Category: Costs

The 6Ps of Cattle Marketing

by  | Aug 15, 2015 | Brubaker Blog |

Product – Price – Place – Promotion – Possession – Planning

By Ken Brubaker, Brubaker Sales & Marketing, All Rights Reserved

Everyone measures their success in the Cattle Industry differently. Those goals may have many different meanings from producing and showing a National Champion to having a successful production sale or just having a productive sustainable breeding program. The Cattle Industry is one of the most diverse industries in our country, with many breeds, philosophies and kinds of cattle being produced. The great thing about that diversity is there seems to be a buyer for everything of quality within those different kinds. Our industry is very similar to the automobile or fashion industries. Over the years our industry has gone through many changes and usually those changes have translated into income. Right or wrong change equals an increase in income. When you have something that nobody else has they will want it.
Successful programs spend as much time developing and maintaining a marketing program as they do their breeding program. Regardless, if your program’s end product is feeder cattle or seedstock understanding and utilizing the basic principles of marketing give you an advantage and a much greater chance for success.

There are two truths that you will deal with in your marketing program. “Perception is Reality” and “You can have the best cattle in the world, but if nobody knows about them, how can you sell them”. Marketing is more than advertising, as you will see further in this article, advertising is only part of your entire Marketing Program.

Your Customer – Target Market

Before we get into the specifics of the Six P’s an understanding of your customer or “Target” audience is essential. As we already discussed the Cattle Industry is very diverse. Therefore, marketing to the entire industry is a waste of time, money and resources. It is critical to identify who your market is and get as specific as possible to reach that market. Some programs only sell bulls while others only sell females and some programs sell both. That along with identifying what type of breeder will buy your cattle based on pedigree, kind and philosophy allows you to be more efficient with your budgeted dollars and ultimately the results.

Identifying your customer is essential as the first step to guide you in all facets of your Marketing Program. While its true that you never know where your next customer will come from, it is important to understand demographically where your base will come from. Where, who, what are all part of identifying your base. If you are selling bulls to commercial producers, sell the benefits of those bulls and promote the sale to that audience.

Planning – The First P

The saying, “if you don’t plan – you plan to fail” is particularly true when it comes to developing a successful breeding program and marketing program. Planning is an essential part of your success.
Planning your advertising and marketing effort to dovetail with your breeding and calving seasons is important, so that your product is what it needs to be – when the buyers will buy it. If you are planning a bull sale and you calve in April-May you would not want to schedule your sale for January when the bulls are less than a year old. You will compromise their fertility, performance and data with underage bulls. Schedule your sale after the bulls reach a year of age or perhaps even sell them in the Fall as long-yearlings.

Measurements are important to most buyers, both, commercial and purebred producers. Planning your sales effort with your ability to acquire and record that data is important to give potential buyers the information they require to make buying decisions. Planning your breeding program so that you can acquire necessary data in time for your sale is important.

Product – What Are You Selling – Getting Your Piece Of The Pie

The most successful programs that I have observed are those that have a clear vision of what their product is. They have a mission or goal of the type and kind of cattle they wish to produce and a solid philosophy regarding management of those genetics.

It is important to differentiate your brand or product to buyers so they can relate to the genetics you provide them. While thousands of people breed, grow and sell Angus Cattle – not all programs are the same and not all genetics are the same. Product differentiation allows your buyers to zero in on the attributes and benefits of your genetics. In the grand scheme of things the cattle industry is a big pie and you want to get your share of that pie (market share). This is a tool used by other products and industries.

Look at how the soft drink industry has differentiated their products to gain market share. Coke is not just Coke anymore it is – Diet Coke, Cherry Coke, Coke Zero, Caffeine Free Coke and on and on and on. Regardless if you buy a Coke or a Coke Zero you are buying a Coke rather than a competitor’s product – increasing your market share of the soft drink market.

Identify your product to your customers and potential customers and promote the attributes and benefits of your gene pool. Production and performance will be a part of identifying your product – SO KEEP RECORDS ! Production information such as progeny ratios, calving intervals, daughters production are all important if you have identified your product as one that excels in maternal traits – so not only take down the information but submit it to the breed association so it is well documented. If you are selling bulls, birth weights, weaning weights, yearlings etc etc are all critical to give your buyers the information they want to make a buying decision.

Price – Getting Every Dollar They Are Worth

We all want to sell our cattle for as much as we possibly can. I am amazed how many times I go into a program and they expect top dollar for their cattle – but they don’t take care of the basics to create value and increase the value of the cattle they have for sale.

As mentioned above under PRODUCT, the money is in the details. Well documented production and performance information adds significant value to your product and increases price. Sure, some buyers are only interested in phenotype but most in today’s industry want to utilize the tools in the toolbox to make a decision, particularly since prices are at all time highs in all segments of the industry.

In addition to record keeping management also adds value. Nutrition, stock development and herd maintenance all play key roles in adding value. Over fed or under fed cattle will not command the highest value. Providing adequate nutrition to all the cattle to express their genetic potential at optimum levels gives you the greatest chance to add value to your product. The best pedigree and the best cattle “on paper” will not bring the best dollar if you don’t pay attention to the details of records and management to add value to your product.

Place – Where Do You Sell Your Cattle

If you are selling privately off the farm or ranch then you need to make it easy for buyers to find you and provide directions to them. Same is true if you are having an auction but you may have choices. An auction at the farm requires more facilities and more work to have that sale regardless if it’s a pen sale, video sale or traditional auction with cattle coming through a sale ring. You may find it easier to utilize a stockyards, fairgrounds or even a neighbor that raises another breed of cattle that would allow you to rent their facility.

All of these options have value depending on your circumstances and where you are located. The primary focus here is to conduct your sale at a location that is easy for buyers to find and participate.
More and more today we are holding video auctions where the cattle do not walk through a sale ring. These sales can be held anywhere. They can be held on the ranch or at a hotel that is in the nearest town. They could be held miles away if that is most convenient to the buyers to attend.

Possession – You Don’t Have A Sale Until The Buyer Takes Possession

This part of the Marketing Mix may sound self-explanatory, however, this is a key part of the mix. You conduct a sale and the buyer shows up pays for his purchases and loads the cattle and takes them home – you are done right ? No ! If he purchased purebred cattle then the possession of what he purchased is not done until you transfer the registration papers.

Many of the cattle we sell today are sold to absentee buyers – they are not present at the sale. Shipping costs today are higher than ever before with fuel prices what they are. It is a critical component of the sale to provide your buyers with service to arrange trucking

Promotion – It’s More Than Just Placing An Ad Somewhere

A successful Marketing Plan begins with a budget to keep you on track. This is always our starting point as it guides us through the process of keeping costs in line while placing a priority on media that reaches your target market. Our 20 plus years of experience in the advertising industry has given us insight to these different forms of promotion as there are advantages and disadvantages to all of them.
It is well documented that the most successful Marketing Plans utilize a mix in the kind of promotion used to reach the target audience. Technology has driven many changes in that mix over recent years, particularly since more consumers have access to high speed internet. Finding the mix that best reaches your target market has some trial and error to it. Talk to your customers and ask them what they read and how they get their information.

Print Advertising

Print advertising includes magazines and newspapers that cover both regional and local audiences as well as national. A mix of all of these types of print advertising should be utilized as long as they make sense and reach your target market. Our budget will be limited therefore we try to utilize publications that give us the greatest “bang for the buck”. Dare to be different in your ads to capture attention. Your ads need to stand out and capture the reader’s attention.

Broadcast Advertising

Radio and TV provide opportunities throughout many parts of the country and deliver a low cost/thousand audience. Broadcast advertising puts immediacy to your message. Prepare yourself for some sticker shock with some of this media but our research has shown that it can deliver new customers to the established program and bring an industry to a new program.

Electronic Advertising

Electronic media in the form of the internet and E-Mail have exploded over recent years. This is largely due to the ease at which you can create content and copy but more importantly the low cost.
Website – for as little as $500.00 you can direct your customers and potential customers to an electronic brochure that gives them information about your program. Websites should be simple and easy to navigate through. You can give customers a tour of your ranch and cattle program while they sit in their living room. You can offer cattle for sale and promote your production sale very inexpensively particularly when you promote it through an E-Blast program as we have at BSM.

E-Mail Blasts

This service has exploded in recent years with many firms offering the service. Be careful through – just as in a “snail mail” mailing list it as only as good as the database. The database needs to be constantly added and deleting bad addresses that waste your effort – however the cost to do this is very cheap and can add further traffic to your website and more interest in your upcoming sale.

Direct Mail Advertising

Traditional direct mail, brochures, sale books or newsletters are still very affective tools. Not all producers use the internet (or do not use it regularly) and will not get your E-Mail or view your website.

Attractive brochures and newsletters grab attention and can tell your story. Many producers will keep your brochure to refer back to when they are ready to buy.

Brochures, newsletters and post cards can be expensive to produce however they are still cheaper to mail than a sale book. We have found it a good strategy to send out the direct mail first and ask for a sale book request – rather than mail thousands of sale books that can run as high as $3.00/each with postage.

Personal Selling

Nothing takes the place of personal selling. While you may hire a firm like Brubaker Sales to do a lot of the for you – many customers still want to talk to you and get to know you before doing business.

Attend events locally, regionally and nationally and give others an opportunity to get to know you – I’m sure you are a likable person and this will allow a selling connection – even if you never try to sell them anything. Get involved with breed associations and cattleman’s associations to build relationships with other producers that can become your customer.

Outdoor Advertising

You may be amazed how important a sign at the end of your lane or along the highway can be to your marketing program. Not everyone has a location suitable to a billboard on the interstate but if you are this can be a great way to promote beef to consumers and promote your program.

Customer Service

I’ve included Customer Service as part of promotion simply because that is exactly what it is. Good customer service becomes good promotion and bad customer service becomes bad promotion. In our industry we deal with mother nature and things don’t always turn out the way we want – we can limit the negativity by working with a customer to repair the problem. The programs that take care of their customers keep their customers and those that don’t loose them. Be fair and responsible to your customers and they will return to do business with you for many years.

7 Steps to Creating a Successful Ranch Management Plan

7 Steps to Creating a Successful Ranch Management Plan

By Hugh Aljoe
Director of Producer Relations

Posted Jan. 1, 2020

What is intentional management? It might be easier to describe what it is not than to describe what it is. In an attempt at “tongue-in-cheek” humor, let me describe what intentional management is not.

You might not be managing intentionally if:

  • Your record-keeping system is a shoe box or a file folder in which you keep receipts until tax time.
  • Your marketing plan is to sell the largest calves each time you pen the herd, weaning the calves en route to the sale barn.
  • Your winter feeding program is to provide cubes a couple of times a week to the herd without knowing the quality of the hay or standing forage on offer.
  • Your stocking rate was set by what the neighbor, your granddad or your real estate agent suggested, and you don’t adjust it until drought forces you to.
  • You don’t routinely test and analyze your pasture soils, yet you routinely apply fertilizer.

I’m sure you can think of other s of how we as producers too often go about “running” cattle with little forethought and planning. In favorable years, we can get by easily enough, but in unfavorable years (due to weather, markets or other issues), difficulties arise. These unanticipated surprises can be costly and often difficult to overcome. Hopefully, most of us learn from our mistakes and failures and, if we survive, can laugh at them in hindsight. The secret is to fail early, fail often, but fail cheaply — and adapt our management so that we do not repeat our mistakes.

MANAGE WITH INTENT

Intentional management is the active management of the collective components of an operation toward the achievement of realistic, well-defined goals. It is a holistic and forward-focused management approach in which an operational management plan is created and used as a template to plan and prioritize activities then to monitor and measure progress toward defined production and economic objectives. Management plans need to be built to complement the resources of the operation — the land, facilities, personnel and production system(s) being operated. Even though there is always some uncertainty within an agricultural operation, with a management plan in place, a producer has a road map to guide him or her toward a predetermined outcome. When variations in climate or markets or other surprises occur and force a change of course, having the plan in place helps guide a producer to either continue to navigate toward the original outcome or alter the course toward a new, more realistic or attainable goal, given the circumstances.

PLANNING BRINGS CLARITY OF PURPOSE

For intentional management to be more than a concept, it takes forethought, planning and action. The biggest challenge for most producers is getting started. It is much too easy to get caught up in the day-to-day activities of running a cattle ranch or agricultural operation. It is in the intentionality of developing a management plan where clarity of purpose is achieved. This is where a manager establishes a vision of a desired future for the ranch, identifies the key management objectives to be accomplished, devises an action plan that addresses the critical aspects of each management component, and integrates these components into the management plan for the ranch that the entire staff will implement.

The management plan for the current year becomes the template for the following year, with continual fine-tuning and adjustments over time while adapting to the changing industry, market conditions and climate variations that will occur. Through intentional management and use of a management plan, managers are more likely to attain their desired goals, will experience fewer surprises, and are better prepared for the unexpected when it occurs. Then, instead of just laughing at mistakes of the past, we can laugh ourselves all the way to the bank.

Cattle in pasture

7 STEPS OF INTENTIONAL MANAGEMENT

1. MANAGEMENT PLAN

First is the management plan itself, which is the compilation and integration of the other six components.

2. PASTURE MANAGEMENT

Second is the pasture management plan, which includes the soils, forages and water resources. The management plan is grounded by the pasture management plan, which forms the foundation upon which the other components rest. The pasture management plan is the first component to address in intentional management.

3. STOCKING RATE MANAGEMENT

Third is the stocking rate management plan, which entails the matching of grazing livestock numbers to forage production as well as managing and adapting livestock numbers as forage production changes within and throughout years.

4. CATTLE MANAGEMENT

Fourth is the cattle management plan. The cattle management plan includes the breeding, nutrition, health and husbandry aspects of a cattle program, which ideally complements the land resources of the operation.

5. MARKETING PLAN

Fifth is the marketing plan, which leverages the attributes of the cattle and management for optimum economic results. Typically, this means managing the ranch resources so there is an element of flexibility within the stocking rate for retained ownership of calves or other stocker cattle enterprises as well as timing sales with favorable cattle markets and market cycles.

6. RECORD-KEEPING SYSTEM

The sixth component is a good record-keeping system for ranch operations. This is a record-keeping system that allows easy tracking and monitoring of critical production and economic information. It also provides managers the ability to conduct enterprise analyses, prepare financial statements, and develop monthly and annual operational reports.

7. PERSONNEL MANAGEMENT PLAN

Seventh is a personnel management plan, which allows a manager to intentionally develop the skills and knowledge of ranch staff to build competencies and enhance their value to the operation. A personnel management plan addresses the needs of the operation, from onboarding a new employee to rewarding valued and tenured employees. It also includes performance evaluations, goal-setting sessions, training and professional improvement.

Beef’s greatest talent is protein upcycling

By Lacey Newlin Jan 7, 2020

“There are some really highly educated people out there who are actively against the beef industry,” said Tryon Wickersham, associate professor of animal nutrition at Texas A&M University. “I don’t think there is going to be anything we can do to change that. I think they will be against everything we do, no matter how we do it, but that doesn’t mean we shouldn’t mount a defense or stop educating the consumers about the value we bring to their plates.”

Wickersham spoke recently at the Oklahoma State University Beef Conference in Stillwater, Oklahoma, in a presentation called “Beef’s job title.” He says beef’s job title is to be a protein upcycler, which means to improve the value of protein.

Beef’s greatest talent is protein upcycling

 

 

 

 

Tryon Wickersham, associate professor of animal nutrition at Texas A&M University, spoke recently at the Oklahoma State University Beef Conference about beef’s job title of protein upcycler. (Journal photo by Lacey Newlin.)

Wickersham says, on average, it takes 770 pounds of corn to get a beef animal ready for slaughter. Corn is the primary source of human edible protein, or HEP, we feed and the main competition for food sources between cattle and humans. HEP does not necessarily mean tasty protein, but it is protein a person could consume. For example, grass is a source of non-HEP. Soybean meal, though we would not want to consume it, is a great source of HEP. Some people challenge agriculture for raising corn-fed cattle and believe we should be feeding all that corn to humans.

“If we didn’t feed corn to cattle, we wouldn’t compete with humans for that much food,” he said. “To justify corn-fed beef, we have to be able to say it is a better use of corn to feed it to cattle instead of children.”

He says children are used in his model because they have high amino acid requirements and they grow rapidly. The 770 pounds of corn we normally feed to one beef animal would meet the indispensable amino acid requirements of three children, according to Wickersham. Indispensable amino acids must be consumed in a diet to meet your protein requirements. If a child does not consume them, growth will be stunted.

“We don’t think a lot about stunting in the United States, but it’s a real problem in the world,” Wickersham said. “The world is not deficient in calories, it’s deficient in protein and other micro-nutrients and beef happens to be a really good source of those things. If you want to be a vegetarian in the United States you can, and you can meet your requirements and not be deficient, but not everyone is in the United States.”

Wickersham says corn is also high in calories, so those children would have to consume a lot more calories to meet their amino acid needs. In fact, it would be essentially impossible for a child to eat enough corn to meet their requirements.

On the other hand, if we feed the corn to cattle, through the value of protein upcycling we could feed 17 children and easily meet their protein requirements by feeding that one beef animal the 770 pounds of corn. Furthermore, ruminants can utilize sources of biomass that other meat-producing animals, such as fish, pigs and chickens, cannot.

“We’re really dependent on ruminal microbes to convert low-quality sources of protein into a more valuable source of indispensable amino acids,” Wickersham said. “Our animals can eat things that those other animals can’t and convert them into steak.”

Balancing the pillars of sustainability

Another method Wickersham uses to measure protein upcycling is net protein contribution or NPC. It estimates how a production system is contributing to meeting human protein requirements. Wickersham says this metric does allow us to address social sustainability. Sustainability is built on three pillars: social, environmental and economic sustainability. Wickersham says producers cannot pick just one pillar to focus on, they must balance them all.

“The beef industry does a really good job of addressing economic sustainability because everyone wants to stay in business,” he said. “We think about environmental sustainability indirectly as a result of improving economics. However, we rarely think about social sustainability of beef cattle production.”

According to Wickersham, methane production and HEP consumption are inversely related. The more HEP we feed cattle, generally methane production goes down. Conversely, if we feed them less HEP, methane goes up.

“We want them to balance each other,” Wickersham said. “We don’t want to go too far down on NPC. We want to have something counter balancing and pushing against NPC, so we are making the best decisions for the environment too.”

Another important figure is protein quality ratio or PQR, which determines if we are improving the protein quality of the product produced. As an example, the input PQR of corn is 36.8 and the output of beef is 112, by the end of the process, the beef animal has improved the protein quality three-fold. Wickersham says corn is about as bad as you can get when it comes to HEP and PQR and beef is at the best. Beef is a fixed biology; we cannot change the amino acid profile for the output. We can, however, change the input.

“We want the protein produced to be better than the protein we fed,” Wickersham explained.

Wickersham says we can determine if beef is competing with humans for HEP if we multiply HEP by PQR which will equal the NPC. If it is one or above, it is contributing to the human protein supply. Beef is usually around three, but at times it rises or falls, depending on phases of the beef cycle.

Wickersham says beef has a really great story to tell, but most of the time we fail to tell that story very well. He says NPC is a useful tool for defining the value of beef production systems.

“It gives us social sustainability and allows us to tell a compelling story that beef cattle are producing improved-value protein,” Wickersham said. “It also gives us an environmental sustainability and efficiency of nutrient utilization and provides us a way of capturing the benefit of having cows grazing our pasture. That brings value to humans. We are taking that grass that we have no way to utilize and turning it into steak.”

Lacey Newlin can be reached at 580-748-1892 or lnewlin@hpj.com.

$1000 plus Cow Costs –

Where are Your Costs?

Here is a PDF of the

Estimated Cow Costs for the Nebraska area for 2019.

Where are you at.

Screen Shot 2020-01-03 at 9.24.07 AMDifferences Between High-, Medium-, and Low-Profit Cow-Calf Producers: An Analysis of 2014-2018 Kansas Farm Management Association Cow-Calf Enterprise – A Review

This study by Whitney Bowman, Dustin L. Pendell Ph.D. and Kevin L. Herbel can be found at the Kansas State University AgManager.info website. Review and summary by Aaron Berger, Nebraska Extension Educator.

Whitney Bowman together with Dr. Dustin Pendell and Kevin Herbel recently published a paper that highlighted the differences between 71 different producers with cow-calf enterprises that are part of the Kansas Farm Management Association. The paper examined both returns over variable costs and returns over total costs in 2014-2018. The authors broke out participants in the study into three groups of high-, medium- and low-profit producers. Here are differences that stood out between producers from the data when looking at returns over total costs.

  • Differences in costs between operations significantly outweighed revenue differences. High-profit operations spent $259.93 less per cow than low-profit operations in this study.
  • High-profit operations generated more revenue per cow, $152.32, than low profit operations.
  • Major differences in costs between high profit and low profit herds were found in feed expense. High-profit herds spent a total of $418.66 per cow on grazed and harvested feed, while low-profit herds spent $543.92. This is a difference of $125.26 per cow!
  • Labor, depreciation, machinery and interest expenses were all lower on a per cow basis for the high-profit operations than the low-profit operations. High-profit producers spent on average $100.95 less on these items than low-profit producers.
  • High-profit operations generated on average an annual positive net return to management of $60.53 per cow, while low-profit operations had a negative return of -$351.72 to management over the five year period.

The Kansas Farm Management Association cow-calf enterprise data provides insights into the differences between high-, medium- and low profit producers. Participants in the data set have the necessary production and financial records to know what their production costs are and then can use that information to make management decisions to improve profitability. In this data set, producers who aggressively controlled costs while producing more pounds of calf to sell per cow than their competitors were the most profitable.  Good production with cost control differentiated the most profitable producers from those that were the least profitable.

A one page sample budget titled Estimated Annual Cow Costs for Nebraska 2019 is a tool that can be used to help producers to begin to estimate what their own cow costs are.  Good accounting and record keeping can help producers track their costs and know their cost of production.

For producers interested in learning more about this topic, a Unit Cost of Production Workshop is scheduled for February 5 & 6 at the Cedar Creek Church which is in the Burwell area.  For more information contact Aaron Berger at 308-235-3122.

Interviews with the authors of BeefWatch newsletter articles become available throughout the month of publication and are accessible at https://go.unl.edu/podcast.

Why Water Freezes

Water density changes with temperature. Its densest at 2°c (meaning cold water sinks) just until before it freezes at which point again its density changes and becomes less dense and freezes at the top (ice floats).

On a water tank where the water is being heated by the ground; the warm water will circulate by it self to the top because is less dense than the water exposed to the cold wind.

When this system stops working is when the water exposed to the cold outside air is being cooled at a faster rate than the ground heating effect which means 2 things, your hole in the ground is not big enough or the surface of water exposed to the cold is to large.

Hence why most insulate the top and only allow a small square for cows to stick their heads in to drink.

Check this site out. There is more information and Ideas here that will help with the Freezing Water Issue.

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