Angus at Work

How Do Angus Commercial Programs Work for You?

July 27, 2022 Angus Beef Bulletin Season 1 Episode 13
Angus at Work
How Do Angus Commercial Programs Work for You?
Show Notes Transcript

Foster profitability of commercial cattle producers is one of the five core pillars of the American Angus Association's long-range objectives. How does it do that? Kasey and ABB summer intern Lindsey Sawin chatted with Ginette Gottswiller and Troy Marshall about all the ways the Association's Commercial Programs Department works for commercial cattlemen.

Learn more in the Angus Beef Bulletin's Feeder-Calf Marketing Guide.

You can read both Ginette's (The Link) and Troy's (Market Closeout) respective columns on the Angus Beef Bulletin EXTRA's marketing tab. 

Kasey Brown (00:05):

Angus at Work, a podcast for the profit-minded cattleman, brought to you by the Angus Beef Bulletin. We have news and information on health, nutrition, marketing, genetics, and management. So let's get to work, shall we?

            Hello and welcome back. This is Angus at Work. I am your host, Kasey Brown, and I am joined by an additional host today. I am excited to introduce you guys to our intern, Lindsey. Lindsey, tell us a little bit about yourself.

Lindsey Sawin (00:32):

Like Kasey said, I am Lindsey Sawin. I am an agricultural media and communication major at West Texas A&M University. I am heavily involved in the agriculture department at WT. I am an ACT officer, as well as an agricultural ambassador, and I also work for the department. And I'm super excited to be here at the Beef Bulletin this summer and get to learn from Kasey and all the others. And I'm just really excited to be a part of the podcast today.

Kasey Brown (01:00):

All right. So today's episode, we are going to talk about how the American Angus Association, how one of our five pillars of our long-range objectives is to foster profitability for commercial cattle producers. And that is a really big part of what we do at 3201 Frederick, here in St. Joe. And so today, we're going to talk to our commercial programs, Troy Marshall and Ginette Gottswiller. Hello, welcome. Thanks for being here today. Tell us a little bit about your backgrounds in the beef industry.

Troy Marshall (01:35):

This is Troy Marshall. I'm the director of commercial industry relations with American Angus, and I've had a circuitous route to get here. I started off at CattleFax, and I worked for actually some other breed associations along the way. My wife and I, we ranched in Eastern Colorado for about 25 years prior to coming to the American Angus Association.

Ginette Gottswiller (01:57):

Well, Troy, if you had a strange way, I guess I did too, because I am still doing a little bit of... I'll say farming here in Missouri. This is Ginette Gottswiller, and I actually started out working for the Association approximately 30 years ago in Angus Journal and media and selling some advertising, and have transitioned over to the Association. The latest title is director of verification services, because I sure enjoy working with those commercial cattlemen.

Kasey Brown (02:27):

Give us an overview of how the Association's commercial programs work for commercial cattlemen.

Troy Marshall (02:33):

That's a good question. And really, it just boils down to we're trying to put more profits in their pockets, and we do that by giving them the opportunity to describe their genetics and management in their cattle, and hopefully where they can receive some premiums and really leverage the value of those genetics and their superior management they're putting into their cattle.

Ginette Gottswiller (02:52):

Troy, you did a great job of analyzing that. And I guess the only thing I'm going to add about that is, as we move forward and especially in today's market, we start looking at those bottom lines. And at the end of the day, we've got to try to help keep most of our or all of our commercial cattlemen, if we will, in the black, because it's getting tougher and tougher every day to make that happen. And so therefore, commercial programs is the department that's going to try to help those guys stay in the black, as Troy said, with genetics and also with these verification programs. Because the thing of it is, it's harder and harder to get more acreage, but we can sure make the cattle that are on that acreage worth more money.

Kasey Brown (03:39):

That's a great point. Tell us... Commercial programs is a big deal. We have a lot of people who work on this. How big is the department? How many people are working on that here at the Association?

Ginette Gottswiller (03:52):

Well, we're really blessed with that 13 regional manager team, who also helps out and does on-site reviews and are out there marketing that every day, as well as our Board of Directors and every other entity and person within 3201. Because everybody knows that at the end of the day, in order for our seedstock producers to stay in business, they need to sell more bulls. But if we're going to get down to the commercial programs department, obviously Troy and I are here, and then we have a team of two part-time people, as well as two full-time people within just this department. So, we're supported well by the Association and appreciate each and every one of those members who do that.

Kasey Brown (04:37):

One of the best things I've heard from commercial programs or for commercial cattlemen is that they get to talk to the same person every time. So when they call into the association, what are they calling about? That's probably about AngusLink. Tell us a little bit about AngusLink and how that helps commercial cattlemen.

Ginette Gottswiller (04:55):

You're exactly right, Kasey. I'll just say one of the great things about our staff is that each and every one of those have definitely been in the cattle business. And most of them, every one still have cattle today. So we try very hard to match up the administrator, as we call them, with the producer, because we all know that there's different types of people and some that work faster than others. So we try to match that together, as well as that location, if you will. Because people in the West may ranch just a touch different than people in the East, and so we try to match up those people. And like you said, that way you're working with the same person year over year.

            And the other thing is that enrollment process, because we are a USDA program, needs to be very similar from Maine to California. So we do have to check the same boxes, but there are different ways to go about that, to make that enrollment easy for that producer.

            And I guess I'd like to interject here real quick, there's a little bit of a misconception when you start talking about a USDA program. Gosh darn, that's going to be really difficult to enroll in or whatever. And it's not. You've got an on-site review with a regional manager or a contract auditor that's more like a herd visit. You've got an enrollment form with somebody who probably loves cattle every bit as much as you do. So, it's your opportunity to brag about your operation and paint a picture of just exactly what you're doing, because every one of you are doing it, just what you need to do. You're probably keeping those records that you need to keep. We just need to have a copy of them and do that enrollment and training with you. And just think, you get to brag for about 30 minutes about just how great your operation is.

Kasey Brown (06:48):

So we're talking about the claims within AngusLink. Tell us the overview of what those are for those audits.

Ginette Gottswiller (06:57):

So, great question. And one of the things just to go at the base level, everybody's going to enroll in age and source. When we rewrote AngusLink here a few years ago, we took it so that all the claims were an add-on. And again, if you've heard any of our talks out in the country, it looks like a pickup, and you get to choose what you put on it. And that's exactly right, because everybody likes different things, and their management style may dictate those different claims. So agent source would be the base claim.

            Of course, if you're using all registered and 100% transferred Angus bulls, you can enroll in the Angus Verified claim, which is free. If you choose to have maybe another breed of bull on the place, or mostly Angus, the GMS or genetic merit scores I know that Troy's going to talk about in depth here is an option, because we are able to score calves that are not out of 100% registered sires and use that as a benchmark tool, or use that as a marketing tool for you.

            Then we also have a Non-Hormone Treated Cattle program, or we like to refer to that as NHTC. Again, no hormones, so I think that very much speaks for itself, as well as you can do an all-natural program. So we have lots of things to choose from, as well as a cattle care and handling claim that's going to mean that you're BQA certified. And then of course, we have a health program that we call Calf Management. We also are in the process of working on some additional claims that will be rolled out, hopefully here within the next couple of months. So, we're always upgrading the program and keeping up with the market trends. And of course, what feeders, packers, and consumers are needing.

Lindsey Sawin (09:04):

So AngusLink does a really good job of helping commercial cattlemen set themselves apart. What are some of the other services that commercial programs offers to commercial cattlemen?

Troy Marshall (09:15):

That's a good question, Lindsey. I think one of the biggest things is that we're really providing too, for the seedstock producers, an opportunity to use the programs as a customer service tool. So they can build relationships with their customers, help them market those cattle. And actually, service is a conduit to build those relationships. So we also work with all the supply chains and any of that out there, just trying to promote our Angus genetics work in the commercial segment. And we actually served, Ginette and I, too as a sounding board back to the Angus Board and the Angus Association of what's happening in the commercial side of the business.

Kasey Brown (09:56):

Ginette, you mentioned the genetic score card. Troy, can you explain that? And how does that tie into how commercial programs is working for commercial cattlemen?

Troy Marshall (10:05):

Well, always one of the most frustrating things about marketing feeder cattle's just been our commodity system, where we know that we're doing things right, and we are putting the right genetics, but do we get paid for it? We've heard that reputation cattle are out there, but the problem with reputation cattle is it was just really hard to... Not very many people knew of your reputation.

            And so, what the Genetic Merit Scorecard was just created to provide an objective, reliable way of describing the genetics in a pen of feeder cattle. And I like to say we're... It's not a perfect analogy, but we're really almost creating a set of EPDs for that pen. And we describe the cattle for how they do in the feedlot, on the grid, and also just an overall beef score is what we... Which combines the feedlot and grid components.

            And so with those three scores, the buyer, the feeder has opportunity to know what those cattle are made up genetically and how they should perform. And we're really excited that we're actually putting genetics into the pricing equation for feeder cattle for the first time.

Kasey Brown (11:08):

How do you ensure the validity of those numbers? What goes into that?

Troy Marshall (11:12):

Well, thankfully, the one thing the American Angus Association does really well, and that's described genetics. And so there's a lot of people that have faith in the Association. We have the world's largest database that we built those off of. And with all our national genetic evaluation and genomics and all that go into creating those EPDs and genetic numbers for the herd bulls.

            And that's what we do. We just look at the herd bulls and the historical herd bull inventory to create those numbers, that breed composition of those cow herd. And I think one of the exciting things with the genetic side is that the buyers have now got an appreciation for what those genetics will do, and we've been able to validate that. We have about 125,000 head now in our database, and it shows that we actually do a really good job of predicting how those cattle are going to perform.

Kasey Brown (12:01):

That's awesome. So you said... That's a large number of cattle we've got in this database. Tell us some of the benefits that these cattle and these ranchers have seen from our programs.

Troy Marshall (12:13):

Well, and the most obvious one that we're always focused on is dollars. And over the last three years, the people enrolled in AngusLink program have received about $12.4 million in premiums over the marketplace over the last three years. And to give you an idea, last year in the video sales, we were just a little over $13 per hundredweight. So that's $80, $85 per head. Been a pretty good return on investment there. And it, of course, depends on the program, and we see those vary from time to time. Usually, there's a hierarchy where NHTC, like last year, averaged around $13 if they had the scorecard. And that goes up to the GAP bundle, where they're getting about $18 per hundredweight. But we've seen pretty significant premiums in the marketplace.

            COVID too changed things, just because... And that's one of the exciting things about all the USDA programs, is that for the first time, we had to worry about market access and just having market. And that flexibility for the buyers, they've really enjoyed that premium.

Kasey Brown (13:20):

AngusLink was first AngusSource. It's gone through some growing pains. How do we explain to producers what it is, how is it the same or different from what it was, and why they should use it now?

Ginette Gottswiller (13:34):

Well, Kasey, you're exactly right. There was. But I'm going to focus on what it is today, I guess, more than anything, because while we've came full circle with many things today, AngusLink is a program that is easy for producers to enroll in. As I've said before, as Troy mentioned, it's a great way for seedstock producers to provide some customer service tools to their buyers. And it's a great way, as we're looking at this generational shift for these calves that are in the marketplace to have more market access. Because one of the things that we've seen, as we've started to move into the sale barn arena and do some calves with some age and source and some of those genetic merit scores, is those calves may have always went to that same buyer.

            And we've been able through that marketing document to list those calves on that site and get a few more bidders at each of those sale barns, which has opened up those doors for these producers who are using these programs to maybe go to some unique locations or some different locations that they've never had.

            And so, I guess for me right now, that's probably the most exciting thing for this program is to open more market access, getting more bidders to utilize these great Angus genetics. We all know that Angus has about that 70% market share. While we don't want to seem like we're trying to take over the world if you will, but we also know that those calves gain and grade really well, that these producers are looking at more market access. We're also seeing that feedyards are looking, so that they also can try to buy these better calves.

Kasey Brown (15:30):

Excellent. Lindsey, do you have any questions?

Lindsey Sawin (15:33):

We've talked a lot about how AngusLink helps producers put a little more money in their pocket. Is there anything else that it does to help set them apart from other producers or anything of that nature?

Ginette Gottswiller (15:46):

I think you probably hit the nail on the head there, Lindsey, because this does help set you apart. One, you're coming to market with a calf that has an EID tag that several of these feedyards are going to use every day for identification, which is obviously awesome. But you're also coming to market with a verification certificate, and it's showing that you are really proud of your calves, that you have done some other management things to really set those apart.

            While I'm not saying other people aren't doing those things, they're not going through the motions of adding that extra value by enrolling in a program. And if you're a buyer there on the seats, and you see these marketing documents come across on that email, and you've got time to look at that and study those genetics and what you've done to those calves, versus just that calf running through there for that 90 seconds on that sale ring, it sure makes a difference if you've got time to study that.

            And that's where I think, at the end of the day, this program really helps set them apart. They're just not black-hided cattle. They're cattle that have a program behind them. They're cattle that have a seedstock producer behind them. They are cattle that are out there to help make more money. So, that's where I think it really sets them apart.

Lindsey Sawin (17:06):

Awesome. And then you guys talk a lot about working with video sales and things of that nature, so tell us a little bit what that looks like.

Ginette Gottswiller (17:15):

So most of these video sales, as well as sale barns, are going to have reps out there, but obviously, video sales have a large number of representatives. And so, they're going out in the country to try to get more and more of those calves enrolled, and they work every day with these producers. And that's why we really value those relationships as well with each of our video sale companies, because those reps are also carrying the water, if you will, for us, because they realize that there's additional value to set those caves apart.

            And so when we get there those days, and just like today, I just had a request from one of those reps, "Hey, send me those genetic merit scores, so I can write that up." They also help try to market those calves, if you will, because they're contacted by different people too, to say, "Hey, I'm looking for X or Y or Z in that combination." And so, if they're able to give those potential buyers a pretty good list of those calves that are really going to work for them, that's very advantageous on sale day.

            And so again, we work very much with those reps prior to and even after the sale, because they've got to come pick up those calves on the ranch, if you will. And so, we're providing those shipping documents and marketing certificates and things that are going on to the feedlots. So again, we try to get back to those people again very quickly.

            That's the one thing, I guess... Again, I don't mean to brag about our program, but we have very quick turnaround. We're very sensitive to the producer's time, as well as the rep's time that it takes to do these enrollments. And so, we're very cognizant of that and try to make the program flow as easy as we can, but yet making sure that we do everything to get that accomplished. And again, we are one of the only programs that does provide that online marketing assistance, and I think that truly is what sets us apart.

Troy Marshall (19:12):

Well said, Ginette. I'll just follow up with that, too. I think we're helping commercial cattlemen not only differentiate their product, but also to create more value in the long term. And I think part of that's by benchmarking where they're at, knowing where they are relative to the rest of the industry, and keeping them appraised of trends and economic drivers that are happening in the marketplace. And I think one of the things that separates American Angus Association is we're created by cattlemen, for cattleman. We're a nonprofit organization. And really, the only way we manage or measure our profits or success is by making commercial cattlemen more successful.

Kasey Brown (19:49):

Excellent. Let's talk more about some of those benchmarks, because that's one thing that seedstock producers can use with their EPDs or with their record keeping, but commercial cattlemen generally haven't had as much access to. Let's talk about how the genetic merit scorecard can help with that.

Troy Marshall (20:09):

And the scorecard's different than EPDs, where it's an index. And so, 100 is industry average, so it makes it very pretty simple to do that. So if you have a square of 100, like in our database, roughly, that means you're going to be running about 36%, 38% CAB, 6% to 8% Prime, that sort of thing. If you're at 125, you're 25% above average.

            And over time, as you get your scores from year to year, you can see if you're gaining relative to the rest of the industry or if you're actually losing ground, and if you're above average. Now we actually, we don't have very many producers because we tend to have progressive ones that are signing up. But if you are below average, that's a pretty good sign that maybe we need to look at why that score is where it's at and what we can do to raise that over time.

Kasey Brown (20:56):

One thing you mentioned that just hit me differently, we know commercial cattlemen do their homework when they're buying bulls. They do their homework... But this is the first time I've heard about buyers do their homework too, or maybe it's just not something we talk about as much. And it feels like these programs help buyers do their homework and find the cattle they need.

Troy Marshall (21:15):

It is amazing how much genetics impact profitability for the feedyards. Right now, when we went from $4 to $8 corn, cost of gains went from 70 to 80 cents, a 10%, 14% difference in feed conversion on average calf is now another $100 or more from the bottom line. You look at carcass weight, another 50 pounds of carcass weight. And then we always talk about quality grade and the value of Choice and Select, and we've actually seen the CAB to Choice and the Prime to Choice premiums increase this summer. And again, with the current economics with higher corn, that's going to even grow. So the value of genetics become actually more important in this time of high input costs. And the feeders out there are actually getting very sophisticated with their databases and collecting information, and they've really learned the value of genetics. They want to know and characterize those cattle.

Ginette Gottswiller (22:10):

Troy, and that was a great, great thing about feeders are analyzing those cattle more, because they're also analyzing their buyers more too. Because if those buyers aren't bringing them quality cattle that are bringing more money, or maybe you're costing them money, or if cattle are actually misrepresented to those buyers, it's an easy way for them to figure that out because of all the data today.

            And so as you said, Kasey, you don't think about that buyer end, but that's one of the reasons I think that buyers like these programs so well, is because it is easily traceable, not that people can't figure that out. But on the other hand is you're probably, when you are having an on-site review or you're having stuff documented, you're probably going to make sure all the T's are crossed and the I's dotted. And that gives, again, additional confidence to those buyers.

Kasey Brown (23:06):

Excellent. What haven't we asked you about that you want commercial cattlemen to know about either AngusLink, Genetic Merit Scorecard, or other things that we do here in the commercial programs department?

Ginette Gottswiller (23:20):

Well, I know we've hit upon many of those things, but again, I guess I'm just going to bullet point it. One, these programs are easy to enroll in. Two, there are premiums associated with these programs, but I will throw this out here, if you have poor-quality cattle enrolling in a program, it's not going to make them better. So, if you are doing all the things that you need to do, it obviously just highlights it even more greatly as you get ready to sell those calves. Number three, I know Troy really hit upon this, but it gives you that opportunity to benchmark and to learn more and to actually become even better when you go to buy your bulls from your seed stock producer.

            I know your seedstock producer is probably definitely leading you down the correct road, but it's going to give you a more meaningful and in depth conversation with him. And he's going to learn more about where you're wanting to go. Because unfortunately, that poor guy doesn't have a crystal ball anymore than I do. And you really need to work with him in tandem to accomplish your goals. So I guess that's the one thing I guess I would like to point out to our commercial guys, is work with your seedstock producers, help them understand where you're going, so that you both can travel that road together and find success.

Troy Marshall (24:42):

I think it's an exciting time in the industry. The value of genetics and the opportunity to differentiate your product in the marketplace is growing, and it's also highly competitive. And really, just the AngusLink program is here to help producers document the good news and what they're already doing right and hopefully get paid for it.

Kasey Brown (25:02):

That's a great way to hit that. A lot of it's about relationships and providing the information those relationships need. We all know that the cattle business is really a people business, so I like to end my podcast on something good as we wrap up. So if you guys would share —both of you, and Lindsey, you too, you can do it too — share something good that's happened to you either personally, professionally, or both.

Ginette Gottswiller (25:24):

Well, I'm going to say yesterday at the Corn Belt Classic video sale, prices were really good for program cattle. So I'm going to say it was a really good day, because as we start off this summer video sales season, it's always a concern of, okay, how are things going to go? And when you get off on the right note, I'll tell you, it can only go up from there.

Troy Marshall (25:48):

Well, I guess from an industry standpoint, I'd say the most exciting thing for me is we're going into a period of historically tight supplies with historically strong demand, and that's a pretty good combination. And from personal note, I guess the big thing in our life... We had our three kids get out into the real world, and they're all gainfully employed and doing well. So excited about that.

Kasey Brown (26:11):

All right. Well done. Lindsey, your turn.

Lindsey Sawin (26:14):

Well, I would have to say that my time here at the Angus Beef Bulletin so far this summer has been my great news. I've had a lot of fun. I've gotten to travel and visit a few different places so far, and starting my first story this week and going through the pictures and got to conduct the interview yesterday. So I'm really excited to see what else I get to do this summer.

Kasey Brown (26:37):

All right. Well, listeners, thank you for listening. If you want to find out more about our commercial programs department, check out both Troy's and Ginette's columns in our Angus Beef Bulletin EXTRA. They're both on the marketing page. You can find that at angusbeefbulletin.com/extra, and then the marketing tab at the top. If you want to call and ask more questions or want more information about enrolling, feel free to call the association at (816) 383-5100. Thanks for your time, and this has been Angus at Work.