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BEEF Magazine is the source for beef production, management and market news.
January 23, 2013
Markets have become increasingly differentiated at all levels. The result is that producers now have a variety of means to garner additional revenue from their respective management and genetic decisions over time. Those opportunities are best illustrated by data available through Superior Livestock Video Market sales over the period 2001-2010. The graph illustrates calf market premiums and discounts across several major categories (health management and genetics).
The premiums highlighted above are cumulative. That is, producers can be rewarded in the market for both health management and genetics. For example, a producer who invested in a VAC 45 program and possessed documentation for Angus-based loads would have received over $11/cwt in premiums.
That brings us to what’s perhaps the most important takeaway from all of this. The significance of documentation and/or certification to ensure receiving proper compensation in the marketplace can’t be understated. Considering the relatively minimal amount of time and/or effort required to provide documentation, the effort provides an excellent dividend.
Feeder cattle markets have changed, and they’ll likely become even more complex and granular in the future as the industry seeks downstream value attributes and sourcing efficiency. How has your operation adapted to changes in the market and how will you prepare for even further transition down the road?
Leave your thoughts in the comments section below.
Nevil Speer serves as an industry consultant and is based in Bowling Green, KY.
Nevil Speer has extensive experience and involvement with the livestock and food industry including various service and consultation projects spanning such issues as market competition, business and economic implications of agroterrorism, animal identification, assessment of price risk and market volatility on the producer segment, and usage of antibiotics in animal agriculture.
Dr. Speer writes about many aspects regarding agriculture and the food industry with regular contribution to BEEF and Feedstuffs. He’s also written several influential industry white papers dealing with issues such as changing business dynamics in the beef complex, producer decision-making, and country-of-origin labeling.
He serves as a member of the Board of Directors for the National Institute for Animal Agriculture.
Dr. Speer holds both a PhD in Animal Science and a Master’s degree in Business Administration.
Contact him at [email protected].
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