Beef Buzz News
Do You Know What Your Cattle are Really Worth? CAB’s Justin Sexton on the True Value of Quality
Wed, 17 Oct 2018 15:46:48 CDT
If you are in the stocker cattle end of the beef business, you know the right kind of cattle can make or break your operation, financially speaking. Justin Sexton is director of supply development at Certified Angus Beef. According to him, it is a good idea for stocker operators to think about the next owner of their cattle. Even as you are buying them, he says you need to buy them with consideration of what the next buyer will want in order to offer an animal that will command a premium price at auction block.
For more of Sexton's advice on how to develop and market your cattle's full potential value, tap below.
“From a quality perspective, we see feedyards have increased competition and the quality grade has continued to improve. So, what are some of the supplementation strategies the stocker operator can engage in to make sure that the next customer - the feedyard - has the greatest opportunity for those cattle to grade,” Sexton said.
The truth is, numbers tell a story when it comes to profit and loss. In reality, the market is trending toward a preference for cattle that are managed with quality in mind as a standard benchmark. According to Sexton, managing your cattle in such a way that moves the needle only marginally but enough to bump them up into the next quality grade can command a modest premium of $4 to $6 per head. However, if cattle are not managed for quality, functionality slides as much as 32 percent of these cattle outside of the premium scale and ultimately takes away from the producer’s bottom line.
“So, if the $4 to $6 premium going forward isn’t enough, the idea of a $13 to $15 loss is something surely for them to think about as they plan their strategies going forward,” he said, adding that it is ultimately up to the producer to promote the investment put into his cattle. “When a stocker operator can communicate the genetic potential or even the management practices they have to the feedyard operator, that’s when it has the most value to them. So, really the challenge is - how do I communicate that in a way that conveys the confidence that they can buy those cattle.”
Sexton’s advice is to build a one on one relationship in order to have those discussions in person, face to face, for the best results. He suggests also engaging with an auction market that focuses on this type of direct marketing that can help producers effectively communicate the value and quality of their cattle to buyers.
For more of Sexton’s advice on how to develop your cattle’s full potential value and effectively market them based on those qualities, listen to his full interview, with Radio Oklahoma Ag Network Farm Director Ron Hays, on today’s Beef Buzz.
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