The Latest from the desk of Vern Rausch, past AHA Director and past President of CHB, LLC...

CHB Records 1 Million Pound Week

For the first time in Certified Hereford Beef’s (CHB) history, the program sold more than 1 million pounds of product in their 400 retail stores and food service outlets. The CHB program continues to grow at a rapid pace, which creates greater demand for Hereford cattle.

February 15, 2002

To:  Hereford Beef Producers

From:  Stan Dickman – Sr. Vice President of Sales & Marketing

Re:  An Open Letter to Hereford Beef Producers

On behalf of the customers, sales & marketing team and the entire Harker’s organization, I want to take this opportunity to express the genuine enthusiasm and pride that we take in marketing America’s most consistent line of premium beef products!

Harker’s is headquartered in Le Mars, Iowa and has been synonymous with quality meat products since the company was started as a small town meat market in 1906 by Plymouth County farmer and cattle producer, George Harker. From those humble beginnings we have grown to become the nation’s largest Center of the Plate focused Foodservice distributor with annual sales of $200 million, three steak production facilities located in Le Mars, Denver and Minneapolis, and distribution to 18 mid-western and Rocky Mountain states.

Since our original launch of the Certified Hereford Beef Product line in April of 2001, it has become the fastest growing and most successful product addition that I have witnessed in my 24 years with Harker’s. Our customers and sales team believes in the product because it consistently outperforms all other beef products – at any price and any government grade. With the USDA grading standard changes of the mid 70’s, the explosion of continental cattle breeds in the U.S. market and the rise of packer label premium lines, the beef in today’s packer label boxes is simply not the same high quality that we all remember from the beautiful “swinging beef” of the 40’s, 50’s and 60’s.

Here at Harker’s we believed in the product so much that we now exclusively specify that only Certified Hereford Beef be used in our Signature of IowaÔ line of premium cut steaks, pre-cooked prime-ribs and boxed beef line. Future plans call for further SOI/CHB product line extensions such as fresh & frozen ground beef patties, chicken fried beef steaks, pre-cooked pot roasts and other quality beef products.

We here at Harker’s thank you for maintaining your production standards and certainly encourage you to put more Hereford Beef in those boxes! Have a great 2002!

Harker's Distribution, Inc., 801 6^th Street SW, PO Box 1308, LeMars, Iowa 51031      Phone  712-546-8171

Market Prices for Hereford and Hereford Baldie feeder cattle are determined in the feedlot belt

     Feedlots and Packing plants that produce and harvest finished Hereford and Hereford Baldie cattle are concentrated in the Midwest, and are located there for economic reasons. Their computer models calculate input cost, efficiencies and potential selling prices.
     One of their main input costs is sourcing of the different quality grades of cattle. They then consider the efficiencies and market opportunities of those cattle. Obviously, transportation and grouping costs are major items of concern when sourcing cattle. Hereford producers in the outlying areas would be well served by developing in their area backgrounding feedlots that would group Hereford and Hereford Baldie feeder cattle, finish giving them their calf hood shots and then get them started on feed. The feeder cattle could then be marketed to Midwest feedlots in semiload lots. Local demand for Hereford feeder cattle would increase. This practice also creates uniformity and efficiency all the way to the consumer.

September-November:  Yearlings, Calves to Feedlots off Grass

Map courtesy of Cattle-Fax

HerfNet - New Tool in Marketing

By Vern Rausch, AHA Director

     Feedlots are looking more and more to the Internet to locate feeder cattle. They say the Internet is their eye into each ranch and auction barn.  They purchase cattle in every way that is available to them.
      Your Hereford association has just unveiled tools for every commercial Hereford producer to communicate with any buyer at any location.  No computer, fax, or video is needed.  All you need to do is simply call 1-866-437-3638 toll free, and Amy’s friendly voice will ask if she can help. The information she will need is where, when, how many, and the description of your feeder cattle.  She will then load the information free onto the Internet for you.
     You should list your cattle several days in advance of the time you plan to sell. If your auction barn calls in your listing for you, the auction barn gets their name listed free as the representative of your cattle. The list of feeder cattle gets faxed regularly every few days to several feedlots that specialize in feeding Hereford and Hereford Baldie cattle. To list every group you have to sell, no matter how large or small, is in your best interest.  As you or your auction sales representative gets more familiar with the program, you or he can load information day or night directly into the HerfNet web site.
     If you would like, you can check out the cattle listings by going to www.HerfNet.com. There you can scroll or search each column. If you click at the top of any column it will line up the cattle by state or weight, or you can sort the list any way you would like.   
     Along with a multitude of Hereford black baldie feeder cattle, around 3.1 million Hereford and Hereford red baldie feeder cattle are produced each year. Your local Hereford fieldman is most interested in helping you market all your feeder cattle. He is also willing to help you and your local auction barn organize a special feeder cattle sale if you so desire. Special feeder cattle sales help get the attention of order buyers and feedlots. Because large groups are attractive to order buyers, small groups have the most to gain when consigned to these special sales.    
     Ranchers need not feel alone in learning how to use the Internet as a marketing tool. Many of the Auction Barns are just now learning the advantages of placing their weekly consignment list on the Internet as well. Order buyers too are now looking to the Internet to find the cattle for which they have orders.
     There is also a category on HerfNet to list your commercial Hereford and Hereford Baldie replacement females you have for sale. They too can be entered by calling 1-866-437-3638 toll free. The HerfNet web site is convenient for both buyers and sellers to communicate in the market with each other.
     When marketing your cattle, one must never underestimate the importance of the second last bidder on you cattle. As you travel all the way to the bank with your check, you will never know how far the last bidder would have bid on your cattle without a competitive second last bidder. Calling your sales representative and Amy at 1-866-HerfNet are the two most important calls you can make this marketing season. You can play a definite role in how many buyers will contend as bidders on your cattle.

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Active Marketing of Commercial Herefords Making a Difference

By Vern Rausch, AHA Director

     Hereford producers have stepped up their commercial marketing efforts this past couple of years and it is paying off. Hereford feeder cattle have risen more in price at the market place than all other feeder cattle. By getting involved, we have also learned what it takes to enhance their value. Their purebred seed stock supplier often tells commercial producers that they can enhance the value of their feeder cattle by using his genetics. Commercial producers have come to expect more.
     The computer age is changing the marketing of commercial feeder cattle dramatically. You can now search the electronic airways to learn what the market is, where cattle are, their availability and description. We now know that information is extremely effective in increasing the value of commercial Hereford feeder cattle; therefore, your Hereford Association is currently developing a database of information and software to readily access that information. You can help yourself a lot by calling 1-866-437-3638 toll free. HerfNet is the name of the Hereford Database. You can also directly enter your feeder cattle that are for sale by going to www.HerfNet.com. This will expose your feeder cattle to buyers nation wide.  Feeder cattle sales are now advertised on the Internet in the same manner.
     Much time has been spent in analyzing what we have learned from the sales so far. The most successful practice that enhances the value of Herefords is when a background lot purchases several small bunches of Herefords and Red Baldies and then consigns them to a special Hereford & Hereford Baldie Sale. This supports the market for the small bunches all the time and makes the special sales larger and more attractive to the feedlot buyers. Large bunches of Hereford and Red Baldies are now bringing the same premium and some times even more than Black Baldies receive. Some of our progressive producers are currently doing this successfully by buying other small bunches to add to their own. I have conducted a phone survey of the three largest packers. Their comments were as follows.

   Herefords are different. Their window of right time to kill is small. They kill from the very best to the very worst, so we know there are some good ones in there. We also know “they eat well”.

     From this, you can see the importance of getting Herefords bunched. This allows them to be fed, managed and killed at the right time. I have also been surveying large feedlot managers to determine better ways to market Hereford feeder cattle to them and to find out what their perception of Herefords is.  Many of their comments about Herefords were similar to that of the packers. They like to get them in large, even bunches so that they can do a better job of managing the feeding and marketing of Herefords. Feedlots are buried weekly in advertising of feeder cattle sales. They do not want to be contacted when small bunches are selling. What does get their attention though is when they are notified of a 500-head or larger sale, or when they are contacted by someone they know personally, such as your local order buyer or auction barn owner.
     On average, 55,000 head of Hereford and Red Baldie fat cattle are killed each week. This is ten percent of the total fed kill. Two percent of the Herefords currently go through CHB and 98% go the commodity route. Herefords have risen more in price than the average of all cattle in the last year. When asking the people in the marketing chain why Herefords are still gaining on the market in price, they tell us that the perception of Herefords is changing. They also give credit to the bunching of Herefords brought about by the CHB program, which is educating the industry. They say that bunching reveals the true identity and consistency of Herefords.
     Marketing of commercial Herefords varies from region to region. If you have any suggestions on how to improve the marketing of commercial Herefords in your area, please get them to me. Together we can make an even bigger difference.

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CHB Beef Chain
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A Branded Beef program is changing the perception and value of Herefords

Producers are learning that Herefords bring more money when sold in big bunches.

Marketers can sell Herefords for more money & earn more commission when selling in large bunches.

Feedlot owners are rediscovering the feed efficiency of Herefords & that it is much easier to sell them within their two week harvest window when feeding Herefords in large bunches.

Packers are learning that Herefords eat well, and they are easier to harvest at the right time if they can buy them in bunches.

Retail Stores are discovering the customer satisfaction of Hereford beef.

Consumers are rediscovering eating pleasure & are commenting on the consistency of the eating quality of Herefords.

Breed them all Hereford.

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Keys to Successful Feeder Cattle Sales

1. Form a Producer Steering Committee of  2  or more producers.
2. Steering Committee communicates with Auction Barn Owner.

   • Assure Auction Barn Owner of help with Order Buyer list and in getting Consignments.

   • Let Auction Owner determine best time of sale. He should coordinate with larger consignors. Smaller producers need to be invited by both Steering Committee and Auction Barn Owner.

   • Request that sale date be listed on local Hereford Assn. and AHA activity Calendars.

   • Coordinate advertising with local Hereford Assn. and producers in local Media.

   • Compile mailing list of local Order Buyers to insure that they are all contacted.

   • Communicate to Auction Barn Owner, Order Buyers & Owners of local Backgrounding feedlots the profit potential of purchasing smaller groups and reselling in a larger group.
3. To get the attention of Feedlot Owners, a 500 head or more sale offering are needed.

4. It is imperative that Auction Barn Owners fax a list of consignments to Order Buyers within the last couple of days before the sale.

Common Problems

• Selling small groups.

• Feedlots do not want to be notified of small groups selling.

• Order Buyers are secretive of where the cattle go.

• Red Baldies get sorted from Black Baldies.

• Auction Barn Owners are afraid that Feedlots will deal directly with larger producers.

Best Ways to Enhance the Values of Hereford Cattle

• Bunch smaller groups into larger groups.

• Get the word out that they are for sale.

• Provide health, performance and carcass information on feeder cattle.

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