Transcript 2010 K State Beef Conference Value Optimization Mark Harmon

2010 K State Beef Conference
Value Optimization
Mark Harmon
Joplin Regional Stockyards, Inc.
Our facility has in excess of 300,000 square
feet (10 acres) of area under roof and 23
outside traps, for a capacity of 7000 Head
inside and out prior to starting sale.
• The primary market of JRS consists of
33 counties in Missouri, Kansas,
Oklahoma and Arkansas.
• In this market there are 2,100,000 total
head of cattle with 900,000 of this
number being beef cows (based on the
last USDA statistics)
• On a normal feeder cattle sale, we will have
approximately 500 consignors with an
average head count of 12 to 400 animals per
seller.
• In 2009, we sold in excess of 435,000 cattle
and are on target to sell 475,000 in 2010.
• We also have a weekly Video Sale selling
from 4000 to 12,000 head for producers in 8
states.
• We’re located at GROUND ZERO !!!!!!!!!!!!!!
Order Buyers !!!!!!
• Order buyers are looking for large numbers of
cattle, that can be put into load lots.
• Pen space availability in feed yards, starter
yards, grazing conditions or short term back
grounding facilities, and the time of year will
determine their choice.
• Most major feed yards are looking for cattle
weekly. And need a good source of quality cattle
in numbers.
• Depending on time of year. Most buyers are
looking for cattle with good genetics, weaned
and processed and that have “survivability”.
• Cattle with a good compensatory gain will be in
high demand just for the condition they’re selling
in at the time.
• A lot of cattle are purchased, that are seen as
cattle that are upgradeable, that might have
been missed managed.
• Several buyers are local that have grass to
graze and feedstuff. They will buy cattle, get
them started and sell through our video sale,
using this as their risk management program.
• Buyers always have a great interest in cattle that are sold
through special value added and preconditioned sales.
Where Source and Process verification along with Age
and Source Validation can be verified.
• During the heavy fall runs buyers are looking for calves
that are weaned and processed. Trying to stay away from
the cattle that are considered HIGH risk, unless they’re
set up to handle them and can buy the cattle in a price
range that fits.
• Cattle that are purchased in early spring for grazing the
Flint Hills or other areas, can be in very high demand.
These cattle fit a certain weight range. Sometimes it
seems price is overlooked and quantity is the purchasing
point.
• Yearling buyers are always interested in these cattle
based off the Board of Trade, freight, cost of gain and
when they can be sold for harvest.
Creating your own Value
1. Things to think about in these uncertain
times in the cattle business.
2. Don’t be Afraid to Stand Alone!
3. Always place your product in the best
possible marketing position available.
4. Consider things to differentiate yourself
and your product from the norm.
Added Value in Higher Markets
• The more calves are worth, the more preconditioning pays
– Many practice the opposite
• How can that be?
– If feed cost stays the same
– And calf prices rise
• Each pound gained creates higher profit
How I went from this on August 23,
2009
To This in Just 9 month and 24
days.
Adding Value with Weaning & A/S
1. Knowing all of your input cost and what
that means and selling in the right
market.
2. Understanding why a complete vaccine
& nutrition program along with age &
source verification pays, and how the
value offsets the cost
Adding Value By Weaning
Utilizing MFA Health Track
Feed & Age & Source Program
April 23 total weight on 64 head = 33,685 lbs
May 3, 2010 ~ Monday Sale @ JRS from USDA
Market Service
Showing a 4% shrink from 1st weight 32,382
Average weight - 504 – Average price $122.50
Average dollar amount per head $ 617.00
Valued Added Sale June 24th, 2010
• June 24 total weight on 64 head = 41,780 Avg #
- 653 – Avg price $119.45
• Average price per head $ 780.00
• Total weight gained 8095 lbs. from April 23rd to
June 24th, total 63 days.
• Total Cost – feed-vaccines-tags-mineral-labor-fly
control total - $4144.22
• Total per head $64.75 – COG $0.51 • Difference for Age / Source / Process Verified
• $95.21 per head
Just Remember
Animal ID is not traceability
ID merely enables traceability,
which makes
Source-Age-Process Verification
Possible
Remember !!!!!!!
• If you don’t have it identified
• And don’t measure it
• You can’t manage it
• It’s not always price per
pound but the amount of the
CHECK !!!
REFLECTING ON LIFE
• Have you ever noticed… anybody
going slower than you is an idiot.
• And anyone going faster is a
maniac.
• As the Population Grows Everyday
• The Cow Herds Shrink Everyday
• It’s the Greatest Time In Your Life
to be in the CATTLE BUSINESS
BEEF
It’s What’s for
Dinner
Thank
You