Beef producers are putting the Web to work for their cattle operations.
Seems like everything and everyone has their own dot-com address these days. And beef producers are no exception.
Computers, the Internet and e-business (e-mail, e-commerce, e-trading) are finding their way into beef operations, according to an exclusive survey that polled BEEF readers regarding their usage of electronic technology.
Nearly 52% told us they use a computer (other than DTN or Farm Dayta) in their beef operation. And, 47% say they use the Internet - of which 88% are 35 years of age or older.
E-mail (65%), market information (21%), weather information (20%) and gathering farm product price quotes (20%) were the most popular reasons cited for using the Internet. While many expressed interest in buying and selling livestock and farm-related products on the Internet, just more than 7% of respondents currently access the Internet for e-commerce.
Those numbers indicate beef producers are well ahead of other ag producers when it comes to utilizing the Internet, as the USDA estimates only about 30-35% of the total 1.9 million U.S. farmers are online.
Michelle Packard, director of marketing for the Internet site CattleSale.com, confirms that trend. On the Web, the Boise, ID-based company - which Packard describes as a "cattle company using the Internet to bring buyers and sellers together" - has sold 95,000 head of cattle since last August.
"We've found ranchers are among the first to embrace technology," Packard says. As an example, she points out that ranchers were some of the first to use cell phones in the 1970s.
While CattleSale.com has held real-time auctions, its most popular market is the "Country Page," which allows buyers and sellers to work in a bid-ask format.
"We haven't felt a lot of apprehension to buying and selling cattle on the Internet," Packard says. "Producers realize this format exposes them to a national market which expands their marketing potential," she adds.
Among BEEF readers, breeding stock, feeder cattle, livestock equipment and hay/grain were the items respondents showed the most interest in for e-commerce. They cited convenience, saving time and saving money as reasons for buying over the Internet.
Dean Talbert, manager of Alisal Cattle Ranch in California, started using the Internet three years ago. Today, he buys and sells cattle on the Internet, primarily on CattleSale.com.
Talbert reports he's had "outstanding results" with Internet marketing. "It's helped our beef operation with speed and accessibility," he adds.
More Than Buying And Selling But Talbert, who says he still remembers the typewriter, doesn't just turn to the Web to buy and sell cattle. Like many of the readers BEEF surveyed, he also utilizes the Internet to collect information, check markets and follow prices.
Jim Gerardot with DirectAg.com (www.DirectAg.com), an Internet company that offers crop, machinery and parts and animal health products, says it's that dual combination of information and products that is important to building online clients. Gerardot is executive director of animal health and productivity for the St. Paul, MN-based company.
"It's a relationship you build that is more than e-commerce," Gerardot says of Internet marketing. For example, as an added value to customers, DirectAg.com recently launched its "Daily News Roundup" that livestock producers can subscribe to free. The daily e-mail service includes current news, production articles and partnership links.
Gerardot says offering such value-added content is an important service in developing a site's reputation and a comfort level among new buyers. Gerardot reports that DirectAg.com, which went online about a year ago, has found producers can be cautious in changing their buying habits.
That caution was evident among BEEF readers responding to our survey. Despite the new choices and lower prices Web sites may offer, more than 60% of respondents have not bought farm-related products on the Internet because they want to give support to local businesses.
"Catalog buyers are the first to adopt buying online," Gerardot says of his company's experience with e-commerce customers.
To compete and gain new customers, Gerardot says, like any business, producers need to become familiar with a company.
Talbert agrees. He says he still considers a company's reputation whether he's buying online or on main street. And, while Talbert still purchases most of his livestock products locally, he views the Internet as an additional tool for modern day business. "A business is like a family, and it's got to grow. The Internet is one way to do that," he says.
Other Comments Competing with local loyalty isn't the only challenge for Internet-based companies. Fear was the second most common factor that impeded Internet sales. Many survey respondents also attributed their wariness of e-commerce to a lack of knowledge. They indicated interest but just weren't sure of how to buy or sell online.
On average, BEEF readers spend five hours/week on the Internet and access the Internet about four days/week (that's about an hour a day). Only 8% of respondents reported participating in a farm-related chat room.
In addition to computers, cell phones rank as the most popular electronic device among survey respondents. Nearly 64% have a cell phone, followed by satellite dish (more than 50%), fax machine (30%) and DTN (16%).
Although doing business in cyberspace can seem a little scary, most e-commerce experts stress that - with a little common sense - there's no need to fear conducting business on the Internet.
Nonetheless, fear prevails. Nearly 40% of BEEF readers responding to an exclusive survey about e-commerce told us they're worried about online credit card fraud, more than a third had concerns about product quality, and one-third were wary of delivery and support. To ease those concerns, here are some guidelines:
Security. Buying on the Internet is "at least as safe as buying something over the phone," says Steve Salter with BBBOnLine, a Better Business Bureau (BBB) Program at www.BBBOnLine.org.
That's because most sites subscribe to services that encrypt credit card numbers to ensure the information never passes across the Internet in a readable form.
To be safe, Salter suggests looking for the following visual cues to be sure a site is secure before giving any valuable information.
- Most sites will alert you with a pop-up message when you are entering a secure server.
- Or, look for security logos on the homepage. For example, with Netscape and Internet Explorer, a locked padlock will appear in the lower left-hand corner of the screen.
- A third clue, the "http" in the URL address box will switch to "https" on secure sites. The added "s" stands for security.
Privacy. Many Internet sites do track customers, so it's best to find out what they'll do with the information they collect before you place an order.
"At present, there's very little regulation as to what online marketers can do with the information they collect," Salter says.
A good rule: don't disclose information you wouldn't disclose over the phone or in person. And remember, your Social Security number or bank account number should not be required to make a purchase.
Delivery. Buying over the Internet also means relying on the company to deliver a quality product in a timely manner. To minimize risk, Salter suggests dealing with reputable companies and/or looking for companies that have again been reviewed by a third party.
BBBOnline offers their reliability seal to businesses they've identified as having a good track record, says Salter, who heads up the program.
To qualify for BBBOnLine's reliability seal, the company must have been in business for at least one year and must handle complaints responsibly. BBB also reviews the company's Web site to ensure all claims are accurate and visits each company on-site.
Lastly, to earn the BBBOnLine reliability seal, the company must make a commitment to work with BBB to resolve complaints. Currently, 5,600 companies have qualified.
Other considerations when it comes to delivery:
- Plan ahead and allow time for delivery. Delivery of products purchased online averages at least a week to 10 days.
- Ask about shipping costs. These are usually included in the purchase price, but some sites charge an additional fee, so be sure to ask. One bonus is that buyers are often exempt from sales tax on e-commerce products. But again, it's wise to ask if tax is included.
- Also ask about return policies. Like most retailers, many online sites allow you to return an unsatisfactory order within 30 days after receiving it. But, be aware that few e-commerce sites provide local services. And, performance complaints are handled by the manufacturer, not the online retailer.
Reputation. Finally, before making any Internet purchase know the reputation of the individual or company you plan to purchase from.
"We don't want to say only companies with our logo are safe to do business with, says Salter. "For example, Amazon.com doesn't have a BBB seal. They've built a good reputation and think they don't need it."
Instead, Salter says, the best rule of thumb is, "Do business with companies you trust."
To check a company's history contact the BBB at www.BBB.org or visit with others who have done business online.