Today’s historic lows in beef cow numbers have triggered remarkably high calf prices. Regardless of marketing strategy, calves are earning values that eclipse even last year’s strong market. Yet, the unpleasant truth is that this level of prosperity won’t last. So, what can producers do during the market’s peak to prepare for a trough? One option is to enroll in value-added marketing programs that will provide an edge when markets drop.
Ken and Debbie Bentz of V Dash Cattle Company near Burns, OR, feel prepared for market fluctuations. They have participated in various value-added programs through IMI Global, a division of Where Food Comes From, for more than two decades.
“In this industry, you’ve got to figure out how to get more for your product,” Ken Bentz said. “The old days of there not being very much spread in these cattle is behind us. There is a huge spread now, and cattle that have all the bells and whistles … are going to sell way better.”
Which is why the Bentzes believe in value-added marketing programs. Their Angus-based cow-calf operation earns verification badges for Beef Quality Assurance (BQA), Source and Age, AngusLinkSM, Non-Hormone Treated Cattle (NHTC), Verified Natural Beef, Non-GMO Project and CARE Certified. They’ve seen excellent premiums for their calves, but despite the unprecedented prices, they are also innately aware of increases in the cost of doing business.
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“We are historically at the highest we’ve ever been in the market,” Bentz said. “You’d think that all of us would be rich beyond our wildest dreams, but the other expenses have soaked that up. You cannot stay in the business now and try to sell ‘generic’ cattle.”
Then why don’t more people differentiate their calves through value-added programs? Although preparation for these programs seems onerous, according to Bentz, they can’t afford not to participate. Part of the challenge includes rigorous recordkeeping requirements, but staying consistent with industry standards, like BQA record-keeping guidelines, makes the process relatively simple. Bentz says producers shouldn’t be intimidated to take the first steps.
“We go through the audit every year, which is not particularly difficult. If you are actually a legitimate operator and have any sort of stockmanship skills at all, (the audit) shouldn’t be any problem,” Bentz said.
When the Bentzes decided that value-added marketing was the way of the future and made the connection with IMI Global, account managers like Mindi Birkeland, IMI Global sales and regional manager, helped consult about what programs were an easy fit, and which programs would help their calves bring top dollar with a few small changes to management practices.
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Birkeland says her company, a third-party verification service, receives numerous referrals from marketers like Western Video Market and Superior Livestock Auction, which helps them connect with producers who are interested in earning premiums through value-added marketing programs.
“I work directly with our customers and to begin, we simply talk about their operation—they introduce me to it. Then, we talk about what value-added programs might fit what they are currently doing, and then we talk about additional add-ons they should try as well,” Birkeland said. “Then build a package that fits all of their needs.”
In the initial consultation, producers can expect to share information with IMI Global during a simple conversation. The opening discussions not only help pinpoint programs that make the most sense for the operation, but also reveal additional opportunities to receive a premium. This could be something as simple as disclosing records or making minor adjustments based on a program’s requirements. Birkeland says that most people come in doing 80-90% of program requirements, only needing minor alterations to come into full compliance.
“We have a lot of people right now who want to do Verified Natural, but we soon discover they are using a feed product that has animal fat in it, so they’ll only qualify for NHTC this year,” Birkeland said. “But moving forward, they opt to change their feed product, so their upcoming calf crop won’t be exposed, and they’ll be eligible for Verified Natural next year.”
The standards that are evaluated in many of these programs often overlap, which allows for more marketing avenues at an efficient cost. Calves that guarantee multiple verification programs lead to increased prospective buyers, more bids at auction and enhanced marketability.
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“If you can afford additional programs, and you are marketing your cattle somewhere with buyers interested in program cattle, add what you can,” Birkeland said. “It gives you more marketability and a larger buyer base.”
Animal care programs
Other programs offered through IMI Global, like their CARE Certified standard, move beyond verifying things like feed ingredients and implant records. CARE, for instance, allows producers who have built their operation around conventional best management practices to share their production story through verification, without making changes to the core of their business.
“Our value-added programs are all voluntary. That’s what is so great about them. There are some producers who don’t feel comfortable making changes around implants and antibiotics and that’s fine, and it’s also what makes CARE so unique. CARE isn’t based around NHTC or Natural, so operations can still participate because they think it’s important to communicate to consumers they’re doing things the right way,” Birkeland said. “They realize, ‘I can keep doing what I’m doing, but my story is going to get out there’.”
IMI Global’s CARE Certified program is a suite of sustainability standards that include animal care, which incorporates BQA certification, environmental stewardship and people and community. The program was developed with the end consumer in mind, as a way to communicate what happens on the ranch. By enrolling in these types of value-added programs, producers are indirectly communicating with their final customer—the consumer.
“It’s an opportunity to explain to the consumer that doesn’t understand ag production, what they’re doing and what they’re not doing,” Birkeland said.
For the Bentzes, ensuring that their calves have all the “bells and whistles” not only brings them additional income per animal, but also helps them to understand what buyers are looking for and ultimately what consumers want. They feel that transparency is important and want people to know that they care for their cattle.
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“All the programs bring the consumer and the producer closer together,” Bentz says. “We’d be more than happy to have them show up no matter what we are doing. We care about our cows. That’s the deal. We get to eat them, but only if we properly care for them.”
Regardless of market conditions, maintaining high beef demand is imperative for the industry. Producers play an important role in raising a product that consumers have confidence in. Bentz suggests that by enrolling in value-added programs, they are helping people learn where their meat comes from while remaining profitable through the market’s peaks and valleys.
“We are providing a level of confidence,” Bentz said. “Most importantly, when the market turns, you’d better be lined up to sell these cattle some way other than just hoping somebody shows up and buys them from you. Because when this thing turns, it’s going to go just as far low as it went high. That’s what it always does.”
The Bentzes are confident that they are set up to weather the challenges that market fluctuations may bring. Their participation in value-added programs provides reassurance beyond today’s unprecedented calf prices and brings continued opportunities to increase their buyer base.
“It’s imperative,” Bentz said. “We jokingly say that we do everything in our calves except they are not broke to ride. There’s no way we cannot not do it; we can’t afford not to.”
To learn more about value-added marketing opportunities, connect with IMI Global, a division of Where Food Comes From, at www.imiglobal.com.
