An exclusive BEEF survey reveals many producers aren't sold on alliances - for now.
Alliances have become a beef industry buzzword, but not everyone is joining them just yet.
That's according to an exclusive survey that polled BEEF readers regarding their involvement and attitudes toward alliances. Only 4% told us they are currently a member of an alliance or formal partnership.
That's a difficult number to compare to industry reports, as alliance participation by beef producers hasn't yet been tracked industry-wide, according to Oklahoma State University Extension economist Clem Ward and Cattle-Fax analyst Mike Miller.
Ward says he's surprised by the low number, but he attributes some of it to definition.
"Producers involved with certain value-based marketing programs may not classify themselves as being in an alliance," Ward says. He says many producers also may not want to reveal that they are members of an alliance.
But, that doesn't mean there isn't a growing interest in value-based marketing programs. Nearly 60% of survey respondents would consider joining an alliance in the future. And, despite the current lack of participation, 75% of respondents think alliances are - or will be - beneficial for the beef industry. Those showing this optimism tended to be younger and have a larger beef operation.
While many producers currently have a wait-and-see attitude toward alliances, the reasons cited for joining an alliance in the future include better control of marketing and the opportunity for better returns.
The 40% of respondents who say they aren't interested in joining an alliance attribute it to independence, lack of information about alliance programs and age - 55% of those answering no to this question were 55 years of age or older.
Other reasons given for not joining included concern over control of breeding programs, bad past experiences with alliances and a sense that their beef operation isn't large enough to participate.
Moreover, respondents are uncertain if alliances are in fact boosting producers' bottom lines. When asked if alliances are helping return more money to producers, nearly 64% were unsure, 24% said yes, and 12% said no.
Cattle prices also appear to play a role in producer attitudes toward alliances. Some respondents feel better prices would increase involvement in alliances, but the majority of comments indicated better prices mean less interest and participation.
In the big picture, Ward doesn't anticipate prices to have a large impact on producers' alliance participation.
"For cow/calf producers, if calf prices get high they may opt out early, but those who have been pleased with alliance performance in the past will likely stay involved," he says.
Other Value-Based Strategies Even though many of the survey respondents aren't tied to an alliance, producers are adopting strategies to improve product and profit potential. Of respondents, 21% are collecting carcass data on their cattle, primarily for use in breeding decisions and herd improvement.
About one-third of survey respondents retained ownership on calves in 1999. A similar number plan to retain ownership in 2000.