As Elmer Kelton said, "Ranching never has been a great living but is sure is a great life."
People tend to produce cattle more for the lifestyle than for its profits. As a result, our industry is made up of many strong and dedicated individuals who love the land and stock that our creator put us here to care for.
The ranching lifestyle is noble and provides a great environment for raising a family, but profitability is required to maintain a viable industry. As beef producers, we must focus on improving profitability and sustainability through satisfied customers.
Our customers want a healthy, nutritious, great tasting and convenient product at an affordable price. As beef producers, we should strive for each of these but focus our efforts on the things we can change most through genetics and management:
* Affordable price (through improved efficiency of production) and
* A great tasting product.
Focus On The Prize Remember as a child, trying so hard not to, "Step on the cracks and break your mother's back," that it seemed like that's where your foot always landed? We tend to hit what we focus on, so in the cattle business why not focus on producing great tasting beef at an affordable price, rather than concentrate on the cracks and imperfections in the industry?
Over the past 10 years, many of us have evolved from being raisers of commodity cattle to being producers of specification beef - and have been paid to do so. We did it by focusing on producing cuts of beef in the meat case instead of just a calf at the market. Beginning with the end in mind, our viewpoint changes and we more accurately produce what consumers want.
Continuing to work independently of each other makes beef producers very vulnerable. It's time for all producers to join forces and work together for the benefit of all beef producers.
We are in the age of alliances where producers work together and gain strength in numbers. The tremendous increase in branded beef products coming from alliances is proof that consumers are willing to pay more for products that consistently meet defined specifications. Alliances like U.S. Premium Beef, Rancher's Renaissance, and Future Beef are providing true value-based marketing and allow producers to receive the profits their cattle deserve. For perspective, every commodity market is a break-even business. Less than half of the cattle sold in a commodity market can return significant profits. Plus, as more of the good cattle go into alliances because of the premiums they earn, there will be fewer good cattle in the commodity market, making the commodity market even more volatile.
So, which market will you choose?
A commodity market - a world defined by price discovery in a population of cattle that is continually decreasing in quality. This market is increasingly volatile and cost cutting is the primary opportunity to increase returns.
Or, a specification market - a world defined by value discovery, which offers tremendous opportunity for profits. Here the quality of the cattle is continually improving, demand is steadier and producers are directly paid premiums for hitting the target specs.
Keep These In Mind * Remember, retained ownership is only one of several options to receive value-added premiums. You can also align with other producers in your area to form marketing alliances like the North East Texas Beef Improvement Organization (NET-BIO). This group has special sales where they add value to their calves by putting groups of producers' calves together in uniform truckload lots.
Participating producers also follow prescribed health specifications. As a result, buyers can come and easily buy truckloads of cattle that are ready to go straight to grass or the feedlot. These calves have sold well over the top of the market every time.
* Another option is to align with your seedstock supplier to help you market your calves.
* For that matter, breed associations should align themselves and work together in areas such as marketing and genetic evaluation. It's time we eliminate our biases and the countless dollars we spend each year in duplicative efforts.
Look at what the pork and dairy industries have done. They have one genetic evaluation that puts virtually all EPDs on a common base so it's easier for producers to use and understand. Plus, it greatly reduces the cost since there is only one evaluation instead of the more than 20 that occur in the beef industry today.
This cooperation can also give tremendous critical mass, which allows us to generate and utilize more accurate tools to help producers hit the targets consistently (i.e., DNA technology).
It's time we join forces, put aside our biases and work in a unified effort to regain the strong demand beef once had with consumers. Let's focus on where we want to be so that we can improve the profitability of our industry and make ranching both a great life and a good living once again.
Donnell "Donald" Brown is co-owner and manager of the R.A. Brown Ranch, a family business since 1895. He and father Rob produce and market Angus, Red Angus, Simmental, SimAngus and Hotlander composite cattle, semen and embryos. The Browns are founders of the Rancher's Renaissance Alliance. For more information, write to R.A. Brown Ranch, Box 789, Throckmorton, TX 76483; or call 940-849-0611 or www.rabrownranch @westex.net.