The world's largest cattle feeder wants to buy directly from you - over the Internet.
Cactus Feeders wants 1 million head of cattle a year. And, in looking for the best way to get the cattle they need, the cattle feeder has launched an Internet Web site designed to buy directly from cattle producers.
"Our new Web site lets us reach out beyond traditional order buyer and sale barn sources and work directly with cattle producers," says Paul Engler, Amarillo, TX, chairman of the board and CEO of Cactus Feeders. "We are in the market every day to buy high-quality feeder and stocker cattle, and this is one way to get the cattle we need."
Cactus Feeders has always emphasized buying direct, Engler says. "But, the main purpose of the Web site is to allow people to come to us and give us an opportunity to buy their cattle."
Producers across North America can offer their cattle 24 hours a day, seven days a week, listing the type of cattle and number of head, delivery date, location and other details of the cattle being offered. Once entered, a Cactus representative will review the listing. Depending on the relationship with the seller, an offer might be made the same day. But, quick response is only one reason the Web site is being promoted by Cactus Feeders.
Engler says this Web site allows producers and feeders a way to get around the marketing inefficiencies common in the cattle business.
"The added burden of marketing costs have been a yoke around the neck of this industry for a long time. It's a mess," he says. "Animals can change hands eight or nine times - and each time an animal is traded, there are added costs. A lot of times little or no value is added."
Engler figures a cattle producer can incur as much as $41.50/head in marketing costs through the traditional order-buyer or auction market systems. Through direct marketing, those costs can be as low as $3/head.
One reason competing meat industries have a leg up on beef, Engler says, is because they are vastly more efficient in their marketing structures. "I guarantee you, they don't take any chickens to the auction market," he says.
"We're not out to declare war on the auction barns or the video auctions," he says. "They serve a purpose, but at the same time they increase the cost of marketing."
The new Cactus procurement system is not without cost though, especially for first-time transactions.
"Once it looks like a deal can be struck, we'll send a representative out to look at the cattle and complete the sale," explains Paul Colman, vice president and director of customer relations for Cactus. "After a relationship is built and trust is developed between both parties, we'll likely eliminate the need to send a buyer out to look at the offering."
Prices will be negotiated on a load-lot basis, and smaller producers are encouraged to put together cattle with neighbors and develop load-lots. Web-based procurement is also available to Mexican producers from which Cactus already imports 150,000-175,000 head of cattle each year.
"We'll still use traditional means to locate cattle," says Engler. "But, we're excited about the opportunities provided through the Internet."
How To Contact Cactus Feeders Cactus Feeders, which is 32% owned by its employees, operates nine feedyards in the U.S. - seven in Texas and two in Kansas - and one in Argentina.
For more information about Cactus Feeders, contact them via the Internet at www.cactusfeeders.com; or call toll free at 877/698-SELL (7355), or 806/373-BEEF; e-mail to: [email protected]; or write to: 2209 W. 7th Ave, Amarillo, TX 79106.
Cactus Feeders recently developed a cattle feeding operation in Argentina with 12,000 head presently on feed. BEEF asked Paul Engler, Amarillo, TX, chairman of the board and CEO of Cactus Feeders, how the venture is going.
"It's tough," he says. "We're up and going, and we're building business, but cattle feeding is so new and so foreign to the majority of Argentine ranchers that it's hard to break into the business there."
The real problem, however, lies not with the producers but with the packers. Most packers are not "liquid," and it can take up to 45 days to get paid by a packer.
"I stuck out my chest when I first went down there and said I wouldn't stand for that," quips Engler. "Well, the fact is, either you wait or you don't sell your cattle."
The Argentine packers are terribly inefficient, and the transportation system is vastly inferior to what we have in the U.S., Engler says. Coupled with political and economic instability, the overall infrastructure does not lend itself well to large-scale cattle feeding.
"They are covered up with paradigms that you can't believe," adds Engler. "Things change very slowly down there."
He says most of the beef produced in the Cactus operation located in San Luis province (372 miles northwest of Buenos Aires) stays in Argentina and is sold through the larger chain stores that cater to the higher-end customers.
"The Argentine market comes first," he says. He notes that most of the cattle Cactus feeds in Argentina are presently done so on a custom-feeding basis.