How can you get better prices for your feeder calves? Hear directly from cattle buyer Don Graham with Crossroads Cattle Co., what he looks for, what his customers need and ways you can set your calves up for success. The American Angus Association's Troy Marshall gives insight on how verification programs help give more valuable information to cattle buyers, and ways to set up your marketing plan.
Find more information to getting the best prices for your calves in the Angus Beef Bulletin's Feeder-Calf Marketing Guide.
Check out our sister podcast The Angus Conversation put on the by the Angus Journal, anywhere you like to listen to podcasts.
Find more information to make Angus work for you in the Angus Beef Bulletin and ABB EXTRA. Make sure you're subscribed! Sign up here to the print Angus Beef Bulletin and the digital Angus Beef Bulletin EXTRA. Have questions or comments? We'd love to hear from you! Contact our team at abbeditorial@angus.org.
How can you get better prices for your feeder calves? Hear directly from cattle buyer Don Graham with Crossroads Cattle Co., what he looks for, what his customers need and ways you can set your calves up for success. The American Angus Association's Troy Marshall gives insight on how verification programs help give more valuable information to cattle buyers, and ways to set up your marketing plan.
Find more information to getting the best prices for your calves in the Angus Beef Bulletin's Feeder-Calf Marketing Guide.
Check out our sister podcast The Angus Conversation put on the by the Angus Journal, anywhere you like to listen to podcasts.
Find more information to make Angus work for you in the Angus Beef Bulletin and ABB EXTRA. Make sure you're subscribed! Sign up here to the print Angus Beef Bulletin and the digital Angus Beef Bulletin EXTRA. Have questions or comments? We'd love to hear from you! Contact our team at abbeditorial@angus.org.
Hello, welcome to Angus at Work. I am your host, Kasey Brown. Thank you for joining us today. Today we're going to talk about feeder calf marketing. We all want better prices for our cattle, but what do we need to do as cow-calf producers beforehand to make those calves work the best throughout the whole system? I am joined today by Don Graham and Troy Marshall. Hello, guys. Thank you for joining me today.
Don Graham:
Hello. Thanks for having us.
Kasey Brown:
All right. Don, can you give us just a quick background of what's your background in the beef industry?
Don Graham:
Well, I'm with Crossroads Cattle Company out of Austin, Texas, is where we're headquartered. We basically cover nationwide, but last year sourced cattle out of 42 states. We don't get up in New England country. We're a broker dealer so we forward contract as far as the board goes out. We offer that advantage if you want it. The basis is too wide now to be doing that, but there's times that it works very well. We buy 95% of our cattle are country trade. We do source a fair number of calves mainly, not feeder cattle, but calves in the barns. Specifically for myself, it's northern Missouri, Nebraska, South Dakota, North Dakota. We have another man in the country, Terrell, that covers basically the West, Montana, Wyoming, all that area. And then we source those calves to go to wheat or grass and then we buy them back as yearlings to go to our feedyard customers. It's kind of a rotating. Weather tells a big story as far what next year's going to be like. But that's basically what we do.
Kasey Brown:
Great. I'm excited to dig into that a little bit more in just a minute. But Troy, give us your background. How'd you get started and what are you doing now?
Troy Marshall:
I got out of grad school and went to work for CattleFax and then I had the fortunate thing to be in the seedstock business and ranch for probably the next 30 years. We made a big decision here a couple years ago and I had the opportunity to come to work for the American Angus Association and work with AngusLink programs.
Kasey Brown:
All right. So today at the Feeding Quality Forum, we were talking about what cow-calf producers can do. And Don you mentioned that genetics is really that foundation. Can you talk to that a bit?
Don Graham:
Genetics is like building a house. It's how nice and how desirable you want that house to be. But without a solid foundation, the house isn't going to last. So in my terminology, and it may be quirky to some people, but I like looking at it that way. If you don't have a good solid genetic foundation, you can add all the different kinds of programs you want to, but, the industry is a huge industry, but it's also very small. And I say that meaning that if your cattle get in, people talk, and your ranch is known for cattle that don't perform very well. And you could have every bell, whistle, you can NHTC, natural, GAP, everything you want to do to any herd if you want to manage them that way. But if they're not going to perform for them in those programs, you're not going to be able to sell them after about four years. Word gets out.
And in saying that, yes, genetics is what I preach the hardest with. Like I said, Crossroads is large broker dealer operation. I would say 80% of the cattle that I source and manage will be more of a program type. Whether they just be a grid type cattle is important, obviously. If somebody's shooting for $70 to $120 head premium in the grid or whether they be a program being what I just mentioned. There's things like AngusLink and Top Dollar, there's two genetic third-party genetic companies out there that can tell me how those cattle score, genetic wise. They're coming from a third party. I come up and ask Mr. Rancher, “How are your cattle?” Everybody's cattle are the best. I understand and I'm glad they take pride that way. But your idea of the best and my feedyard's idea of the best is sometimes, a lot of times, two different things.
So I can turn around to my customer to be in the feedyard and say these cattle scored 156 and so forth and so on, with AngusLink, here's the genetics behind them. All the guesswork that they can take out of their equation of what they plan on doing with those cattle and what premiums they might be able to bring back on those cattle is going to influence on how much they're willing to pay for those cattle. So in doing the service to my cow-calf man or stocker operator, to do a service to him is to give the same story, get that information from him. But in turn I preach to the feedyards for them to continue to better manage and give you better quality. You know, that has got to go back and forth. It needs to go both ways. And that's still a struggle in times, it really is.
Especially if you're a smaller operator and they've got to blend those cattle with somebody else's cattle to fill a pen, that gets very, unless they're into a specific program to where their eID identified and they are harvested on a grid or whatever, you can get the grid information back and identified back to the ranch. But you still have to take a diluted performance in the yard, unless you're dairy, and you've got an identifier, the calf eats at the same bunk every time, so input and all that, which you don't have that in commercial feedyard obviously. So yeah, genetics, it's what it's all about to start with.
Kasey Brown:
Okay. Troy, let's talk about some of the genetic opportunities AngusLink offers our commercial producers through benchmarking, through some of the programs that we have that can help give that information to folks like Don.
Troy Marshall:
Well I think Don did a great job of describing the value of genetics and I think in today's market environment with higher cost of gains and higher prices for cattle, just the value of genetics is maybe more important than ever. And when you'd mention the benchmarking side of things, the neat thing about the Genetic Merit Scorecard® is that it lets producers know where they're at within the industry, whether they're above average and below average. And even though they may not be able to get direct carcass data back, we have enough data now on over 130,000 head of cattle, and we can tell them from a genetic standpoint really pretty closely how those cattle do if they're managed properly. So they can have a good idea of where they need to improve and where their strengths and weaknesses are in their program.
Kasey Brown:
Cool. Don, you mentioned earlier how genetics are a foundation, but management really helps those, move those calves forward. Can you talk to that?
Don Graham:
Management is, really it's hand in hand as important as genetics. Because you can have the best genetics in the world but if the cattle aren't managed right, properly, you've got the genetic foundation but you just lost your edge really, in all honesty. Some people take management as just giving vaccinations and do it Vac 45, and feedyards are pushing more and more. Okay, Vac 45 is okay but really I want to Vac 60. And you heard Greg earlier, I really want to Vac 100. Well, we're getting too far in the weeds there because most ranchers aren't facilitated to background them a hundred days, a lot of them not even 60 days.
Some of them can, with moisture and everything, they can put those cattle away for 60 days. But you start getting past that point, they either one, they need a note payment that's coming due or what have you. Or they need to save a certain amount of that grass for their cow herd, feed costs and managing that.
So a good solid vaccination program, don't forget your minerals. Minerals are as important to you as the vaccinations, they really are.
I guess the biggest gripe and you don't see a lot of it, but you see enough of it. There's times I feel like I need combat pay when I'm shipping cattle. And if those cattle, the only time they see a human on the ground is either when they get penned and they're going to get a shot put in them, or multiple, or castrated, or they're going to get loaded. So if they're not used to going in that pen and handled that way and not get hurt while they're doing it, you're going to scatter them. If you don't get out in your cattle, out in the pasture, on the ground by foot, horseback, if all they see in is a four wheeler, side by side, or a pickup, and they see an arm hanging out the side, when you get on the ground, it's a whole 'nother, now cattle are flighty.
So manage your cattle just in every aspect, that is your income, that's your livelihood. Take some time to walk out in them and get them used to people, get them used to you. They go to a feedyard and they're bouncing off the pens, they not only disrupt that pen but each pen on each side of them gets stirred up. That costs that feedyard money, takes them longer to get on feed. If they put them beside a pen of cattle that's been on feed awhile and then they get them all stirred up, there's a lot to management besides just giving shots and Vac 45 days.
Kasey Brown:
I love that. You talked earlier during the panel about how you want as much information as possible. I think what you said was I need more ammunition to give to these, to your customers, the feedyards. Talk to that of how enrolling in a program can help with giving you the information you need to help better serve both ends of your customers.
Don Graham:
Some of the first questions, especially to a new customer that the first time I bought their cattle, is I want to know their genetics on their bulls. And specifically, were all those cows raised there? Or had they bought the cows? The genetics, again, the foundation, I try to get all that.
Their vaccination program and not just they've got two rounds of modified-live but what did you give them? Or a lot of times they'll tell me they've had two rounds and when you get down specifics, maybe the first round was killed, second round was modified-live, or maybe both of them were killed. But because they’re not stupid but ignorant in the fact that there's a difference between killed and modified-live obviously. So if they think, as long as I give them two rounds, we're good. It really doesn't work that way. So I'd like to know what they give and when they give it.
I want to know if the cattle are turned out on grass, if they're penned. If they're penned, how long they've been penned. If they're getting fed out on grass, supplemented, I want to know if they're in the pens, what the ration is, how much corn, whatever. And again, how long they've been on feed.
I want to know if they are on any programs, if they're on an AngusLink deal, what's their score on it? If they're in NHTC, natural, GAP, BeefCARE. And I'll top it off with have you ever fed the cattle and have you ever gotten any data back? And if so, how long it's been. What changes have you made since then? But it's wonderful when you get not only the feeding data but also the carcass data back on set of cattle and especially if it was last. You can take that component and if they've added some other genetics to it. It's all a database anymore. And the more data, and all the bullets I can put in there, and all you're doing is you're taking the guesswork out of the performance of the cattle and what they can expect on a grid for the feedyard. When he's comfortable with that, he's comfortable with, if you're selling the cattle, you need to allow him to make some money too.
And that's been the history, especially the longer past history, the idea of those guys was, “I'm not giving them any data, they'll just use it to beat me up with.” It's not so much that way anymore. It's more, I see it, I mean you'll see that once in a while. But more likely you'll see it that they're wanting that data to see what changes they need to make to better what they've got, of course to better their profit margin. But every time you better their profit margin, you need to be better in the feedyard profit margin as well. So it's got to be a win-win situation. And again, like I said, the data needs to come back from the feedyard as well. They need to be willing to participate in that data return. That's the only way a win-win deal works.
Kasey Brown:
I really loved how you talked about how you need, in addition to all your management on your operation, you need to manage your marketing. And Troy, I want you to talk to this too, of what kind of timeline, how far ahead should you start working on that marketing?
Don Graham:
It depends on your region. It depends on what specifically you're trying to do. If you’re putting them in programs such as NHTC, natural or especially GAP or BeefCARE, those slots get filled up out early. So if you're not ready to price the cattle, at least let me or your buyer know you're going to have 200 head of steers, hundred head of heifers, whatever it is. I want to go with them in three months, four months, five months. I expect them to weigh, but I'm not sure. I was just talking to gentleman in the hall, from northwestern Arkansas, it can vary every year by a hundred pounds what the calves are going to weigh. So he can't go out that long. But if you can give me when you're going to come, then I can start making contacts with specific yards or something to say this set of cattle is set up to come four months from now. We're not ready to price because we're not ready to base the weight. We're not sure how they're going to perform. There's ways to work with that, which up and down slide, some will give it some won't.
But specifically program cattle need to be, if not forward contracted three or four months out, at least getting in the idea that they're going to be. So some specific yards knows the cattle and says I want to buy those cattle. He can make plans to buy those cattle now if they can reach their market weight. Those cattle, if you wait till the week before or even two weeks before, all of a sudden they call me and say they want to go in a week, they weigh nine. To find those slots at that time that quick, takes a lot more work. And the worst thing you can do is pay for all that and then get maybe a grid-type premium for the cattle but not the extra $20-$30 that we've been seeing on some of these cattle.
Now if you're just sitting there talking about higher performing cattle that the yard can depend on a grid out of them and stuff like that, the basis is too wide to go out very far right now. It narrows as we get there. So it's been my, for it seems like the last year or least, my advice to them is I'll get the word out but let's wait until almost time to sell them. If it looks like pen space is starting to get too tight, we need to go ahead and make a move, we make sure we got a slot for them. I say a slot, it's not a slot but a pen space form at that time. So it's my job to watch pen space in that arena. But I can remember several years ago you'd have cattle contracted 6, 8, 9 months out all the time. You don't do that anymore.
Kasey Brown:
Troy, could you talk to how AngusLink helps you get your marketing on track and forward thinking and things like that?
Troy Marshall:
Well, I really like Don's comments about market timing. But we always look at marketing too as being a long-term commitment and you know have to have a strategy in terms of marketing your cattle. And as we talked about, it begins with genetics. So a couple years before you market that calf crop, it really begins your marketing program and then you need to align your marketing and management. We talked about the health and nutrition as part of that process. And then it's always about building relationships. And then the AngusLink program comes in there as well. We document that, we document the genetics, we provide the information for those buyers and sellers so they can capitalize on it. And then we'll work with you guys to help get that information out in front. And ironically in the cattle business we do a great job of thinking long-term on most things, but we tend to look very shor- term from our marketing program. We're going to haul them to the sale barn in a couple weeks and that's really probably a little late to get that process started.
Kasey Brown:
If people want to learn more of how do I get started thinking that far ahead, where can they start?
Troy Marshall:
Just give us a call at the office. We'd love to sit down and go over the market and your program, what works for your operation and your long-term goals. And then we'll help to lay out a marketing strategy that I think fits your program, your cattle and where you want to go.
Don Graham:
Same kind of deal with us. We've got customers that's been our customers for years. They'll call me several times a year through the year and knowing that they're not going to come till October. I might talk to them in January, again March, April, June, July. They'll just say, “What do you think? Where do we need to be? What do we need to be looking at? What's it look like? Should I feed them?” Because there's times I'll tell them you've got the genetics. It's one of those times that the grain situation, everything, you're going to be better to feed them this time this year. And in doing that, being honest with them, they're going to be back next year. It's going to be somebody that's going to be a long-term customer.
Leslie Jennings with Crossroads, that's one of the first things they drilled in my mind. It's all about building the relationship. We want long-term relationships. We don't want to sit there and just have a customer for one year. Now with that being said, loyalty is starting to get a little bit less, how did you put it? I don't know if it's the younger generation coming in that doesn't understand that loyalty. It's just like our policy at Crossroads, whoever bought the cattle last year gets first option on the cattle. Period. So we don't even put them out to anybody until we've talked to who bought them last year. And you'd kind of like to be treated the same way, but you're not always treated the same way by any means.
Kasey Brown:
Right. So much of relationships and loyalty goes into that reputation of your herd and of your cattle. Is there anything else that you think or that you wish commercial cattle knew for their marketing efforts?
Don Graham:
It's like I was explaining the cow being a factory. The day of the hobby ranching or farming isn’t really there, there's not enough margin in it to be a hobby anymore. And there hasn't been for several years, it's just been hard for people to figure that out. You've got to treat it as a business. You've got to take the time, sit down of an evening after you eat and get the kids to bed, get on that computer and start doing some research. Look at different programs that's going on. Gather all the information you can. Make it a study time. Maybe when the kids are doing their homework, maybe you need to do a little homework. It never hurts to take in new ideas. The days of “Grandpa did it this way, Dad did it this way, by God I'm going to do it that way.” In today's margins you can't operate that way. You've got to be willing to be flexible.
And there's times to sell them, well not very many, but there's even times you can sell them off the cow. I don't recommend it. But there's times you do that. There's times if you got the grass, if you got everything and you sit there and you're looking at if I make my cattle weigh eight, and instead of selling weighing six and a quarter or six and a half, I got the grass, I've got the means to do it. If I make them weigh eight and they'll hit the April fat board, they're worth more than if I sell them right now at six and a quarter and they're coming, they're going to hit an earlier board and I've got the means, the grass, forage, whatever to make them do that. Be flexible enough to take advantage of that at the time.
Have backup plans. Got a set of cattle right now down in Crowell, Texas, he normally backgrounds himself on his place. He had no grass down there, there's no way to do it. But he knew, they're a set of program cattle, he knew to try to sell them off the cow. He called me and I said let's find a home for them, just put them somewhere, which he's done. And it's going to pan out. We're going to come in September, weighing seven and a quarter, seven and a half. It's going to hit a good spot. I've already had two yards call saying they're going to need some September program cattle.
If we'd have dumped them when he had to come off the cow with them, everybody was having to dump them in Texas because of the forage, the market wasn't there for him for what he'd put into it. So you got to have a backup plan. You got to have, the way this world's going today, you never know what curve's going to come next. And usually it's not even in the agriculture. It's usually some administrative or something that's pulled a string. So that'd be my advice.
Kasey Brown:
Troy, you mentioned that marketing is not rocket science but it's awful complex. What kind of advice would you give someone to think about?
Troy Marshall:
I think I really appreciate Don's perspective and insight and it's invaluable to have a mentor and somebody to help you walk you through this process as well. And while we always focus on genetics and increasing our market access and flexibility through the programs and those sort of things, and market timing and management, I think sometimes we lose sight of the fact that really that buyer's looking for predictability and uniformity and consistency of not only our genetics, but our management program, is really important. And the bottom line is while we talk and we focus on the cattle, it's a people business. And it's built on relationships and trust. And so building that over time I think is really, really important.
Kasey Brown:
Perfect. I do want to bring up one more topic before we wrap this up. You mentioned some really great options for smaller producers of how they can pool their cattle and make those small groups of calves more attractive. Can you talk to that?
Don Graham:
Yeah, it can be done. It's not the easiest thing to do. But it is feasible and it's viable to do it. I actually first became acquainted with producer groups in Louisiana where they will, maybe one guy's got 60 cows and another guy's got 140 cows, and they're pretty alike, type and kind of cow herd. So one group is run by a veterinarian down there. They all got together, I don't know if it's coffee shop over having a crawfish boil or who cares, and said what if we all get the same genetic bulls and run the right program, vaccination program, because I always sell them off the cow. There's very few Louisiana cattle, there's a few more than there used to be. But they're going to come off the cow, and maybe build loads instead of just haul them to the barn every time, then maybe we can get more for them. So we do a fair amount of that.
As I mentioned, I've worked with Mike John at MFA Health Track on several programs where we build, are able to build some loads. The nice thing with that Health Track program, they've always got an eID button in their ear. Again, those cattle being blended, you don't always get feeding data back or it's a diluted feeding data. But if the cattle are gridded, you can easily identify every calf back to the ranch that they came from. So getting a group of ranchers together that's got smaller herds, it's very difficult these days unless you're going to a corporate yard, and even corporates don't really split loads. But those guys will sit there and build pens every day as those cattle are being delivered from all different areas, locations. So they're building pens off average weights and type and kind of cattle.
But you're just going into a pipeline and you don't foresee any, you can't get any data back and what data you got back really wouldn't be useful. So to be able to build some loads with your neighbors is a very doable deal. A lot of times they do it with family members rather than neighbors. Because family members a lot of times, well part of the time they can't, but can get along better than neighbors can as far as I would rather buy this bull or vice versa. If you can build enough numbers. I'm not knocking sale barns, we'll always need sale barns.
But you got to remember you're in a business and marketing, just like Troy said, that really starts two years ago. And especially when you're going into programs. You may have to change your whole mineral program to be a natural. You may have to figure out this and that. So that set of calves are already out because they're knocked out of the program, so you've got to start that management early. When I talk about marketing management, I'm talking about actually selling the cattle. So I'm on a little bit different side, but it all blends together.
Kasey Brown:
So what are some options for smaller producers that AngusLink provides?
Troy Marshall:
I think Don made a great point that the industry's just structured in a way that you have to have load lot sizes. So whether it's pulling cattle together, as he mentioned, I think that's a great alternative. I see quite a few people working with their seedstock producers and that seedstock producer taking the lead there to help group similar groups of cattle together from a genetic and management standpoint. And the other alternative, as I mentioned too, is the sale barns with some of those special feeder-calf sales that they all have similar management, it gives that buyer at least an opportunity there to buy some low lot sizes through that opportunity as well.
Kasey Brown:
You mentioned smaller producers can have a hard time getting information back and I think that's where the Genetic Merit Scorecard could be really valuable of being able to benchmark your herd off of the industry average. Gentlemen, I really appreciate that I'm sure we could talk about a lot more things. I know I have more questions, but as we wrap this up, we all know the cattle business is really a people business, you both have said that already. So we like to end our podcast on some good news. So if you would share with us something good that's happened either personally, professionally, or both.
Troy Marshall:
I just think it's a really, really exciting time in the cattle business. We're going into a period of historically tight supplies with historically strong demand. And I think it's going to be three to four years at least from a cow-calf perspective, that's going to be a very rewarding time in the cattle business.
Don Graham:
I have to agree with the same thing, that was my point exactly. Cattle cycles, five- and 10-year type cycles. And I think we've definitely bottomed that cycle out. We're on the up trend. As you said we've got historically tight numbers and our demand is, even in the economy that is sluggish, the beef demand is there and growing, continuing to grow. So I'm excited. Pretty bullish about the next two, three years exactly. I'm not sure we've quite go four yet, but...
Troy Marshall:
I'm optimistic.
Don Graham:
They're optimistic. Yeah, I'm in the same ballgame. That's my exciting part too.
Kasey Brown:
All right, well that is a great way to end this. Thank you so much for your time and your insight. Listeners, if you would like more information, check out our website, angusbeefbulletin.com/extra. We'll have plenty of information from the Feeding Quality Forum. As always, you can subscribe to the Angus Beef Bulletin and the ABB EXTRA with the links in the show notes. And if you've got any comments for us, let us know at abbeditorial@angus.org. This has been Angus at Work. Thanks for listening.