $6,664,291. These numbers were game changers for those who participated.
Documenting and validating the genetic merit of a set of calves through the Genetic Merit Scorecard will always have value. In the foreseeable future, we only see the premiums for cattle enrolled in the Angus Verified, all-natural and Global Animal Partnership (GAP) programs growing. In the future, I could foresee there being other programs that help producers differentiate their product as consumer demands evolve. I’m sure sustainability, animal welfare and environmental concerns will continue to be elevated in the buying decisions of consumers.
The market wants superior genetics and management (nutrition, health and animal handling); they want market access and market flexibility; and they want the opportunity to create additional premiums. The big change is simply in how they want that information communicated. In the past, we only had “reputation” and sincere promises. Today that information needs to verified, documented and presented in an objective manner.
Give us a call or visit us at anguslink.com to discuss how AngusLink can help to put the spotlight on your program and calves.
Editor’s note: Troy Marshall is the director of commercial industry relations for the American Angus Association.
