Michigan helps build a beef alliance for eastern Corn Belt producers.
Unlike some of the newly formed alliances that clearly spell out operational plans, the Michigan Beef Alliance is still in a start-up mode. For mor e than two years, however, an alliance team representing all facets of the beef industry has been formulating a way to help the state's beef industry stay viable.
"In Michigan, we have lots of smaller producers and a lack of packers," says Quentin Harwood, past president of Michigan Cattlemen's Association and alliance member from Ionia. "So, we've tried hard to look at niche markets to help our producers out.
"By forming the alliance, we're showing packers that we have producers interested in increasing the number of cattle in the state," he says. "And if we've got a strong packing industry, we'll produce the numbers and the right kind of cattle."
In doing that, the team is developing alliances up and down the beef chain, from producers, packers and retailers to university and livestock marketers.
And now, says Michigan State's Harlan Ritchie, a five-state beef initiative representing the eastern Corn Belt is also backing the alliance. Those states are Illinois, Indiana, Ohio, Kentucky and Michigan.
The Mission - Michigan Beef Alliance's mission is straightforward: "Strengthen economic opportunities for the Michigan beef industry by providing value to the customer."
They intend to do that, says Harwood, by following these goals:
* Create a business environment that stimulates quality beef production at a profit.
* Encourage use of cost-effective technology throughout the production and marketing system.
* Increase market share while maintaining industry profitability.
* Identify and communicate consumer preferences to all segments of the industry.
* Enhance product quality and consistency.
* Create partnerships which foster development of value-added beef products that meet consumer demands.
Harwood, who runs about 200 cows and a 300-head feedlot, says that since the discussions have begun, there's a better understanding of consumers and retailers. "Retailers and packers have a chance to listen to some of our problems as producers that they're not always aware of. We've had a good exchange of ideas.
"Right now, we're looking for several avenues in niche markets," Harwood explains. "There's no membership fee. We're just building the framework for cattlemen to add value to their calf crop."
For now, Harwood says the alliance's strongest edge is on the marketing side. Moyer Packing Company, part of the alliance, for example, is helping market Michigan beef that fits the Japanese and eastern hotel and restaurant trade. That means cattle in the high-Choice range with high marbling, generally black cattle that are 50% Angus and 50% other British breeds, says Harwood.
"However, the alliance doesn't promote any one breed," Harwood says. "If feeders can fill their lots with more predictable cattle with the right genetics, they're more likely to get a premium and we hope to be able to line up a packer that will reward them."
Michigan Livestock Exchange (MLE), also an alliance member, has developed two programs, supported by the alliance, to help producers upgrade genetics: an Angus heifer replacement program and an Angus bull leasing program.
According to MLE's Ray Ramsey, the heifer program acquires specially selected heifers bred to high-marbling and high-carcass sires and places them with producers in Michigan, Indiana and Kentucky. The heifers are financed over a 10-year period. The bull leasing program leases bulls to members for $500/year for a three-year minimum, he explains.
Consumer Acceptance - "We've learned that consumers demand high-quality product," Harwood says. "For instance, Spartan Stores branded beef is higher priced, but demand is there. It's consistent. So, we've learned we need more consistency to enhance value. Even though we read about it, until a retailer tells you, it doesn't hit home."
More and more, packers are interested in marketing to specific niches, says Joe Gordon senior meat consultant with Sparks Companies, Inc., Grand Rapids, MI, and part of the alliance team.
"Regional packers are in a branded mode to stay in business. To survive, big packers will need to get into branded, too," says Gordon.
"Now, with per capita consumption of poultry increasing, retailers are realizing they have to move lots of poultry to meet prices they get from beef. So, retailers want higher-priced beef cuts. Unlike 10 years ago, retailers are now driving the process."
For more information on the Michigan Beef Alliance, contact MLE's Ray Ramsey at 517/337-2856.