Dave Nichols of Nichols Farms at Anita, IA, says being better isn't good enough for seedstock producers.
The Angus, Simmental and Salers breeder says, "We can't build a better product, because with EPDs anybody can do what we do."
Instead, Nichols has turned to customer service.
"We at Nichols Farms came to the conclusion if we were going to survive, we had to become a service organization," he says.
Nichols points to other industries - all John Deere tractors and all Fords are the same; 73% of the hogs raised in Iowa come from one of four genetic sources; Pioneer hybrid corn contracts out their genetics to growers for seed corn.
These industries have a centralized system to produce and market their products, says Nichols. He predicts that will happen in the beef industry as well.
"I believe by 2010 there will be 100 seedstock providers. In 2020 there will be four," says Nichols.
Fewer people will be making central breeding decisions in the beef industry. One enterprise will have several satellite cooperating herds, he adds.
Adding Real Dollars "You can't build a better product. What's going to change that is service that adds real dollars to the people who are using those genetics," Nichols says.
"Service is not a cup of coffee and a smile. Service is hard to charge for," he adds.
For Nichols Farms, located in southwestern Iowa, the first step towards service came in the form of hiring a service manager who spends at least half of his time on herd visits helping plan breeding programs for customers.
Nichols Farms also offers to market every calf out of a Nichols bull. To do this, Nichols markets replacement heifers and hosts commingled sales of cattle sired by Nichols' genetics. To participate, calves must also go through a preconditioning program that specifies animals must be given vaccination shots and be weaned for at least 45 days.
Over the last three years, the sales have added an average of $67/head more than if the cattle had been sold the next day at a sale barn, says Nichols.
The Nichols service program also includes alliances with five feedlots that cooperate in collecting individual carcass data for producers. Last year, data was collected on 5,750 individual carcasses. In the near future, Nichols' goal is for every calf sired by Nichols' genetics to have individual animal identification, so information can be traced back and improvements can be made.
"We really believe the service we provide will be the difference in our survival," says Nichols. "We're open Monday through Friday and Saturdays - which is probably our busiest day. We man the phone 7 a.m. to 7 p.m. and you'll never get an answering machine or someone who doesn't know what they are talking about.
"Service is where it's at, stop talking about it and start doing something about it," he says.