The American Gelbvieh Association (AGA) has a history of seedstock industry-leading initiatives. The latest — Gelbvieh Profit Partners LLC, set to debut in September — will take AGA all the way to the consumer.
In April, AGA will begin selling open-market investment units at $500 each for Gelbvieh Profit Partners (GPP). The goal is to raise $1 million to bankroll the venture's first-year involvement in full or partnership purchases of Gelbvieh-influenced feeder cattle, as well as potentially partnering on some of those cattle all the way to the meat case.
Wayne Vanderwert, AGA executive director, says GPP is a natural next step for AGA, and one that fits with the association's progressive history.
Lori Maude, AGA director of communications, points out that the association was a seedstock-industry leader in offering such initiatives as commercial cattle marketing, grid marketing programs like the Gelbvieh Alliance in 1995, and crossbreeding programs like the Balancer hybrid program launched in 1998, and the SmartCross program in 2001.
“Through Gelbvieh Profit Partners, we will purchase Gelbvieh-influenced calves through special feeder-calf sales or direct purchase,” Vanderwert adds. “It's the next step the seedstock industry needs to take. AGA wants to take an aggressive posture and be involved in a national scale of feeding Gelbvieh-influenced feeder cattle.
“Now that we have people using our Gelbvieh and Balancer genetics in cross-breeding programs, we need to make sure those commercial producers are getting the extra value they deserve,” Vanderwert says.
At press time, AGA was finalizing required documentation for the LLC. A mailing to prospective investors — identified as AGA's membership, commercial bull buyers and feedlots that have participated in Gelbvieh Alliance and Gelbvieh grid programs — was to be sent in April. The goal is to raise necessary funds to enable startup on Sept. 1.
“That would mean having management in place, investment money in hand, ready to start buying feeder cattle this fall,” Vanderwert says.
AGA hopes consecutive-year commitments by investors will enable the GPP program to grow quickly.
“One-million dollars doesn't sound like much, but if you can leverage that money by buying a 50% or a 25% interest in the cattle and partnering for the rest, you can generate some good buying power,” Vanderwert says. “We've run the figures and we're comfortable with our ability to purchase cattle, and we feel the program will have an impact even in the first year.”
A $500 investment will purchase a single open-market unit in the LLC. There is no marketing obligation connected with the purchase.
“We'll be purchasing these calves through Gelbvieh-influenced, feeder-calf sales, which we'll set up anywhere and anytime we have a group of breeders and a sale barn in an area who want to cooperate,” Vanderwert says. “In cases where commercial herds are smaller, we'll work with our breeders in arranging cooperative backgrounding programs in order to build uniform semi-load lots for movement to a feedlot.
“There again, it offers another opportunity for Gelbvieh breeders to help coordinate things in their area. All of this is very service-oriented toward commercial customers,” Vanderwert says.
Vanderwert admits cattle feeding can be a risky business. “We hope that through some feed efficiencies we can pick up through Gelbvieh genetics, we can do a better job of feeding cattle. We also will seek to align ourselves with branded-product programs in order to help remove some of the valleys from the market,” he adds.
Vanderwert says he's encouraged by the industry reception to the concept. Thus far, Rancher's Renaissance, a farm-to-fork beef marketing alliance, and two packers have shown interest.
“Working with an outfit like Rancher's Renaissance would offer the program a very good partner, as well as a risk-management opportunity. Another bonus would be the collection of carcass and consumer attribute data we can, in turn, use for breed improvement,” he says.
AGA will hire a CEO and a staff person for the GPP program. Existing AGA staff will also be involved.
“Some AGA staff will certainly be involved in helping source cattle for the program. For instance, Dennis Fennewald, our commercial marketing person, will set up feeder-calf sales for the program. We'll also work with reputable order buyers for cattle purchases in sale barns, as well as direct off the ranch,” he says.
For more information on the AGA and its programs, visit www.gelbvieh.org.