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Value & Accountability

Joyce and George Tice are Red Angus seedstock producers because they like the consistency, reliability and disposition of the breed. But getting their feeder calves - and their customers' Red Angus feeder calves - sold used to be a tough calling.Boones Mill, like the rest of Virginia, is steadfast Angus country, Joyce says. But, cattle feeders shopping for placements, and packers shopping for feds,

Joyce and George Tice are Red Angus seedstock producers because they like the consistency, reliability and disposition of the breed. But getting their feeder calves - and their customers' Red Angus feeder calves - sold used to be a tough calling.

Boones Mill, like the rest of Virginia, is steadfast Angus country, Joyce says. But, cattle feeders shopping for placements, and packers shopping for feds, were overwhelmingly partial to the blacks.

In 1995 when the Red Angus Association of America (RAAA) developed its Feeder Calf Certification Program, the Tices knew their prayers had been answered. "We realized this was how we could certify our Angus genetics to buyers," Joyce says.

Two years ago, she and husband George began to contact commercial users of Red Angus genetics in their area. Working with area Red Angus organizations, they drummed up interest in the calf certification program and organized commingled loads of certified Red Angus calves from commercial producers for the Virginia Tel-O-Auction.

The Tel-O-Auction is a conference call auction program developed by the Virginia Cattlemen's Association to help market feeder calves. It's held each November. The Tices' first organizing effort in 1997 yielded 180 Red Angus calves from 10 producers. To their surprise, their commingled lots topped the sale. In 1998, the Tices organized another 180 calves from 10 producers. Again, the Red Angus calves topped the market.

"The certification assured buyers that the calves were Angus," she says. "The feeders who bought the calves told us they liked the consistency in performance and the disposition. The packers who bought them as fed cattle said they liked their predictability."

Nothing, adds Joyce, "has been as helpful to us in marketing our calves as development of this Red Angus Feeder Calf Certification Program (FCCP)." Focus On The Commercial Segment

It's a sentiment that Bob Hough, RAAA executive director, hears often. It also lies at the heart of the Red Angus mission - a focus on helping the commercial producer. "If the commercial man's not making it, none of the other segments will, either," Hough says.

The RAAA, Hough says, is trying to add value and accountability to the beef marketing system.

"We're an objective-based organization. As you move toward objective-based thinking, toward value-based marketing, then all the segments take responsibility and risk for their segment, and they take responsibility for everyone else downstream. We now have source and genotypic verification all through the program so that people know what they're getting," he adds.

The FCCP builds on a tradition begun in 1954 when the Red Angus breed was founded. The first to require performance information on all its registry's cattle, subsequent years saw Red Angus taking the lead in promoting open and unrestricted A.I., use of performance data in the show ring, promoting crossbreeding and offering an open registry.

In 1994, the RAAA started a Commercial Marketing Program. It offers a wide range of services designed to enhance the profitability of its commercial operators.

In 1995, came Total Herd Reporting. It requires the production of every registered Red Angus female to be accounted for every year, as well as the performance of every Red Angus calf raised through weaning.

But the crown jewel is the Feeder Calf Certification Program. Initiated in 1995, it's the beef industry's first genotypic and source identification program. It's also the first program of its kind to be USDA Process Verified, which certifies a calf's link to the Angus gene pool.

Mark Bradley of USDA's Meat Grading and Certification Branch is in charge of overseeing such programs. He says the Red Angus program is "as good as it gets. "There's excellent traceability in the system, and its traceable to 50% genetics, not a breed characteristic like hide color," Bradley says. "I think the programs that go to a genetic base are the way the industry is going. The phenotypes just don't provide the reliable link to a genetic base that's needed to provide for genetic development in the industry."

Hough says the source and genotypic verification offered in the Red Angus system are the cogs that complete the marketing system wheel. "From seedstock to consumer, everyone can know where the cattle come from," he adds.

A Commitment To Marketing The RAAA has made a big commitment to its commercial marketing program. Besides Hough, the effort includes Ann Holsinger, quality assurance manager, who oversees government compliance; Blake Angell, feeder and fed cattle specialist; and Bilynn Schutte, carcass program coordinator and a master's degree graduate of Oklahoma State's meat science program.

Angell says the FCCP uses an individual serial number tagging system that allows an animal to be tracked from birth to slaughter. It identifies an animal as having Angus genetics and makes the cattle eligible for approved Angus branded beef product lines under the genotypic requirement of USDA's schedule GLA.

To be certified, all calves must be the offspring of a registered Red Angus bull or cow. Upon acceptance, the official Red Angus ear tag - carrying a six-digit serial number assigned to each producer's or feedlot's animals - is provided. The cost is $1.25 per tag.

The serial number is used to follow the animal through feeding and into the packing plant. The number is also used if the producer pays to have individual carcass data collected at the packing plant.

Red Angus-influenced feeder cattle can be enrolled in the program as calves, stockers or in the feedlot, as long as the original source of the cattle is known. Enrollment brings several marketing options for both feeder and fed cattle.

Feeder Cattle Options * "Weekly Feeder-Fax" is a a program available for cow/calf producers to list their load lots for sale. A full description of the cattle is faxed out weekly to buyers with an expressed interest in purchasing Red Angus feeder cattle. The Feeder-Fax also includes dates of any Red Angus feeder cattle consigned on a video auction or to be sold in a sale barn.

* Since 1995, the RAAA has worked with Superior Auction, a video auction company, by identifying Red Angus lots selling through their sales. In addition, two special Red Angus sections are included in the summer and fall.

* Certified Red Angus feeder calf sales, initiated in 1996, are regional and state-sponsored sales. The national association assists state and regional associations in organizing these as part of regular feeder calf sales in sale barns across the country.

* Retained ownership assistance. The RAAA's Commercial Marketing Department provides assistance in placing retained ownership Red Angus cattle into feedyards.

Fed Cattle Marketing Options In 1995, the RAAA negotiated with Monfort what was thought to be the first value-based grid offered by a breed association. The cattle were processed to supply Supreme Angus Beef. Since that time, the RAAA has moved its primary program to Excel. The current pricing system is tied to three branded programs.

* Because of the program's USDA Process Verified status, all the cattle are eligible for Excel's two premium USDA Choice branded beef product lines - Angus Pride and Sterling Silver. The cattle can be priced using the value-based Red Angus Marketing Agreement, cash bid or contract basis through three Excel plants.

The Red Angus Marketing Agreement is reserved solely for certified Red Angus cattle. Cattle that meet specs for Choice, Angus Pride, Sterling Silver and Prime receive quality grade premiums. Premiums are also paid for Yield Grade (YG) 1 and 2.

Discounts are applied to cattle that grade Select or lower; YG 4 or higher; carcass weights outside the window of 550-950 lbs.; and dark cutters, hard bones, stags, etc. Individual carcass data can be collected at a reduced fee, while carcass data on an entire pen is collected at no charge.

* Excel also uses the cattle to supply its Certified Angus Beef program (when the cattle happen to be 51% black hided).

* In addition, the RAAA maintains active USDA-audited Product Quality Control programs with two smaller plants in the East to supply Supreme Angus Beef, Imperial Angus Beef and Premium Gold Angus. The program also provides product for Coleman Natural Beef's Natural Angus line.

Accountability Through The Chain Ron Bieber, wife Lois and son Craig operate a purebred Red Angus herd near Leola, SD. The last few years, he's also fed 300-400 head of certified Red Angus each year, a combination of his own and customer calves that he's bought back.

"We do it mainly to get carcass data for ourselves and our customers," Bieber says. "It's a way to improve the accuracies on our bulls, but we also use it to show our customers who sell their cattle as weaned calves just how their cattle are doing and where they are in terms of reaching their goals."

Bieber says that after selling his cattle on a number of grids, he's found the Red Angus grid to be superior. "Feeding cattle really gives you insight. In times like these with tighter feedlot margins, the extra charges for carcass data retrieval, ultrasound, etc., charged by some programs can quickly eat up the profits.

"The Red Angus grid is genotype based, which really puts pressure on the breeders to produce the bulls that can cover all phases of the industry - from the cow on the range with good maternal traits to an acceptable carcass on the end," Bieber says.

Hough says the value of the program is seen in the increased demand for Red Angus genetics that the source-verified program brings. Breed registrations worldwide are on a steep growth curve, and FCCP enrollments grew by 50% last year and are expected to grow another 25% in 1999 to 80,000 head.

"What we're seeing out there is good Red calves selling along with really good calves, period. The calves are selling better and that's all we can ask for. On the fed side, we've been in the $10-12 average premium range over base price for years," Hough says.

"Our program allows users of Red Angus genetics to enter into a wide range of marketing opportunities. We're giving producers more options and more value for their cattle. People want high-quality Angus genetics in the beef system and we're identifying it so they know they're getting what they want," Hough says.

For more information on Red Angus programs, call 940/387-3502.