Glendon Spigner and John Huston, both presidents of their county cattlemen’s association in Mississippi, wanted to find a better way to market cattle for themselves and their members. Mr. Spigner, a cow-calf producer in Ita-wamba County, was interested in group marketing, while Mr. Huston, farm manager of Prairie Research Center in Monroe County, wanted to do group marketing with the option to retain ownership.
As their paths kept crossing and they did more talking, they realized that they could make more progress by combining efforts and formed North-East Mississippi Quality Beef.
These producers realize that volume means leverage in the cattle business. If you can offer enough consistent, quality cattle to fill a truck or several trucks, then you have the marketing advantage. But if you don’t have adequate numbers, then you’re at the mercy of those buying the cattle who must then commingle other cattle to fill an order.
Another way of group marketing is through existing programs. For instance, Charlie Hull, a commercial and purebred-cattle producer from Vaiden, Miss., participates in Mississippi State University’s Farm to Feedlot program to gather information on his calves to evaluate breeding programs. George Alley, a producer who also runs cattle, helps the group decipher the closeout data that comes back from the feedyard and how that relates to specific bulls and cows. In addition, their veterinarian, Marty Caldwell, is involved and plays an integral role to help determine if there are health problems and ways to correct those issues.
By pooling together not only the cattle, but also their individual expertise, this group works together to improve the cattle and open doors to other marketing opportunities.
The idea of group marketing and pooling resources seems simple enough, but taking the steps to form the group and getting everyone on the same page takes effort and patience. The following are some steps to consider.
“We started out by first understanding what we had. Then we figured out what it would take to make what we have more valuable,” says Mr. Huston. “We have the raw commodity, calves, then we added value through a health program, backgrounding, commingling and sorting into load lots. We want to capture that added value by marketing directly to the feedyards or retaining ownership.”
Also look at what other programs already exist and how your group might be able to provide cattle for that. For example, many state land-grant universities have farm-to-feedlot-type programs or other group-marketing endeavors.
Find out what value you want to attain
What do you want to accomplish with this group? Do you want to just get enough numbers to fill trucks, or do you want to add value through preconditioning? Or do you want to be more breed specific to fit into some of the breed-specific feeder programs? Or do you just want to get beyond preconceived notions and discounts given to certain cattle that may perform just as well as other cattle?
That was motivation for these Mississippi producers. Besides just having the numbers, they wanted to get beyond the stigma and automatic discounts given to southeastern cattle. Just getting rid of that discount helps improve the bottom line for these producers.
Name a coordinator
You need a driven person to keep everyone motivated, says Mr. Huston. In addition, that person needs to be good at including input from everyone in the group without becoming a dictator. Instead, the coordinator needs to keep the communication lines open and help pass along information from individuals to the group.
Bring a variety of expertise into the mix
For example, include the veterinarian, nutritionist, extension personnel or accountant into the group to help give different perspectives on some issues. Mr. Hull turns to Mr. Alley, who is good at looking and analyzing data, to help wade through feedyard closeout data to help him make breeding decisions.
A veterinarian can give important input on animal-health programs and help investigate what might have gone wrong if the group has a large number of animals requiring medical treatment at the feedyard. Also, look to those who’ve already been successful in developing group-marketing programs.
For instance, Brad White, beef production veterinarian at Mississippi State University, brings expertise from developing value-added, group-marketing programs in other states to help this group of producers improve their cattle and their marketing options.
Establish management criteria, such as vaccinations and weaning guidelines
Much of the legwork on this has already been done with guidelines and training provided through state beef quality assurance (BQA) programs. You can get this information from your state cattlemen’s association or from the BQA Web site at www.bqa.org. These guidelines establish management criteria and some states provide training certification for individuals, or a group. If you live in a state without a BQA program, you can use the national program as a guideline, then work to see about bringing certification to your state.
Look at pooling inputs to receive bulk discounts
Mr. Spigner’s previous work as a hospital coordinator gives him the ability to help the group develop a purchasing program in order to buy larger volumes of pharmaceutical products at a discount. This same principle works like a cooperative where smaller participants pool together to get the volume discounts on items such as medicine, vaccines, hay or supplements.
Be realistic about cost
If your group wants to retain ownership, make sure that everyone understands that retained ownership until slaughter delays cash flow. For some members in a group, this may not be an option, but it can be overcome a number of ways. Some producers can sell off part of the calf crop at weaning, and then retain ownership. Also, some feedyards may be willing to partner with participants on some of those cattle placed on feed. Either way, look at the options and make sure
everyone understands those options.
Learn about your customers
You can’t produce and market cattle without knowing what your customers want. Communication in both directions helps minimize or eliminate many of the problems each group faces, says Dr. White. This can be accomplished by getting as many in the group as possible to take a tour of some feedyards and packing plants to get a better understanding of the entire production-chain process.
In August, Mr. Huston took two van loads of Mississippi producers to tour a backgrounding yard, feedyard and packing plant in Kansas. “That was a great trip, and it really helped drive home some of the concepts we were trying to promote. I’d recommend to any group that they take time to tour feedyards and talk with the managers and pen riders to get their perspectives.”