Cattle Marketing: Past, Present and Future

Describing a past of commodity beef production that was priced on the average, Dillon Feuz, University of Nebraska economist told the Beef Improvement Federation (BIF) Producer Applications Committee in Omaha July 12 that times are changing.

The present is marked by great conflict between those of the old school commodity orientation and those looking toward the value-based future, Feuz said. Because of its focus on consumer demand, the value-based model with its branded products holds out the brightest hope, he said. But cattle will be differentiated based on production systems and product attributes such as tenderness and marbling, more than average daily gain and weaning weight, Feuz added. 

Still, there are serious obstacles and problems to be solved, he said. The branded future looks more toward contract pricing, but it may not be feasible to continue to base those contracts on the spot cash market for finished cattle—which are, increasingly, the commodity cattle noted as typical of the past.

Noting that National Cattlemen’s Beef Association (NCBA) economist Chuck Lambert will publish a “Base Price Alternatives” paper this summer, Feuz said the industry must not rely strictly on the spot fed-cattle market in the future, where information will increasingly hold the key to success. He concluded by saying there is demand for most types of beef product if it is target marketed.

Other speakers at the BIF Producer Applications Committee session included:

-- Nebraska commercial Angus rancher Mike Kelly detailed his experiences in pilot-testing the NCBA Standardized Performance Analysis (SPA) production and financial accounting programs. 

-- South Dakota rancher Mike Levi told how he used feedlot and carcass data in conjunction with ultrasound and electronic identification and frame score measurements on the ranch to fine-tune his herd. The high-tech processing allowed 560 calves to be worked, shots to be recorded and calves to be sorted three ways in six hours last fall. 

-- Iowa State Extension beef specialists Bud Beedle and Darrell Busby provided an overview of the 20-year-old Tri-County Steer Carcass Futurity, which started with 106 steers from 35 consignors and grew to eclipse 6,000 steers and more than 200 consignors this year. Time has shown clearly the need for weaning more than 30 days and use of modified live vaccine for bovine respiratory disease prior to placement on feed. The most obvious improvement in the herds of long-term participants have been greater uniformity in all areas of performance and carcass quality.
— by Steve Suther