Value-based marketing alliances appear to be becoming more alike than different.

More alliances are marketing more cattle for similar premiums, but reported requirements are loosening, and more are reaching back to the cow-calf producer to source the cattle their customers want.

Taking a read on the evolution of beef alliances is akin to charting the stars with a rubber band and thumbtack. Distance, dynamics and proprietary information mean you can't ever be sure about what you're seeing, yet the process can confirm previous conjecture and uncover new ideas.

There is nothing scientific about the alliance information presented in these annual BEEF Alliance Yellow Pages. The various programs participate if they want and provide the information they choose. Considering the information compared to the past, however, does serve up some observation and speculation worth tracking.

Based on the information reported by 34 consumer-based alliances this year compared to that reported by 36 organizations last year, here's what we're seeing: (BEEF's observations are in italics):

  • A total of 4.7 million head of cattle were marketed through alliances in 2001, a 20% jump over 2000. This number includes 2 million head reported by Certified Angus Beef.

    That's certainly in keeping with the increased volume of cattle trading away from the spot cash markets, as well as the growth of branded beef products.

  • Twice as many alliances (10) marketed 100,000 head or more.

    As major retailers begin establishing partnerships with supply chains, volume becomes its own reward.

  • A total of 38% of the alliances participating in this year's BEEF Alliance Yellow Pages report offering some sort of post-harvest premium to cow-calf producers who raise the cattle that ring the performance bell. This is regardless of whether or not those same producers retain ownership in their cattle through the feedlot.

    A couple of years ago, only a couple of programs offered economic incentives ahead of the feedlot. The growing use of this tool underscores how much added value the right kind of cattle in the right situation bring to the equation.

  • The premiums cited this year represent a dramatic widening in the range of value. The top premium cited this year is $270/head, compared to $60/head last year. Take a couple of these stratospheric premiums out of the mix, however, and the premiums are virtually the same, ranging from about $10/head to $60/head.

    On the extreme end, it makes sense that cattle that must fit a tighter window should be worth more. A similar range across years might underscore the fact that there's a point at which cattle aren't worth any more, no matter what you do to them.

  • A total of 44% of the alliances this year cite a minimum number of cattle as a requirement, compared to 53% last year.

    Rather than moving away from the efficiencies of moving loads of cattle, this might indicate more pooling and commingling of calves so that operations of all sizes have more opportunity to participate.

  • Of this year's programs, 56% cite some type of management or identification requirement, compared to 65% last year. Of those, 37% require that cattle be managed to meet natural beef specifications.

    While the numbers are similar, possibly some requirements once deemed as an added-value luxury, such as health management, are becoming a standard of admission.

  • A total of 82% report offering pricing grids — either yield-based, quality-based or both — compared to 94% last year.

    Certainly, there seem to be more systems transcending pricing models based in the commodity market and moving closer to the consumer; typically working more closely with the packer and retailer to determine value.

  • Choice Yield Grade 3 is cited by 63% of the programs as the par point in their pricing system, compared to 56% last year.

    True to the past, this continues to be the middle ground of value for the majority.

Alliance Web Address Contact Year estab. Cattle in
in 2001
Cost Minimum
geared to
QG, YG or both
(see key)
Par point
on grid
Consumer-Based Programs
Angus America
Mark Nelson
1996 120,000 $13/hd $1-6/hd 35 QG Choice YG3
Angus Gene Net
Ken Conway
1998 100,000 $19.64/hd $3/hd 20 both Choice YG3
B3R Country Meats
James Henderson
1986 30,000 $60/hd none 40 both Choice YG2
Beef Advantage Project
James E. Herring
1996 confidential confidential none one load both confidential
Brangus Gene Net
Ken Conway
1999 100,000 $19.64/hd $3/hd 20 both Choice YG3
Caprock Industries
Sharing Total Added Value
Ben Brophy
2000 40,000 $23/hd none 120 hd, one sex both Choice YG3
Certified Angus Beef LLC
Steve Suther
1978 2 million Ch/Se + $3/cwt. none 1 both vary with packer
Certified Hereford Beef
Rob Ames
1995 93,821 N/A none 1 both YG 3 or less
Select or better
Charolais Gene Net
Ken Conway
2002 100,000 $19.64/hd $3/hd 20 both base-Choice YG3
Coleman Natural Products Inc.
Jim or Scott Coakley
1979 60,000+ N/A none 1 QG Choice YG2 & 3
ConAgra Better Beef LLC
Al Perez
1995 250,000 N/A no cost group data
$1-3 individual data
load lots both Choice YG3
Country Natural Beef
Doc & Connie Hatfield
1986 33,000 cost of production/return on investment member of co-op NA both high Select, low Choice YG1 & 2
Decatur Beef Alliance
Warren Weibert
1994 40,000 Confidential $12/hd load lot of same sex both N/A
Farmland Supreme Beef
Dusty Turner/John Parker
1995 40,000 $18.01/hd $2.50-4/hd one load or 70 hd both Select YG3
Five-State Beef Initiative
Ron Lemenager
1998 8,000 N/A None 1 both N/A
Future Beef Operations LLC Ronnie Green
1998 420,000 N/A none one load of either sex both depends on which grid; Angus grid/muscle grid
Gelbvieh Alliance
Dennis Fennewald
1995 44,000 $9.69/hd $1/hd 1 both regional averages
Glacier Beef Inc.
Bill Nice
1999 14,000 $20/hd $10/hd 500 - all steers both Select YG3
Iowa Quality Beef
Supply Network
Phil Core
1999 125,000 $23/hd up to $5/hd 30 Both Choice YG3A
Lean Limousin Beef Co. Carlton Noyes
1988 6,000-7,000 $3/cwt. none 1 YG N/A
Maverick Ranch
Natural Lite Beef
Bob Rolston
1985 35,000 N/A none load lots both Select YG1
Nebraska Corn-Fed Beef
Jo McElwain
1997 25,000 $12/hd $4/hd 1 both Choice YG3
Nolan Ryan's Tender
Aged Beef
Charlie Bradbury
2000 60,000 N/A none 1 N/A N/A
Painted Hills Natural Beef
Glenda or Mehrten Homer
1996 6,000 N/A none 1 QG Choice YG3
Performance Plus-Retained Ownership Don Cain Jr.
1993 confidential $29.49/hd $7.50/hd 1 both N/A
Performance Plus-Sale Barn Don Cain Jr.
1993 confidential $22.33/hd $8/hd 1 both N/A
Power Genetics
Jason Anderson or Mark Tracy
1993 confidential confidential none 35 both confidential
Premium Quality Foods Inc./Red Oak Farms Premium
Hereford Beef
Pete Hudgins or Steve Berendes
1996 41,000 N/A none 1 QG Select YG3
Ranchers Renaissance John Butler
1997 100,000+ confidential confidential confidential confidential confidential
Red Angus Feeder Calf Certification Program
Ann Holsinger or Blake Angell
1995 96,000 depends on location $1.25/hd 1 QG Choice YG3
U.S. Premium Beef Ltd.
Tracy Thomas
1996 700,000 over $25/hd average, top 251 = $45/HD membership and share access 20 both 50% Choice YG3
Western Beef Alliance Inc. Terry O'Neill
1994 2,200 $58/hd $0-7/hd 40 both YG2.8 and Choice - Select +
WRB All Natural Premium Beef Carolyn Carey
1998 N/A $130/hd $3/hd 1 both Choice YG3
Western Grasslands Beef Carolyn Carey
2002 N/A $270/hd $3/hd 1 N/A N/A
Calf-Based Programs
Jon Janssen
2000 6,000+ $4.50/cwt. over market none none CAB/Both N/A
Land O' Lakes/Farmland Beef Connection Doug Stanton
1999 15,000/hd
work with several grids $3/hd 20 N/A N/A
MFA Health Track Beef Alliance
Mike John
1998 41,000 $27 none for members 1 N/A N/A
Montana Beef Network
Adrienna Hines
1999 8,000 N/A $2/hd 1 N/A N/A
Piedmont Cattle Producers Association
Phil Slay
1994 2,100 8¢ over market $1.25/hd 20 N/A N/A
Grids geared to QG = quality grade, YG = yield grade, Both = quality and yield grade
Practices Required: S = source verification, W = weaning, P = preconditioning, N = natural (i.e., typically prohibit the use of antibiotics and growth hormones)