Tap into the “locavore” movement and earn big premiums. While it isn't quite that simple, the potential is encouraging.
At least Michael Klein hopes so. After nearly 20 years of feeding his calves at a commercial feedyard to obtain data for his purebred program, Klein is taking a more “local” approach. And he hopes his new plan is a hole-in-one that produces premiums for all links in the chain — producer, meat purveyor and restaurant.
The Texas Hill Country Angus producer is now contracting through a local beef processor to market his steers and spayed heifers to a new Marriott golf resort nearby. The deal will see beef lovers, including PGA Tour players, dining on his fare.
The ranch is headquartered in Stonewall, TX, where Klein's family has ranched for 150 years. He depends on top genetics in his seedstock operation, and some of his best genetic information comes from harvesting the data from every calf's feedyard and packer performance.
“I sell breeding stock I know can produce calves that do well coming out of the feedlot,” says Klein, who maintains an Excel-based “master data sheet” on every animal. Klein has fed more than 350 calves since 1993. Using that data, Klein now achieves about 60% Certified Angus Beef® (CAB) on his fed cattle, compared with a national average of about 15%.
“Our cattle have always gained a $5-$8/cwt. premium,” Klein says. “But we need that premium to be higher in our new local program because we don't have the economies of scale that large feedlots and packers enjoy. Although it may sound counterintuitive, it's more expensive to produce locally raised beef.”
Klein's breeding program sees about 130 calves born annually, two-thirds in the spring and one-third in the fall. “We normally steer 40-50% of our bull calves and spay 40-50% of our heifers,” he says. “Those calves usually go to a Texas Panhandle feedyard. But we're taking a different direction this year after being approached by Lonestar Food Service in Austin to furnish beef to the new golf resort in north San Antonio.”
Buy local program
Klein says his sales to the resort are part of its plan to provide restaurant menu items with foods coming from local producers. It's a “buy local” program and Klein is one of the meat providers.
“On our part, we will provide beef from cattle that receive no antibiotics, no added hormones. If any cattle get sick and require treatment, they must be removed from the designated cattle,” he says. Cattle must be 100% Angus and designated USDA Natural.
Earning the natural designation extends beyond health to the feed bunk. One ton of Klein's ration includes 800 lbs. of corn, 800 lbs. of peanut hay, about 100 lbs. of cotton gin roughage and about 300 lbs. of corn gluten pellets.
“We grind all the feed in a mixer,” he says, adding the cattle are fed in 5- to 7-acre paddocks to 1,175 to 1,250 lbs. before being harvested and processed at a small local facility.
“Cattle gain about 3 lbs./day and are weighed every 28 days. We also ultrasound them on the 112th day on feed to check for marbling. If needed, we'll carry the cattle to 1,300 lbs. to develop the ideal marbling,” he says.
This program takes information feedback to the next level, beyond obtaining carcass data from the packer. “The information pipeline in this production system is very short and very direct,” Klein says. “If there's any issue whatsoever with a particular carcass — good or bad — I expect to hear about it from Lonestar Food Service.”
In fact, when the first steer was processed by Lonestar, the owner dropped a few steaks off at Klein's home for him to taste. “That doesn't happen when I send my cattle to a feedlot,” he says. “That kind of direct feedback will help us produce an even higher quality product. This program is all about quality.”
Klein says he isn't prejudiced in favor of natural beef. “There are some misconceptions about the use of antibiotics in cattle,” he stresses, agreeing that science proves cattle on an antibiotic or added hormone program don't cause antibiotic resistance for humans who consume the beef. “However, if some consumers want natural beef and are willing to pay for it, if I can raise it, I'll do it. It's a niche in the market that should pay good premiums, especially in today's tight-margin environment.”
The “paying-for-it” aspect is important, he says, because the added premium is needed to facilitate the additional time and management required to feed the calves efficiently.
Local goes national
“Local is hot,” according to the National Restaurant Association's 2010 forecast. Chefs in the association's “what's hot” survey ranked locally sourced meat and seafood, locally grown produce and sustainability as the top-three culinary trends for 2010. That's part of the niche Klein is tapping.
Dawn Thilmany, Colorado State University agricultural economist who specializes in value-added programs, says producers interested in the local movement should take a gradual approach. “You need to test a market,” she says.
She says such an enterprise should be a separate operational entity. “It most likely should be separate from the home ranch and production operation. Then, producers should grow by developing a good partnership, such as a reliable processor.”
Klein had explored the potential for selling locally in the past. “It's been my lifelong dream to sell beef from our ranch to the local market,” he says. “But it hasn't been feasible until now.”
Records are important
Klein's overall program went the CAB route in the early 1990s when CAB's Value Discovery Project (VDP) started. His early results were eye-opening. “I think I sent five head to the (Kansas) feedyard and two of them died,” he remembers. “That's when I learned I needed a VAC (value-added calf) program.”
So he added a VAC-45 preconditioning phase to his operation and saw quick results. “We've participated in VDP all eight years of its existence,” Klein says.
Every sire or dam from Klein's ranch comes from lines with calves that performed well on feed and on the rail. Data include a calf's sire, dam, birth date, CAB tag number, dam's tag number, cow family, feeding in-weight, days on feed, harvest weight, average daily gain (ADG), hot carcass weight, age in days, marbling score, quality grade and back fat. Their thickness, ribeye area, yield grade, CAB status and selling price are also included.
“All our 135-140 females were conceived, born and raised here,” he says. “There are no ‘trader’ cows. We can ensure consistency of herd genetics and have a base cowherd with predictable genetics.”
Klein tracks cow families diligently. Each family has an ID number. “Those 350+ animals we've fed out and collected carcass data on were out of 130 different cows in our herd,” he says. “We use EPDs and ultrasound data in selection, but emphasize actual carcass data, not simply expected carcass traits.”
He started using genetic tracking programs from Merial and Pfizer Animal Health to gain the most data possible from his breeding stock. That, combined with the wealth of data he already has, gives Klein the confidence his calves will perform well in an on-ranch feed-out program and provide the type of beef a fine-dining golf resort restaurant demands.
He's just hoping the program produces premiums that keep him at the top of the leader board.
Larry Stalcup is an Amarillo, TX-based freelance writer.