Squeezing more jingle out of the cattle business isn't for everyone. But, for those who want to pump up the bottom line there are still plenty of opportunities that cost little more than an open mind, a sharp pencil and some brain sweat.
Just ask Bob Bachman, vice president and manager of Agri-Ventures Corp., Graham, TX. Frustrated by the average-based marketing system, Bachman started sending cattle through B3R Country Meats at Childress, TX. He wanted to find out more about his cattle, while shooting for extra returns based on carcass merit.
Last year, some of those cattle earned over $100/head premium and a few lost over $100/head. Overall, however, he pocketed another $21.11 average/head, just for carcass premiums. B3R also pays premiums for dressing percentage and for the non-implanted cattle their product requires. Total premiums paid last year averaged $61/head.
"When producers see how much the top third of the cattle make, there is a lot of incentive to get rid of the bottom third and to move the entire group toward the performance of the top third," says Neal Odom. He's manager of McLean Feedyard, McLean, TX, currently the exclusive feeder for B3R.
Indeed. With about 300 head in each cut - steers and heifers combined - Bachman's top third averaged $32.70/head for carcass premium last year, compared to $8.73/head for the bottom third.
And, those premiums pale in comparison to identifying the most efficient cattle in the feedlot and pasture.
"There is the potential to increase the income at least another $110-170 per head," says Odom. He's alluding to the added promise of everything from reducing health risk entering the feedlot to chopping an extra cycle off of a long calving season.
Moreover, Bachman says the individual feedlot and carcass data that B3R provides free, in tandem with his individual cow records, give him firmer control of genetic selection.
"It helps confirm my ideas on how to mesh the traits of the cows together because an ideal carcass animal is not necessarily an ideal brood cow," he explains. In fact, economic incentives are strong enough that he has used DNA to identify which bulls sired the top and bottom ends ofhis cattle.
Going Full Circle "We're trying to get it to where the cow herd is working for the rancher and not the other way around," says Mary Lou Bradley, B3R president. She founded the company in 1986 with two simple goals: Help ranchers make a living and provide consumers with the same kind of tender beef she and her family always ate at home.
That's not lip service, either. As the fourth generation at the Bradley 3 Ranch near Memphis, TX, Bradley was looking for a way she and other folks like her could avoid being the last generation on the family ranch.
"There is no silver bullet to any of this. It's a matter of understanding all the dynamics," says Bradley. Rather than build a system that focuses solely on paying carcass premiums, B3R builds long-term partnerships with producers, sharing information back and forth that can help everyone in the system make more money. This full-circle approach, she explains, means dissecting the interrelated genetic, environmental, nutritional and economic opportunities that exist in every operation.
B3R and its production partners are just as likely to share grazing management tips and early weaning techniques among the innovative network - anything that impacts the end product and bottom line - as they are to visit about premiums on the last set of cattle.
"The vision is to find those people who have a goal not only to raise good cattle, but to know they have good cattle by gathering information; people who truly want to improve their herds," says Bradley. "Some come seeking help and some come to teach us."
Currently, B3R works with 150 ranchers in 18 states. Not bad for an operation that was harvesting seven head per week in 1986. Some time back, B3R passed up 90 head per week.
"Growth this year is the largest in our history, and that's not counting new customers," says James Henderson, B3R manager. "People buy it the first time because they want a product that hasn't received any antibiotics or growth hormones. They buy it the second, third and fourth time because it tastes good."
Peek into the company coolers and you'll find consistency is also a customer hallmark. Up and down each rail, the uniformity of carcass size, fat, ribeye and marbling is remarkable.
B3R is after Choice and better, high yielding cattle that will reach acceptable harvest weights at 18 months or younger without ever receiving antibiotics or growth hormones. Cattle must be preconditioned and weaned for 45 days before entering the feedyard.
Along the way, producers follow defined management protocol and sign production certificates for every set of cattle. This provides the foundation for the company's quality assurance trace-back system that B3R uses to enhance consumer confidence.
But B3R doesn't control production as much as build a system of consistency.
"The thing I see is that so many branded beef programs want to control the production end in order to control the consistency of the product. Our philosophy has been to provide the incentives to produce what our customers want, and to teach producers how to do it, rather than control the production," says Henderson.
"So we teach ranchers to look at each cow as an individual investment, then when one cow is returning $1,000 and another is returning $500, the decision making gets real easy," he adds.
Moreover, decision-making is made easier since B3R targets rarely change. Unlike most value-added systems, B3R's pricing grid remains relatively constant so that consumers get what they want consistently and producers have the time and incentive to push more cattle toward the bulls-eye.
Getting Started "Participating in the B3R program is not something where you can just pick up the phone and decide you're going to send cattle next week," says Odom. In fact, cattle entering the program must have a reservation number at the feedlot. And, reserving space means taking the time to get acquainted.
For one thing, Bradley explains, "The more we know about your cattle and the more you know about us, the more predictability we all have."
Keep in mind that while some B3R partners buy cattle to feed from time to time, either outright or in partnership, the bulk of B3R's supply comes via retained ownership. So first-timers represent as much risk to B3R as their value-added system does to folks who don't know how their cattle perform.
"Because we're such a niche market, we don't have the diversity of larger programs. If cattle come here that are out of our norm, it's a wreck... An outlier is an outlier. It costs everybody money," says Bradley.
Unlike branded programs with broader specifications, B3R can't skim feedlot pens to pick up supply slack. They must know cattle will qualify for their narrow acceptance window when they go on feed.
Likewise, Bradley says, "You can make a lot of money feeding cattle and you can lose a lot of money. We don't encourage people to come to this program if they've never fed cattle before."
With that in mind, anyone interested in B3R will usually find their first inquiry going like this: Have you fed cattle before? If you have, how do they perform in the feedlot and on the rail? How long is your calving season? Do you implant your cattle? What are your goals? Why do you want to be a part of this program?
If interested producers have never fed cattle before, Bradley recommends they at least send some through a ranch-to-rail program.
"These programs are designed to educate you on a small enough scale that it can't bankrupt you," says Bradley.
Once a partnership is forged, however, participation is fairly simple. Bachman, for example, never did make antibiotics a part of his preconditioning program. And, he quit implanting his cattle several years ago, believing it added to the variation of his carcass quality. Besides, he points out B3R pays a premium to offset performance lost by not implanting.
On the other end, the only added fee is $5/head charged by the feedlot to cover added costs of managing cattle for the program. These costs include residue testing cattle upon receiving and shipment.
"It's a comprehensive program," emphasizes Odom. "It really fits people who have a long-range commitment. Someone who just does it one year and gets out will get some useful information, but there is a learning curve to all of this. The real benefit to the program comes in the long-term."
For more information about B3R Country Meats, call 940/937-8870.