If your herd genetics are of the quality that other producers are willing to buy for herd improvement, then you have a potential bull market. To create a true breeding bull enterprise, purebred or crossbred animals that are subject to registration with a breed association are desirable. As with any enterprise, marketing skills and a product, that people want, are required to create a market.
Bill Pendergrass with Beefmaster Breeders United discussed ways of creating a bull market during the 2017 Texas A&M Beef Cattle Course. Some of the information in this article was taken from Pendergrass' presentation. Even though the focus was on bulls, Pendergrass offered information on marketing techniques that are applicable to any beef cattle enterprise.
An understanding of how the current market operates and how it will function in the future is important for successful marketing. In today's beef cattle markets, sectors are vertically aligned with the cow-calf producer often selling to a stocker/backgrounding operation. The stocker operation delivers its product to a feedlot and the feedlot markets to the processor. Processors sell to wholesalers and they sell to retailers who sell to consumers. Some producers successively have integrated two or three sectors along the supply chain in an effort to create better returns on their investment. Various market sectors are now learning to communicate with each other and share data to enable the delivery of a value-based product.
The National Cattleman's Beef Association describes value-based marketing as a marketing system that transmits consumer preference for taste and leanness throughout the beef distribution and production chain. Branded beef products have evolved as one of the avenues for marketing value-based products. Companies that market these products have management protocols that their suppliers must follow. Branded products are marketed on taste and leanness and other value-added traits such as hormone and antibiotic-free beef from cattle that consumed only forage. These products meet the consumer's desire for particular attributes for which they are willing to pay a premium price.
During the past 20 years, emphasis was on terminal breeding where the calf crop was sold for beef as heifers and steers. Replacement heifers and bulls were purchased from outside sources. Angus influence increased in herds and efforts were expended toward improving animal production such as calving percentages, birth weights, weaning weights and average daily gain. There was an average increase in weight and size of weaned calves which resulted in bigger carcasses. A considerable improvement has occurred in carcass quality grades and the steady increase of U.S. beef exports resulted in better market prices.
What is going to happen in the next 20 years? Production efficiency will continue as an objective in all market segments. More emphasis will be placed on brood cow quality, maternal traits and planned crossbreeding programs. Sustainability will remain as buying criteria for many consumers and the beef industry will continue efforts to satisfy their demands.
There is definitely a need for bulls in Texas, which is confirmed by the following example presented by Pendergrass. Beef USA Directions 2017 Statistics shows Texas to have 14.1 percent of the U.S. cattle which is 4 million head. At the ratio of 20 cows per bull, 200,000 bulls are needed annually in the state of Texas. If the annual bull replacement rate is 15 percent, 30,000 new bulls are needed every year. Using $5,000 of the average bull price, the annual Texas bull market is $150 million.
Capturing the market
Texas needs bulls which create a market. How do we capture our share? First, we need to identify the market niche where our product fits and the buying characteristics of the customers. Then we must produce a quality product and advertise it effectively.
Know your customers and how they operate. Learn and understand their cull criteria, production environment, annual rainfall, forage base, supplemental feeding strategy and weaknesses. Design the marketing program to show how your product will fit into these situations.
A successful marketer knows the industry. Stay current on industry trends by attending feeder calf/replacement heifer sales, video sales and state and county cattleman association meetings. It is important to understand the type of animals that are wanted by the various market segments. Visit backgrounders, feedyards and processors.
There are continued advances in beef cattle production technology almost daily and it is important to stay abreast of the new developments. Some of the areas to follow are reproductive techniques (artificial insemination, embryo transfers, in vitro fertilization), purebred and commercial applications of genomics, selection indices and feed efficiency data collection methods.
It is also important to stay abreast of changes in the customer base. There is a young set of decision makers on the way. How do we prepare for them? These young people are top tier, successful professionals who are retiring early to take over the ranch due to family progression. They are business people with a lot of market savvy. These people don't know anything about cattle, but they understand business numbers. They are educated on performance data, think outside the box and are technology driven.
Cow-calf producers need to remember that once you start selling young bulls for breeding, you have become a seedstock producer and will be held to a higher set of standards. A herd health plan, written in consultation with a veterinarian that includes vaccination protocols is expected. Buyers will want to see records of dates when cattle are worked and the treatments they received. Breeding soundness exams and trichinosis testing are a must.
Accurate data is essential for selling breeding bulls. Register calves with the appropriate breed association and participate in their whole herd reporting system. Whole herd reporting is a system for registration and performance tracking. The basic concept of beef cattle performance records is to measure genetic differences between animals for traits of economic importance.
Nobody wants to buy ugly bulls, so animals offered for sale should have good eye appeal. They should exhibit structural soundness, good body condition and the ability to locate and successfully breed cows. Breeding bulls for sale need proper conditioning for shipment to reduce hauling stress which allows them to arrive at their new home in good condition.
Once there is a firm understanding of customer purchase motivators, the marketer has to let buyers know their desired product is available. One way to advertise products is to maintain and distribute handouts that list current sales inventory with individual animal performances, expected progeny differences, pedigrees, breeding soundness exam scores and prices. Include key influencers in your distribution such as veterinarians, sale barns, order buyers, video/internet sales representatives and extension personnel. Build a communications network with these people.
Some local newspapers offer a means of advertisement, usually within a 200-mile radius. Other avenues available for advertisement are breed specific commercial publications, regional publications with emphasis on commercial cattle operations, internet and social media. Quality photographs and videos are essential tools for advertising.
Successful marketers know the industry, market and customers. They provide customers with quality products that meet their needs and desires. Marketers reach their customers through reputation, advertisement and third-party influencers.
Photo by Robert Fears
1- There is a need for more bulls in Texas.
Photo by Tom Johnson, Johnson Cattle Marketing at W4 Ranch
2- Bulls for sale should have good eye appeal.
Photo by Robert Fears
3- Keep current on what is being bought by attending sales.
Photo by Robert Fears
4- Keep records of dates when cattle are worked and the treatments they received.