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Gaining Options

A national beef marketing network that puts tools and connections together, Cargill Animal Nutrition's Beef Options program promises to be a powerful resource.

The name pretty much says it all. Beef Options®. This fully integrated national marketing network, available through Cargill Animal Nutrition, promises to be a powerful new resource for the beef industry.

“This network is designed to help beef producers become aware of the options available with respect to marketing opportunities,” says Bryan McMurry, Minneapolis, MN, beef business manager for Cargill Animal Nutrition. “From beginning to end, it's designed to help producers gain a better perspective on what they produce, and improve their profit potential.”

The heart of the program is a national database with profiles and information on participants from every beef industry segment — cow-calf, stocker, backgrounding and feeding.

Currently about 300 cow-calf operations and more than 100 feedyards across the country are participating in Beef Options. They represent about a half-million head of cattle.

The foundation of Beef Options is the cow-calf operator. Bill Donald, Melville, MT, enrolled in Beef Options last year. He's already seen results from the program.

“Yeah, it gives some great insight into what your calves are worth,” says Donald. “We're very optimistic that it will work for us. It's already helped get us into a premium marketing program.”

Donald says Beef Options begins by looking at all ownership and marketing opportunities — in single or multiple phases.

“This business isn't a matter of just selling calves at weaning anymore — and taking what the buyer offers that day,” he says. “You have to work harder at marketing. This program makes marketing calves a whole lot easier.”

Making Decisions

Through the assistance of a specially trained Beef Options representative, a cow-calf producer's preconditioning and backgrounding options come first.

“Then the decision to maintain ownership is yours — our job is to provide meaningful information to assist in that decision,” explains McMurry. “If the decision is to keep your calves, we can help find a suitable feedyard and, if necessary, even help secure dependable financing.”

Participation allows the producer to keep track of his or her calves throughout the production cycle.

“Beef Options manages and stores the information for the producer on a secure Web site,” explains Lex Gamblin, Boyd, MT, a Beef Options consultant. “This allows us to assist in interpretation and consult on possible adjustments to your production plan.”

The Beef Options specialist assigned to the member will make monthly grazing and feeding inspections.

“This report allows you to evaluate costs and performance at every phase of the program,” says Gamblin. “It can be used to evaluate future direction or change management.”

The Finishing Location

“We're not going to tell you how to sell your cattle, that's your decision,” adds McMurry. “However, we can provide you with quality information to help you decide when to sell them.”

Evaluating and helping the cow-calf or stocker producer select a finishing location is an important function of Beef Options.

Cap Proffitt, Ellinwood, KS, manager of Barton County Feeders, has been a Beef Options feeder for nearly three years. He says the network fits well with his custom feeding operation. He's had calves from as far away as Florida and Montana placed in his pens due to the program.

“It's great exposure for us, especially in a year like this when calves are a little harder to come by,” says Proffitt. “Most years we have the luxury of a waiting list for customers, but it always helps to have a procurement network behind us.”

Proffitt says Beef Options can help get consistent quality cattle into feedyards where they fit the best.

“With all the information generated through the program, it's a great way to find the high-performing calves and get them placed where they can do best and hopefully help bring the most money,” he says.

No Free Lunches

There are no free lunches though. Cargill Animal Nutrition expects to earn the nutrition business of Beef Options participants.

“If you don't recognize the value of the program to the extent you that are compelled to purchase our nutrition services,” says McMurry, “maintaining your membership in Beef Options will be fruitless.”

Members who maintain ownership and enroll calves in the program also pay a fee of $3/calf, with a maximum cost of $1,500/calf crop.

With Beef Options, the producer gets monthly progress and closeout reports on all enrolled cattle.

“We tailor these reports to give you the most pertinent information for whatever production phase your cattle are in,” explains McMurry.

“This is where the rubber meets the road — allowing the producer to begin to establish the current value of the cattle,” adds Gamblin. “And it's where you can start to answer the question of what your calves are worth.”

Cargill's Cow-Calf Alliance

Three years ago, Caprock Industries — the nation's fourth largest cattle feeder — began building a new alliance with cow-calf producers. Sharing Total Added Value (STAV) was designed to supply better quality cattle to Caprock feedlots, which are part of Cargill.

The mechanics are straightforward, says Ben Brophy, manager of value-added alliances for Caprock.

“Through STAV, Caprock promises to provide group and individual feeding and carcass performance data back to the producer,” he says. Same sex groups of approximately 120 head minimum are necessary.

STAV cattle that finish in the top one-third of the total monthly closeout population are paid a percentage of the “total added value.” The cattle must grade a minimum of 40% Choice to qualify.

“Total added value is calculated by adding the feeding value to the plant value,” explains Brophy. “The feeding value is a comparison of actual breakeven to estimated purchase breakeven.”

The estimated breakeven projections come from standard performance values through historical results. They are standardized and objective, rather than subjective. The plant value is the premium or discount relative to a grid with Excel Corp. It is balanced for quality and cutability and the minimization of fallouts.

The STAV alliance program also has agreements and relationships with seedstock producers.

“These partnerships provide the genetic expertise needed to utilize information created on STAV cattle,” says Brophy.

He points out that a cow-calf producer's participation in Cargill's Beef Options program does not require participation in Cargill's STAV program or vice versa.

Beef Options At A Glance

  • A closeout report for every phase of production, summarizing critical performance data and financial information.

  • A local Beef Options representative specially trained in beef cattle production, animal nutrition and industry economics to see that a producer gets the most out of Beef Options and his cattle.

  • Convenient credit services for facilitating loan applications and loan servicing functions.