In today’s rapidly evolving beef industry, niche marketing offers a variety of opportunities for producers. Access to those markets and their premium prices, however, does not come easily. Just ask Jack McCaffery, owner and manager of North Platte Feeders, a 43,000-head commercial feeding operation near North Platte, Neb.
Although North Platte still trades most cattle on the traditional cash market, Mr. McCaffery and his staff are working to develop their own niche — serving producers who want to feed cattle for specialty markets.
North Platte is one of Certified Angus Beef’s licensed feedlot partners and was named CAB Feedlot Partner of the Year in 2003 in the large-feedlot category. The operation also markets cattle through Certified Hereford Beef and a number of other brands, including several natural-beef programs. North Platte was one of the first feedyards to market cattle through CAB’s natural-beef program.
“Demand for natural beef is really exploding,” says North Platte business-development specialist Turk Stovall. “We started feeding cattle several years ago for Coleman Natural Beef, which now is part of BC Natural Meats. Since then, we have been working to help build supply chains, linking producers who have the right kinds of cattle and management practices, with branded programs that offer premiums.”
This effort involves a number of challenges, Mr. Stovall says. One is trying to source the right kind of cattle. This requires building relationships with progressive producers, learning about their cattle and their management practices, then matching them to appropriate programs. The next step is to supply producers with data. Depending on customer needs, North Platte can provide data services ranging from grade-and-yield averages on a pen, right up to detailed carcass reports on individual cattle linked to electronic identification tags. The feedyard has full EID capabilities and ultrasound technology.
Another challenge is to maintain integrity in the management of cattle targeted for specific markets. North Platte feeds cattle for conventional markets, and therefore uses implants, treats for sickness as needed and maintains appropriate records for the use of animal-health products. Cattle designated for natural programs, however, receive no implants, and any cattle pulled for treatment with antibiotics must be individually identified and excluded from the program.
This leads to what Mr. Stovall says is one of the biggest challenges —keeping up with the paperwork. Most niche or branded-beef programs require some level of source and process verification, including records from the ranch of origin, and Mr. McCaffery says the operation is working toward obtaining source verification on all the cattle that come into the feedyard. Age verification is increasingly important, especially for the export market. Natural programs typically require affidavits certifying production practices that adhere to program standards at every stage of production.
Feeding cattle for natural-beef programs adds about 10 cents per pound to the cost of gain, Mr. McCaffery says. Then there is the extra labor for the clerical staff in maintaining records, and for the cowboy crews who must identify and segregate treated cattle that no longer qualify for the program. Mr. McCaffery believes investing time and effort into developing specialty markets will pay in the long run by providing opportunities for customers. Higher production costs, however, mean branded programs must offer adequate price premiums.
In most cases, the pens of cattle North Platte feeds for natural or other specialty markets are from individual ranchers feeding on a retained-ownership basis. The feedyard staff, Mr. McCaffery says, works closely with customers to assure they have the necessary documents and keep appropriate records on their calves to assure compliance with the various programs. “We help producers to find the programs that fit best, whether they are breed-specific, natural, etc.,” Mr. Stovall says. He adds that most customers do not need to make big changes in genetics or production practices to qualify for these programs; they just need better documentation. “Our ultimate goal is to create all the marketing options we can for progressive producers.”