Last fall, the experts said age-and source-verified cattle received a premium of $20-$30/head. Then we saw those premiums dissipate as the Japanese and Korean export markets failed to open or re-closed.
Iowa State University researchers just released a study looking at data from calves that sold from fall 2005 to February 2006; they found the premium was actually $35/head.
While it's easy to document the premiums on grids, etc., for age-verified cattle, there's been a lot of discussion in sale barns this fall that pre-conditioning and age- and source-verification weren't bringing any premiums. But it's difficult to determine premiums while sitting in a sale barn due to all the variables -- differences in weight, condition, quality, breeding, management, and reputation being just a few of them.
As one veteran order buyer said, "There are no premiums, but we all want to buy the preconditioned ones, and they always seem to cost me more." He grinned and added, "If you aren't seeing the premiums you keep hearing about in the marketplace, the problem isn't with the market, it's you have the wrong buyers."
There's a lot of wisdom in his words. The King Ranch Management Institute held a two-day symposium last week on the "Balanced Scorecard" management approach. In the symposium's customer/marketing/customer service section, it was common to hear producers lament they've had the same buyers for years, but aren't being rewarded for their superior genetics, management etc.
I don't doubt they're correct, but I suspect they're putting the blame in the wrong place. Either those buyers don't realize the extra value, in which case we need to provide it; they don't have a system to capture that value, in which case we need to find new buyers; or they haven't had to pay for it, in which case it's our responsibility to create competition between buyers.
-- Troy Marshall