Marketing Opportunities Abound Through Breed Associations
Whether it’s third-party verification, registered hybrid genetics or branded beef programs, breed associations are offering commercial producers numerous opportunities to meet consumer demand for information, improve hybrid vigor and increase profit potential.
Elliott Dennis, Ph.D., University of Nebraska-Lincoln assistant professor of livestock marketing, says recent survey work suggests that two out of every three consumers believe it is very or somewhat important to understand how their food is produced. This desire for information, coupled with a growing demand for consistently high-quality beef and expanding export markets with strict eligibility requirements, means cattle feeders and packers are often willing to pay a premium for cattle that have specific genetics and/or verified health protocols.
“A commodity price is offered to producers who sell commodity calves – those without any information on health, genetics and/or management background verifications,” Dennis says. “Value-added calves that have been certified often garner a premium above commodity cattle price.”
Those premiums can be significant. Dennis says the four most tracked and reported value-added programs for fed cattle are Certified Angus Beef (CAB), Natural, Non-Hormone Treated Cattle (NHTC) and Age-Source Verified. Premiums for these programs differ, but on an average month-to-month basis since 2017, carcasses that grade CAB, NHTC or Natural return premiums of $3.80 per hundredweight, $19.80 per hundredweight and $30.80 per hundredweight, respectively. Dennis adds that premiums for feeder cattle are less available and often only publicly reported by video auction markets.
With premium opportunities on the table, breed associations are getting creative to help commercial cattlemen build value in their cattle. Below are examples of a few value-added marketing opportunities associations offer.
Ear Tag Programs
The Feeder Calf Certification Program (FCCP), offered by the Red Angus Association of America (RAAA), is a genetic, source and age program that allows producers to enroll calves with at least 50 percent Red Angus breed influence.
According to the RAAA website, data from Superior Livestock Auction (and analyzed by Kansas State University) suggests that from 2013 to 2018, producers who used the FCCP tag earned an average premium of $2.98 per hundredweight in comparison to producers selling Red Angus-sired calves without the yellow tag. On calves averaging 600 pounds, that is nearly $18 per head and $1,430 per pot load.
Similarly, CharAdvantage, available through the American International Charolais Association (AICA), is an age, source and genetic certification program designed to add more value to Charolais-influenced feeder cattle. A group of eligible calves must be 75 percent sired by registered Charolais bulls that are transferred to the owner’s name.
Colt Keffer, AICA director of industry relations and sales, says participants can add value for buyers seeking feeder cattle with a known background that can qualify for added marketing opportunities and programs like third-party verified health protocols such as NHTC or Verified Natural Beef (VNB).
“When we talk about NHTC or Natural cattle, obviously you can’t implant them so you’re losing a little bit of gain,” Keffer says. “You get added pay weight with the heterosis that comes from using a Continental bull on your British cows, and participating in the CharAdvantage program helps producers build additional value in their cattle.
“I’ve talked with several producers who meet all the requirements for some of these programs but they’re not getting third-party verified, so they’re really missing out on some potential premiums,” he adds.
The American Gelbvieh Association (AGA) developed Balancer hybrid seedstock to offer producers a simple way to maintain heterosis and a blend of British and Continental genetics without a complicated crossbreeding system. Balancer cattle are 25 to 75 percent Gelbvieh with the balance being Angus or Red Angus.
Tom Strahm, AGA commercial marketing director, says Balancer cattle combine growth, muscle and increased retail product yield with the carcass qualities of Angus.
“As a Continental breed, Gelbvieh cattle have excellent post-weaning growth and are often very feed efficient,” Strahm says. “When you add in the marbling ability of the Angus breed, you really get the total package with the Balancer.
“Especially for those producers in a Natural or NHTC program, the Balancer provides a little better advantage in average daily gain and hitting those targets on the grid.”
Strahm says Balancer cattle often have excellent hot carcass weight yields at 64 percent or better, and many of the black-hided Balancers qualify for Angus beef programs at the packer.
The composite seedstock breed also provides several maternal benefits to commercial cow herds.
“Balancer cows offer maternal superiority through increased longevity, excellent fertility and increased milking ability,” Strahm says. “Data out of the U.S. Meat Animal Research Center suggests that Gelbvieh and Gelbvieh-influenced cows produce a high percentage of calves weaned per cow exposed, and that’s a profit-maker for commercial cattlemen.”
Certified Angus Beef (CAB) was created in 1978 to build demand for Angus beef. Eligible cattle must have a predominantly black hide and meet 10 carcass specifications in the packing plant. According to the CAB website, producers earn more than $92 million in grid premiums each year with cattle that qualify for the program.
Likewise, the American Hereford Association (AHA) established Certified Hereford Beef (CHB) as a value-added marketing program in 1995 to promote a consistent product size and eating experience specific to the breed. Hereford-influenced cattle, including red and black baldies, accepted into the CHB program must meet 10 science-based specifications, including Minimum USDA Small00 (Choice) or Modest00 (Premium) marbling score; “A” maturity only; medium- to fine-texture marbling; 10- to 16-inch ribeye area; moderately thick or thicker muscling; less than one inch fat thickness; a hot carcass weight of 1,050 pounds or less; no dark cutters; no capillary rupture; and a neck hump not exceeding two inches in height.
In 2017, AHA created the CHB Premium program that includes beef graded upper two-thirds USDA Choice or higher. Trey Befort, AHA director of commercial programs, says that because of the growth in demand for the CHB Premium product, carcass grid premiums have become available through packer partner National Beef Packing Co.
“Over the last few years there’s been continued growth in the CHB Premium program and in premium opportunities through National Beef grids as a whole,” Befort says. “In the past 10 years, we’ve seen significant improvement in marbling and carcass weight within the Hereford breed, and the CHB program is an opportunity for Hereford producers to capitalize on that increased carcass merit.”
Befort says National Beef annually markets nearly 30 million pounds of CHB nationwide to a combination of retail and foodservice outlets.
“We’ve got a really widespread distribution and continue to build our network of partners,” he says. “People are looking for something unique with a good story, and the Hereford breed has a lot of history in addition to great tasting beef.”
Marketing Programs Aplenty
Commercial producers across the country are taking advantage of breed association programs to meet consumer demand for information, improve hybrid vigor and increase profit potential. Visit these association websites to learn more about the programs highlighted below as well as other opportunities to market your cattle.
American Angus Association
Certified Angus Beef®
American Gelbvieh Association
American Hereford Association
Premium Red Baldy
Certified Hereford Beef®
American International Charolais Association
American Maine-Anjou Association
American Simmental Association
Feeder Profit Calculator
International Brangus Breeders Association
North American Limousin Foundation
Red Angus Association of America
Feeder Calf Certification Program
Premium Red Baldy
Santa Gertrudis Breeders International
Written by: Macey Mueller, Contributing Writer
Source: Nebraska Cattlemen September 2021 Magazine