Jared Wareham: Creating More Buyer Competition
Producers want to know, “How do I create more competition for my cattle?” There are several critical factors such as health, head count, evenness and flesh that always matter. Beyond those, I think it has become important to review Process Verified Programs, or PVPs, and their role in cultivating more value add.
All signs point to PVPs as the way of the future. They will affect value as consumer-driven connections evolve.
Pipelines for process verified programs, such as ASV (Age and Source), NHTC (Non-Hormone Treated Cattle), VNB (Verified Natural Beef), Non-GMO and GAP (Global Animal Partnership) continue to expand. As an advantageous supply-demand relationship continues to increase, so will opportunities to capture program-driven premiums. Therefore, producers must analyze requirements to participate and calculate the financial investment in service fees and cost of not using growth promoting technologies.
Qualifying to participate in a PVP is like punching a ticket to access a premium “product claim” verified pipeline. There are specific measures that require verification. PVPs require documentation processes to be completed by a third-party service provider to verify claims, such as Natural. If your cattle meet the product claim requirements, they can flow into those premium beef supply lines.
Unlocking the door to a multitude of PVP supply lines is the key to creating more buyer competition. Cultivate more value with an all-access pass. For example, you buy bulls from seedstock producer “X” that wants to buy your calves back and only requires NHTC claim verification, so that is the only PVP you pay to participate in. Have you unintentionally eliminated other buyers by failing to add on more product claim verifications? Did you leave pipeline access locked?
Your primary marketing strategy should be maximizing buyer competition, regardless of how or where you sell. Never block a potential buyer if additional PVP participation cost benefit is favorable. If the program that has been buying doesn’t require “X” programming, that doesn’t mean you can’t benefit from more “bells and whistles.” Layer on as many value creation PVPs as you can pencil, and let the buyers fight it out.
Will seedstock producer “X” still purchase your cattle if they have extra programming or PVPs that they don’t require? Absolutely! You have simply created access for your cattle to flow into alternative pipelines, which will allow everyone to compete aggressively for them. Similarly, if you’ve traditionally only participated in an owner signed affidavit Natural program, what is the harm in stepping up to a third-party verified Natural program?
Jared Wareham is the North American business development manager for ABS NuEra. He has been involved in the cattle industry for over two decades, in business development roles growing genetics-focused companies that service producers along the beef value chain by driving the integration of precision-based production.
