Market Closeout
Finding the holy grail and joining the revolution.
There is a lot to love in our business, but it isn’t all sunshine and roses. One of the most frustrating areas has always been in the way we market our cattle. I remember nearly 40 years ago when we started talking about the need to base feeder-cattle marketing on objective measures rather than subjective ones. We talked about the need to exchange information up and down the segments so we could both increase value and allocate it from a total systems approach to avoid the convoluted and misguided signals our segmented system often sent. There were millions of dollars invested in pursuit of this holy grail, but to little effect, especially for the cow-calf producer.
The reasons for this failure are widely known. We lacked the technology, the trust, the commitment and the mindset to make it happen. Mainly, we underestimated the time it would take and the paradigm shifts that would have to occur for us to transform our marketing system from a commodity system to one focused on differentiation and value creation.
The reality is that it was always a question of when and not of why or if. It has been a long, circuitous, but inevitable path leading to the transformation of our marketing system through value-based grid pricing, branded-beef programs, and the realization that the way to stop the steady decline in beef demand was through quality.
Ultimately, to remain competitive with the other proteins we had to focus on value creation and away from the singular and segmented focus of commodity marketing. Two of the most significant factors centered around changing our silo mentalities and acquiring the technologies and knowledge that allowed for information exchange. We needed information that was useable, added value to the system and could be exchanged at the speed of commerce.
Ten years ago, we intellectually realized the value of transforming our marketing system; we just hadn’t gotten to the point where we had confidence to execute. Today, that has changed. The overwhelming majority of producers in every segment of our business are committed to the concepts of sharing information to improve efficiency and quality, allowing for increased differentiation and value creation. There is no longer any debate about the need to change or the potential for added revenue as a result. We have finally found the holy grail of marketing the industry had been seeking.
Consensus about the direction we are heading is a big deal, but it is only half of the equation. The second part is driving the revolution that actually sees it implemented on a widespread basis. It is no longer a dream to talk of the day when producers can get paid according to the value they have created through their management and genetics. AngusLinkSM is honored to be at the forefront of this revolution.
AngusLink helps install the genetic merit of calves into the pricing equation of feeder cattle for the first time through the Genetic Merit Scorecard® (GMS). We are also excited to be owned by cattlemen for cattlemen, with the only profit incentive being improving the bottom lines of commercial producers. We are committed to providing additional market access and market flexibility through verification programs, and to moving beyond validation to marketing support, as well.
We can all remember when expected progeny differences (EPDs) and genomics were introduced to the seedstock industry. Today it is hard to imagine a world without genomically enhanced EPDs. In the not-too-distant future, I can foresee us explaining to the younger generation how we actually sold feeder cattle at one time without providing objective and reliable tools to describe their genetic merit.
I can just picture my incredulous grandson as he asks me whether it was true they used to really market cattle based on statements like they use “really good” bulls and they have had all their shots? I’ll just nod and smile and tell him that was before the marketing revolution.
Editor’s note: Troy Marshall is the director of commercial industry relations for the American Angus Association.
Angus Proud
In this Angus Proud series, Editorial Intern Jessica Wesson provides insights into how producers across the country use Angus genetics in their respective environments.
Angus Proud: Scott Sproul
Oklahoma operation learned wisdom of moving calving season to better suit their marketing needs.
Angus Proud: Bubba Crosby
Fall-calving Georgia herd uses quality and co-ops to market calves.
Angus Proud: Jim Moore
Arkansas operation retains ownership through feeding and values carcass data.
Angus Proud: Les Shaw
South Dakota operation manages winter with preparation and bull selection.
Angus Proud: Jeremy Stevens
Nebraska operation is self-sufficient for feedstuffs despite sandy soil.
