Livestock production is becoming extremely competitive, placing even more pressure on traditional cattle operations to improve efficiency and enhance quality. Prospering in such a changing industry will depend on your willingness to implement some non-traditional management and marketing practices.

As beef production becomes increasingly consumer driven, producers must deliver a product that consumers want, rather than a product cattlemen want to produce. Increased demand for branded beef products and precooked beef means that buyers are requiring beef that meets tougher standards for marbling, composition and tenderness.

"Tenderness, marbling and composition cannot all be seen with the naked eye, but they are highly heritable," says Dave Nichols, an Angus seedstock producer from Bridgewater, Iowa. "So when we go to deliver these products-whether it be commodity beef on a grid or to a branded supplier-we will need to have cattle with predictable genetic inputs."

Vertical coordination

To compete long term, producers must build production and marketing systems that will allow them to better coordinate the production of consistent, quality products that consumers want.

"We live in a 50,000-pound load lot society. It doesn't matter if you are talking about calves, cars, grain or boxed beef, we all move 50,000-pound load lots," says Mr. Nichols. "You really need between 350 to 400 cows minimum to sell load lots of the same sex, same size, same outcome kind of cattle. There are not many 350-head cowherds out there. People are going to have to join together."

In the pork industry, it took vertical integration to gain control of pork quality. Now the beef industry faces that same challenge. However, the resources necessary for beef production make it impractical for any one corporation to own the assets necessary to totally integrate beef production. Alliances and other forms of cooperation are means in which to develop some quality control without a single entity owning the animal at every stage of production.

While branded-beef alliances may grab the headlines, they are not the only way to identify higher-value animals and capitalize on that value. Marketing livestock has become increasingly diverse. Thanks to technology, there are more marketing avenues for cattle producers than ever, but you cannot be afraid to cooperate. You must identify customers and produce what they want.

Individual segments of the beef industry like the American-International Charolais Association are recognizing the need to align themselves with the adjoining segments to produce value-added products for specific markets.

"In addition to working with seedstock providers, we are trying to align ourselves with packers, feedyards, and commercial producers to identify markets that add value and then identify the cattle that fit those markets," says Robert Williams, director of breed improvement and marketing for the Charolais Association.

The Charolais Association is coordinating programs to bring cattle feeding companies and seedstock producers together to offer marketing avenues for commercial bull customers. One such program, being developed with AzTx Cattle Co. based in Hereford, Texas, will allow seedstock producers that do not have the means to offer buy-back programs or genetic-source sales to offer a marketing program to their bull customers.

"The seedstock producer acts as the alliance or hub. He can go to the feeder and say 'I sell 20 or 50 bulls a year. I have contacted my customers and let them know that here is a marketing avenue where they can sell their calves, receive performance and carcass information back, and even receive premiums on those calves if they perform well,'" says Mr. Williams. "This particular program will provide several opportunities even for smaller producers."

Auction services

With the growth of alternative marketing avenues, today's auction-market operator must do more than just run cattle through the ring and collect a commission. Auction centers really work to provide customers more marketing options. For example, many auction markets coordinate special preconditioned calf sales and genetic emphasis sales.

Coordinated programs like value-added sales have goals similar to any alliance-identify higher-value animals and reward those who are willing to produce higher-quality animals. Coordinated sales such as these also provide the advantage of price discovery from multiple buyers.

Know what you produce

As important as marketing is, it just can't happen overnight.

"The commercial producer must figure out a way to measure what he actually has," says Mr. Nichols. "He is going to have to get carcass data, performance data and feed conversion data on his cattle so that he can walk in and say to a potential buyer 'This is how my cattle gain, yield, and taste.'"

Many partnerships that are being developed are aligning themselves with others to take advantage of new technologies to enhance performance and improve quality. Collecting data and using that information to make genetic selections holds the biggest challenge. But it also presents the greatest opportunity.

Data on an average set of calves in the feedyard shows that as few as 25 percent of the calves are responsible for up to 70 percent or more of the lost dollars in each pen. The key to improving profitability is to identify those poor doers and eliminate them.

John Josserand, Chuck Fries and others at AzTx Cattle Company are developing a program to compile and package complete performance and carcass data for customers so they can identify the parents of those calves that are falling short of production goals.

"Many producers don't utilize an ID system that is usable in linking data back to the breeding herd after the cattle leave the ranch. They have not been paid to do so," says Mr. Fries. "But once a beef producer can see the spread in value between the best and worst animals, they want to know where the bottom 25 percent are coming from. To nail down the poor genetics, you really need a system of identification linking the calf to the cow and the bull."

Earlier indicators

Identifying what is being produced on an individual animal basis while increasing producer profits in the feedyard is the first goal of the AzTx program. "We can make the producer money just by managing the cattle individually in the feedlot. But we can make them a lot more money, both in the feedyard and at the ranch, if we start the process sooner in the production cycle."

Unfortunately, it takes a couple of years from the time a female is bred to the time feedyard performance and carcass information is available on her progeny. By that time she probably has been re-bred twice.

"The time between calving and when you can generate usable information to make a change is long, but you have to start somewhere," says Mr. Fries. "Another benefit of generating individual animal growth curves is establishing additional culling criteria as early as weaning. Ideally, we can assist the beef producer in finding a percentage of those poor doers before they ever leave the ranch."

If you learn that calves from specific cows and breeding herds don't perform on the ranch or during the grazing period, chances are they'll not perform well in the feedyard. But only by compiling individual production data can those correlations be drawn. Cattle owned by participating customers are measured for performance as many as seven times during the production process including birth, branding, weaning, pasture, arrival at the feedyard, at re-implant time, and finally hot carcass weight.

"We don't have all the answers to what the correlations are yet," says Mr. Fries, "but you can't get them if you don't generate the paper trail."

If the bottom 25 percent of your calves do represent 70 percent of the red ink, and you can identify and remove even half of those at the ranch, you can save money.

Why would a feeding company go to all the trouble for cow-calf producers? "We want to develop long-term, mutually beneficial relationships with beef producers that will help both of us access new markets for their product and continually improve the bottom line," says Mr. Fries.