Barb Downey, Wamego, Kan., was looking for the next step. She had positioned her herd to take advantage of value-based marketing and was searching for a way to make it pay.

"Everyone had been talking about value-based marketing, and we knew it was the key to our future success," Ms. Downey says. "We just didn't know what our next step should be. We kept thinking that to really make money raising cattle you needed to own a packing plant. And that's when U. S. Premium Beef came along."

Ms. Downey and husband, Joe Carpenter, joined the closed cooperative in 1997 and in 1998 she delivered her first 100 head of cattle. This allowed her the opportunity to retain ownership through the feedlot, and through the processing plant.

"It just made sense," says Ms. Downey. "This gave us the advantages as if we owned our own packing plant."

Ms. Downey says that USPB lets producers make the money on the cattle they raise. "There are usually six people trying to make money on one cow-calf pair," she says. "There's the seedstock guy, the commercial producer, stockers, feeders, packers and retailers. In a closed co- operative you eliminate a lot of that. And being involved in USPB means that whether the cycle is profitable for the processing sector or the producer, we benefit because essentially we're both."

Ms. Downey became a USPB member when she purchased shares in the cooperative. There was an initial membership fee and each share cost $55, which entitles the holder to deliver one animal to USPB's processor annually. Cattle are given premiums or discounts based on quality grades, yield grades and weight. Producers receive carcass data on individual animals to help supply the high quality, value-added beef products that USPB provides to consumers.

"Last year we did better on the grid by about $40 per head than if we would have sold direct to the packer," Ms. Downey says. "It's already paid for itself in the first year."

On top of receiving premiums, Ms. Downey figures that she saves $3 per head on trucking costs and $6 to $10 dollars on carcass data. "Those costs are just included in being a USPB member," she says. "You also receive a co-op dividend once a year for owning shares. Last year our dividend was $10.14 per head, of which $4.06 per head was recieved as cash and $6.08 was retained in our company- USPB."

But the cash rewards are only part of the benefit of being a member of the closed cooperative. "The carcass data we receive helps us to improve our genetic base," Ms. Downey says. "Then we're rewarded for improving our end product. USPB is a great way for a producer with a small herd to level the playing field and be a profitable part of a bigger picture."

For more information on leasing or buying USPB shares, contact Tracy Thomas at (816) 891-2300.