February 18, 2000

It seems the messages on the importance of cattle uniformity and the trend toward beef alliances are becoming equally uniform. During the Texas Farm Bureau Leadership Conference earlier this month, beef producers once again heard the reasons why.

"Retailers, and their interest in the production end, is the single greatest change in our industry in 20 years," said Dr. Bill Mies, a professor in Texas A &M University’s Animal Science Department. "They have become a partner, and they are paying attention to what we’re doing in our industry. Genetics, production practices, the feeding end, cost-to-gain....they know about these things. They understand what it takes to get quality and uniformity of cuts, and they’re beginning to make the supply chain give them what they really want."

Obviously, genetics are a good starting point for achieving uniformity. However, using external fat thickness and breed type as tools to predict quality grade, is still, at best, an inexact science. There are other important considerations affecting meat quality. For example, Mies noted that while nervousness in cattle is an inherited characteristic that can result in dark cutters, rough handling of cattle of any breed in the days prior to slaughter can lead to the same problem. How and where cattle receive injections is also important. So, said Mies, management plays a big role in delivering meat of a suitable quality.

Good management can also result in more uniformity. Mies said one of the most common mistakes is allowing steers to get too heavy. He suggested the mentality of putting on as many pounds as possible on cattle that work in a particular environment and/or meet a personal preference is something producers must change. Instead, said Mies, the grower needs to be thinking in terms of the size of that ribeye.

Mies reminded producers who may be wondering how their cattle are actually performing that the Ranch-to-Rail Program is one way to find out.

"Ranch to Rail is not rocket science. It’s soil testing. You pull a sample, send it in and see what you need to do or what you need to change to be more productive," he said.

Mies is convinced alliances, or industry partnerships, are perhaps a way to "even out the bumps in the road" in terms of producer income.

"It’s a way to move production farther up the production chain, to share in the profits and the risks," he said.

Producing for an alliance is another way to achieve uniformity, he added. Sharing from his personal experience as part of the TAMU team from the cow/calf end, participating in an a three-way alliance with a feedyard and a packer, Mies reported, "We ended up with a narrower, much more consistent product. We were not changing genetics. It was all because of the way we bought them, managed them, and slaughtered them. Our cattle had half the variation of the industry."

According to Mies, the first thing an alliance does, is it buys cattle from the sale barn, sorts, and backgrounds them.

"In our alliance, we realized how important it was to train the buyers working the sale. It wasn’t hard to get them to stop buying poor cattle. Trying to train them to pass on excellence, when it doesn’t fit the order, or specifications, was the tough one. This participation resulted in an excellent flow of information. It changes your perspective," he said, noting that data from the feedyard, packer and boxed beef allows the producer to look at the bottom line to see if he made money and how.

Mies said the TAMU team realized a 15 to 20 percent increase in profits via alliance profit sharing.

"It’s good most of the time. It takes the peaks and valleys out. You don’t get 60 cents for your calves one year and a dollar the next," he said. "Still, I would encourage you to use it for one or two years to decide if you really like it. The good thing about an alliance compared to forward contracting is it offers you more different combinations of contracts and a longer cycle than a seven-month cycle. An alliance provides a greater variety of risk magnagement tools and more time to employ them."

Mies said there is a "dark side" to the alliance, which is a big hurdle for many producers.