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Putting Value Into Marketing

If you have added value to your calves by age verifying and vaccinating them with a four-way, modified-live vaccine, and your herd is on an adequate mineral program year-round, Canadian Verified Ranch Direct can help you add value on the marketing side.

Canadian Verified Ranch Direct partners, Darren Keown of Roblin, Man., and Jodie Griffin of Crane Valley, Sask. aren’t out to reinvent the wheel — they’re just greasing it a bit by facilitating direct sales from producers to feedlots in a low-stress auction format.

As a cow-calf producer, Keown became interested in selling calves direct off the ranch where he and his dad run 280 cows and a 400-head grasser operation. As a business college grad who owns Roblin Veterinary Services and a Cargill Animal Nutrition dealership along with Dr. Marianne Hunter, he has well-established connections with producers and feedlots in Manitoba, Ontario, Quebec and Nebraska. A Cargill Connects meeting in Lethbridge, gave him the opportunity to bounce his marketing concept off feedlot owners out west.

“You know there’s interest on the feedlot side when they are willing to come all the way out here to Roblin for a meeting on their own dime,” Keown says. Ryan Kasko of Kasko Feeders at Coaldale, Alta., Travis Hickey of Western Feedlots at High River, Alta., Dr. Barry Sutherland of Purina Ag Products at Woodstock, Ont., and Darrell Stowwater from Cottonwood and Diamond 6 Feeders at Wayne, Nebraska were guest speakers at a meeting organized by Keown last August to get the business off the ground. The lure of liner loads of verified calves compelled other feedlot owners to make the drive to Roblin.

They weren’t disappointed when they arrived — the event attracted 225 producers. Keown adds that lots of ranches are getting big enough to put together packages of uniform calves on their own. The feedlot operators explained why these well-managed, ranch-direct calves are of value to them. Order buyers from WD Livestock at Roblin, and Prairie Livestock at Moosomin, Sask., explained the logistics of how the direct marketing program would work.

Meanwhile, out in southwestern Saskatchewan, Griffin was operating her own business, Western Direct Livestock Services. She has strong ties to the beef industry in Alberta where she built her career working 12 years in the cattle finance business and most recently, with JGL Livestock at Moose Jaw. The Griffin family runs a 650-head cow-calf operation.

The partnership, formalized early this year, effectively doubled the buyer list. Canadian Verified Ranch Direct now has all of the major order buyers in Saskatchewan and Manitoba on board to serve a wide cow-calf client base and is open to working with all buyers.

Direct selling via sealed bids

The concept is straightforward and familiar. Producers contact Canadian Verified Ranch Direct to enrol their calves. One of the company’s representatives goes out to the ranch to look at the calves, describe them and the feed program, and call the shrink and weigh-up conditions to suit the calves. The calves stay on the farm until they’ve been sold.

Keown puts the show list together on Monday mornings. It includes the basic information such as breed, sex and approximate average weight, as well as other management and performance information and photos provided by the producer.

The show list goes out by by e-mail to all of the feedlots and potential buyers on their list. A second show list for calves that have been enrolled for upcoming sales in the following week or two is also circulated.

The sealed bid method gives buyers one crack at the calves during each sale. Keown accepts bids by e-mail, fax or phone until the stated closing time, which is usually Wednesday of that same week, then contacts the producer with the offer from the highest bidder.

Producers have the option of passing at no cost. Keown adds that more than 90 per cent of the time the calves sold because of the top bids they received. If the producer rejects the bid, he or she is welcome to re-list for a future sale.

All bids are FOB the farm. The order buyer looks after weighing, sorting, and transportation logistics as well as the financial transactions. As soon as the calves have been weighed, the producer receives his payment for the full amount, minus the regular government deductions, checkoff and commission. The commission fee of $12 a head for seven-weight and under, or $15 for calves over 700 pounds applies only to calves that are sold.

“The feedlots told me they wanted to work through their order buyers because that’s what they’re used to,”

Keown says. “The producers like the arrangement because order buyers are bonded so they know they’ll get paid.”

“It’s fair price discovery using the sealed bid method before the cattle leave the farm,” Griffin explains. “Producers can’t control the market, but selling direct gives them a way to cut costs by controlling freight costs, the weigh-up conditions and shrink. This is the kind of information they need to know to get ahead.”

Keown adds that it’s a way for producers who are willing to stand behind their cattle to build rapport with buyers and a following for their calves year after year.

The only drawback is that direct marketing isn’t really suited to selling small groups of calves. It could work if a number of producers planned ahead to put together to loads of uniform cattle, he explains. Sometimes the order buyers can make arrangements if there are similar cattle in a similar location or if they can fit them in with their other orders that week.

Verifying the calves

The cattle follow the paper trail. Producers are required to forward copies of their receipts for their vaccines and minerals along with the Canadian Cattle Identification Agency birth certificates to Canadian Verified Ranch Direct as proof that they have followed the production protocol. There are no requirements to use specific brands of vaccines or minerals, however, the receipts must be submitted before the calves go on the show list.

Keown keeps the receipts on file and generates a certificate to confirm that the calves meet the requirements. He forwards the Canadian Verified Ranch Direct certificate and age-verification papers to the feedlot, which gives them the documentation they need to hit better markets at their end.

Canadian Verified Ranch Direct deals mostly in one-iron calves. The only time second-owner calves qualify is if Keown already has the calves’ history from the original owner on file.

Keown has recently made arrangements with Cargill Animal Nutrition for a $2 per head rebate on the selling commission for producers to put toward future purchases of Nutrena minerals, providing the producer has been using the mineral program for the past year. He hopes to soon announce another deal for participating producers.

Keown and Griffin handled the sale of about 4,000 verified calves during the first year in operation. The feedlots have been satisfied with the quality and performance of the calves they have purchased through the program. If a producer takes the time to age verify and vaccinate the calves, its likely the rest of the management practices are right up there and other important details, such as proper castration and dehorning, will have been done properly, Keown explains.

Producers were obviously satisfied with the prices they received if they decided to accept the bid. Though the premium may not have been all that they had hoped, the bids were generally a couple of cents higher than bids in the ring, he adds. What made the difference was the savings on commission, less shrink, the weigh-up was better and it was less stressful all around for the calves and the producers.

For more information contact Keown at 204-937-5993 or Griffin at 306-690-7561.

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