The cattle industry is moving into the information age and some producers are going to be rewarded for their ability to collect, understand, and respond to data on their animals, says the senior cattle buyer at Cargill Foods.
“Information is what you need to focus on,” Aaron Fehlauer told attendees at the recent Ranching Opportunities conference.
Even being able to provide basic information such as vaccination history can help the packer or feedlot, he said.
“If you’re doing the work, you might as well get some value out of it. That’s why you need to know and you need to become part of the value chain,” Fehlauer said.
Fehlauer encouraged producers to call the feedlot where the cattle went and ask if they can get information on their cattle.
“Follow up and follow your cattle. Take some pride in what you’re producing and get that information back,” he said.
Fehlauer highlighted two areas where informat ion increasingly equals dollars.
The first involves catering to consumers. He noted tight cattle supply is pushing up prices and there will likely be a push-back from consumers.
“We have to be more competitive in the eating experience to make sure consumers want to pay that extra price,” he said.
That means delivering a more consistent product, and one that complies with the needs of the food-service sector and retailers.
“In the past, it was all carcass weight because that was the best determining factor of whether the animal was too large, or whether it fit into our food-service programs or not,” Fehlauer said.
NEW GRADING SYSTEM
Now the focus is on controlling and monitoring rib-eye size to determine whether an animal is too big or too small. That’s one reason why Cargill has moved to a new grading system, said Fehlauer.
“In the past, the grader visually appraised the cattle and stamped the grade on the carcass for producers on the grid system or even for those who sell live who were interested in their data,” he said.
Cargill is now using a vision camera grading system, which has taken some of the subjectivity out of the system and made it more uniform.
“What this means is that we have more valuable information,” he said. “Information creates value.”
Producers need to obtain as much information as they can about how their cattle graded and respond accordingly, said Fehlauer. He warned producers not to expect a premium right away but if they sell their cattle into the value chain for several years, they will have the needed information on their grades and will be able to obtain a better price.
Another key issue for packers is waste and that’s why Cargill is now focusing on a pre-harvest food-safety objective plan, said Fehlauer.
“There are millions of pounds that we throw out every year because of food safety,” he said. “This is a huge opportunity for the industry.”
In order to remain competitive and profitable, packers need to throw out less beef, he said. Cargill’s food-safety program emphasizes things such as pen management, hide washing, and vaccinations.
The No. 1 factor resulting in higher premiums over the last three years was whether the cattle were clean.
“If you keep your cattle clean and you’re selling cattle to me, you can demand a bigger premium than almost anything else you can do,” he said.
Cargill processes over 7.4 million head of cattle annually at 10 facilities across North America.
“Ifyoukeepyour cattlecleanandyou’re sellingcattletome, youcandemanda biggerpremiumthan almostanything elseyoucando.”
– aaron fehlauer, cargill