The next step in value-based marketing?

The next step in value-based marketing?Ranchers who sell calves at weaning generally focus on maternal traits and weaning weights when they select bulls, but many purchase bulls that also excel in traits that pay beyond the ranch such as feedyard gains, feed efficiency and carcass value. From weaning to slaughter, differences in genetics can influence calf value by up to $200 per head. Demonstrating that value to buyers has been difficult though, due to a lack of objective measures of a calf's genetic merit.

Verified Beef aims to change that with their new "Reputation Feeder Cattle" program, which includes a genetic merit scorecard for participants" calves.

During Leachman Cattle of Colorado's pre-sale seminar last week, Verified Beef's Tim Watts outlined the new program. Verified Beef, he says, is partly owned by the Montana Stockgrowers" Association and has certified more than a million cattle since 1999 for age, source and processes under various USDA programs.

Watts began by telling about his family's ranch in Montana. Back in the early 1960s, his grandfather built the herd using top pedigreed Hereford bulls. Before taking bids on his calves each year, he insisted buyers visit the ranch to see the cow herd. He wanted them to recognize the investment he'd made in genetics.

Since then, Watts has been interested in helping ranchers market their calves based on true value, including genetic merit. Feedyards today, he says, need calves that will stay healthy, grow efficiently and produce high-value carcasses at the packer. Several programs help producers document their health programs, but genetic potential is more difficult to prove.

The new Reputation Feeder Calf program will provide buyers with more information on calf value than previously available, Watts says. The program includes documentation of calf-management processes such as weaning, vaccinations and parasite control, age and source verification and the Genetic Merit Scorecard.

Verified Beef worked with geneticists and cattle breeders to develop the scorecard, which provides a single number, in the form of market value per hundredweight, to compare the genetic merit of groups of calves. The value is based on predictions for average daily gain, carcass weight, feed per gain, ribeye area, and USDA Yield and Quality Grades. The prediction works across breeds, and over time, a baseline will be established for comparisons. If, for example, the average score for your region is $10 per hundredweight and your calves earn a score of $14, their genetic merit makes them worth $4 per hundredweight above market average.

To participate, ranchers will provide Verified Beef with information on their cow herd, historical weaning weights and a release to obtain EPDs on their bull batteries over the past 10 years. Verified Beef will obtain the EPDs from seedstock suppliers or breed associations and use them to calculate the Genetic Merit scorecard.

For ranchers who want additional verifications, the company can include its Cattle Care and Handling certification and certification for USDA programs such as, Non-Hormone Treated Cattle (NHTC), Never-Ever3 (natural beef) and Grass Finished cattle.

Prices for certifying calves through the new Reputation Feeder Calf program have not been finalized, but the company expects the price to be reasonable relative to the value of the information it provides.


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