Adding Value to Your Calf Crop

Cattle marketer explains the different value-added programs, their pros and cons.

by Heather Smith Thomas

“The easiest way to describe [value-added programs] is like a stair step. To climb up the ladder, you have to climb the steps,” said Superior Livestock Representative Clint Berry. “You can’t go from ground floor to Step 5 without the others.”

The fifth-generation cattleman was featured in a webinar hosted by the Texas and Southwestern Cattle Raisers Association (TSCRA) in April. Emphasizing that what works for one outfit, may not work for others, Berry spoke about value-added programs for domestic and export markets.

Step 1 is the Source-and-Age program, created after discovery of a case of bovine spongiform encephalopathy (BSE) in the United States in 2003 locked U.S. beef out of the Japanese market. Trade eventually opened to beef from cattle verified to be less than 20 months of age. The requirement now is 30 months. Most cattle harvested in the United States are 30 months or younger, so the age requirement is not critical, but the source — the ranch of origin — is critical in a lot of these programs, explained Berry.

IMI Global’s data show that producers are gaining $3.50 per hundredweight (cwt.) on cattle in this program.

Step 2, said Berry, is NHTC, or non-hormone treated cattle (NHTC). If you are enrolling in NHTC, you can’t implant cattle. They also have to be third-party-verified and tagged with electronic identification (eID) tags to be eligible for export.

“NHTC-verified was created so we could send product to the European Union,” he said, calling it an export program. “Just because you don’t implant does not make those cattle NHTC. They have to be third-party-verified.”

The next step, Step 3, is Verified Natural. This is a domestic program created for our domestic supply, Berry said. It’s a classification that means no hormones, no implants, no antibiotics of any kind and no ionophores (Bovatec^®, Rumensin^®, etc.). These products are found in lick tubs, mineral and feed rations.

“If you are buying bag feed from the co-op, you need to read labels,” Berry cautioned. “Verified natural is a never-ever scenario; those cattle can never have any of those additives in their lifetime. It is third-party audited, as well.”

In most cases if cattle are Verified Natural, they are also NHTC, because they aren’t implanted. But sometimes, he said, we see some NHTC cattle that are not Verified Natural because they had an antibiotic or an ionophore in their feed ration, but they weren’t implanted so they are still NHTC-verified.

The next step, said Berry, moves into “social” programs, like Where Food Comes From CARE Certified^® and Global Animal Partnership (GAP) certified. GAP was created by Whole Foods Market. All GAP products target the Whole Foods Market supply chain, which was purchased by Amazon. To market beef through this store, producers must be enrolled in the GAP program.

“Those cattle have to be natural and raised under those standards. They don’t have to be Verified Natural; you can have producer affidavits, but you need to have a GAP audit to verify it. Most of the time, if they are GAP, they are also Verified Natural; and if they are Verified Natural, they are also NHTC; and if they are NHTC, they are also source and aged,” he explained.

Two years ago, IMI Global launched Beef CARE Certified — a program for sustainability.

“This is a domestic program, but the difference between it and GAP is refreshing, in my opinion, because it was created by beef producers to tell our story on how we raise cattle vs. a retailer telling producers how they want us to raise our cattle,” states Berry.

While Berry said he doesn’t think any of the GAP practices are wrong, he views the flexibility of approaching beef husbandry from a science basis as an advantage. Some GAP requirements are not science-based, he said, but rather they are emotional salesmanship.

“That’s fine if someone wants to raise cattle that way and get paid for it,” said Berry, adding: “Yet, if we all implemented some of those strategies, it would have a negative effect on production.”

Beef CARE allows producers to sell cattle that are natural, GAP, NHTC, etc. — or none of those. Beef CARE cattle may have been conventionally fed and could have a few calves on the load that had to be doctored as babies, had an ionophore in their feed ration or were implanted, but they are still Beef CARE cattle because they are following the protocols of that program, which meets the social, environmental and humane handling criteria.

“I applaud that effort, because this is the first time in 25 years of marketing that I’ve seen a program that wasn’t a requirement of non-scientific-based production models,” he said. “In the past, a value-added program often took away a science-based technology (like being able to treat a sick animal), and Beef CARE did not do that. I am excited to see how that program grows in the next few years.”

Berry likened value-added programs to a railroad track: Walk on one side or the other, and you will be fine. Walk down the middle and, sooner or later, you will get run over. The natural route takes away some of the science and technologies that add production efficiency (pounds, feed conversion, etc.), but offer the opportunity to capture premiums for those third-party-evaluated programs. Or, raise conventional cattle, and get all the benefit from implants and antibiotics, when needed, and ionophores for feed efficiency, so you are getting paid for more pounds.

“Look at your production model and what works for you,” Berry advised. “Will you take the easy pounds with implants, or go the other route? Don’t remove science and technology without stepping onto the audited side where you can capture that premium. Walking down the middle, you lose on both ends.”

Editor’s note: Heather Smith Thomas is a freelance writer and cattlewoman from Salmon, Idaho. Lead photo courtesy of the American Angus Association.