Circle A Feeders wins CAB honors

Quality Focus Award goes, again, to Missouri feedlot

by Miranda Reiman

In athletics, the real standouts compete against their own numbers, always trying to better their last performance. In a list of feeding greats, the people at Circle A Feeders, Huntsville, Mo., have certainly made a place for themselves—especially in the Certified Angus Beef^® (CAB^®) record books.

From 2007 to 2008, during their inaugural year in the feeding business, Circle A posted an acceptance rate of 61.4% CAB and USDA Prime on 917 enrolled cattle, and vowed to better that with more experience.

That’s a promise kept, and then some. During the current award year, June 2008 through May 2009, the feedyard increased to 78.6% CAB and Prime on 1,285 head enrolled. That blew by the previous record they established by more than 17 percentage points, cementing a claim on the top annual acceptance rate across all awards and years.

These outstanding stats earned the feedlot, an enterprise of the large registered and commercial Circle A Ranch, repeat CAB honors. Mark Akin, general manager, traveled to the brand’s annual conference in Scottsdale, Ariz., in September to accept the 2009 Quality Focus Award for yards with capacity of 15,000 head or less.

Akin says Circle A staff honed their skill and requirements for cattle coming into the yard. They have “tightened down” on the qualifications, which include age-and-source verified (SAV), 600 to 800 pounds (lb.), less than 11 months old and – perhaps most importantly – 50% or more sired by Circle A bulls.

The customers must also wean the calves at least 45 days and give two rounds of vaccinations, but in return Circle A will buy full interest at a premium to the average market price.

“Genetics are a part of it, but education and management are the other parts,” Akin says. Marketing manager Nick Hammett spends on-farm time with producers before their calves are accepted into the program.

“He is really our customer service manager or our fieldsman,” Akin says. “He walks through the cattle and talks with the owner to make sure it’s a good fit.”

Once calves are approved and purchased, Akin, feedlot manager Scott Crews and the rest of the team do everything in their power to keep the animals on the quality track. The 5,000-head yard is completely enclosed, with management set up to minimize stress from arrival through harvest.

The market has not rewarded Choice grading carcasses over Select as much as usual, but Akin says their sights remain high in anticipation of seasonal adjustments.

“It’s just like everything. With those seasons, there’ll be another with a wide Choice/Select spread, so you don’t make changes,” he says. “The feedyard is set up as the ‘top of the top’ in cattle feeding operations and those are the kind of cattle we’re going to recruit. We’re not going to change that.”

He explains that’s been a ranch philosophy long before the feedlot was even on the horizon.

“Even though we weren’t getting rewarded for the genetic evaluation on our commercial herd, we did it anyhow. Even when we weren’t getting paid for our database, we were collecting weaning weights and carcass data,” he says.

Times have changed and Akin says the ranch does get rewarded for that now, because “information is power.”

“We’ve got to collect all of that and disseminate it to be better business people,” he adds.

The Circle A team continues to take knowledge of their own Angus genetics and combine it with a tried and true feeding program to dominate the quality arena.

Best on a quest

Buffalo Feeders wins 2009 CAB Large Feedlot of the Year

by Laura Nelson

At Buffalo Feeders LLC, military precision brings in the feeding day, sure as reveille.

Trucks trundle out at 0600 hours, filled with ration that has been weighed and measured within a 1% accuracy margin. Every load of corn has been sampled, and the flake is tested every hour. Pen after pen of uniform, black cattle line the bunks, ready for chow.

The Certified Angus Beef^® (CAB^®) brand’s 2009 Large Feedlot of the Year, located near Buffalo, Okla., marches to meticulous order. “It’s got to have something to do with my army background. I like things to be just so…” says manager Tom Fanning, who accepted the award at the brand’s Annual Conference this September in Scottsdale, Ariz.

Contrary to common military thinking, however, the 40-member crew at Buffalo is focused on individuality. Animal induction procedures rely heavily on technology and information from producers. There’s an electronic identification (EID) tag reader on each scale and a scale under each chute to enter each animal into Buffalo’s database. As often as possible, Fanning works with producers who retain ownership to track individual birth, weaning and yearling weights. The database links ranch tags to yard tags to help producers make herd decisions based on feeding and carcass results.

Cattle manager Caleb Nelson works to help customers understand the “intel” that comes back to them. “Whether they are using our information to buy bulls or sell their cows, we want to help them enhance their program back home,” he says. “We’re trying to help customers that are trying to put together something from their genetics to consumption, from pasture to plate.”

Sorting for uniformity is the key to capturing more value. “To me, sorting is the best thing we can do for a customer,” Fanning says. “The cattle that are uniform are easier to sell because they go through the packing plant easier.”

Cattle are frequently re-evaluated, re-sorted and grouped with others at the same target feed-intake levels. Intake goals are set for each pen based on a mathematical equation. “When we’re challenging those cattle to increase their intakes, we have to know where they’re at according to their goal,” Fanning says.

But crunching numbers in an equation is only part of the precision. Cattle are ultrasound scanned at re-implant to monitor progress, a kind of hard information that carries immediate orders. “We try to sort those cattle that day according to what the scan projection was,” Nelson says. Cattle expected to finish at the same quality level are grouped to optimize uniformity.

Fanning relies on his background as an agriculture economics major in college to optimize value in the balance between producing and marketing quality cattle. “It’s all about managing details, not only on your production, but on your marketing, too,” he says, “from risk management, to where you’re selling your cattle, or what programs they’re selling into.” With a calculator seemingly never out of reach, Fanning constantly puts dollars and cents to his feeding practices.

“The risk management side of the cattle business is so key,” Fanning says. “Our business has changed and the price volatility has increased. So what we try to offer are some risk management tools for our customers.

When a feedyard operates with the precision of a combat mission, it’s a lot easier to find time to focus on customers. “We want to manage the details every day – the small things, down to the individual animal, whether that’s through animal health or feed delivery or through visiting with customers. If you manage the pennies, the dollars take care of themselves.” That’s not just a battle plan; it’s a proven path to victory for Angus producers.

Ranch homework for feedlot partnerships

by Laura Nelson

As a cowherd operator, you can produce a quality calf. The feedlot manager knows what it takes to finish that calf on feed so it can earn carcass premiums.

Combine the two sides as partners or retain ownership and the opportunities for herd improvement and profit may just multiply. But this equation only balances when you meet your “perfect” cattle feeding counterpart.

There are thousands of feedlots, and hundreds could work for you, so finding the best partner can be a problem, especially the first time. Once you add up your needs, however, that formula should narrow the field. Finding the answer will lead to more math, but the feedlot and carcass data can help make the herd more predictable and add dollars to your bottom line.

Rather than selling calves or backgrounded feeders for a commodity price, partnering or retaining ownership with a feedlot lets you enter a new world of price discovery. Finished cattle may be sold through value-based, “grid” markets that pay on the individual carcass merit of each animal. That opens the door to selling branded beef and producing for the Certified Angus Beef^® (CAB^®) brand.

Meanwhile, you can track individual calf performance and progress on feed. Feedyards can report rates of gain and feed efficiency as well as carcass data.

“For cow-calf producers who want information to take back to the ranch for their sire selection and cull-cow programs, this data is so critical,” says Mark Sebranek, manager of Irsik and Doll Feedyard, a 32,000-head CAB-licensed yard near Garden City, Kan. “That carcass information tells a lot of stories producers can’t get any other way.”

The drawback to retained ownership is the initial financial re-arranging.

“One of the toughest deals we run into with first-time feeders is that they have their money set up at home with their bankers for payment at certain times of the year,” Sebranek says. “Selling fat cattle instead of feeders changes when you get money to your banker by several months.”

Income taxes are another concern, as that transition can span across two calendar years. The solution may be found in partnerships on a pen basis, sharing a percentage of ownership. The financial compromise can let you sell enough interest in the calves to cover loan payments and split income across tax years.

Fifty-fifty is the most popular arrangement, but some feedyards will consider any percentage.

Dan Loy, Iowa State University feedlot management professor, says it’s especially useful for first-time feeders. “Partnering on a pen of cattle gives producers confidence that the feedlot is willing to share in both the risks and rewards of a retained ownership relationship,” he says.

Many feedlots also take on some banking functions, financing cattle, feed, transportation and other expenses at competitive interest rates with no payments due until finished cattle are sold, according to beef cattle specialists with CAB. Paul Dykstra and Gary Fike say these services can be necessities.

“Without the right financing scenario, it may not even be feasible to retain ownership,” Dykstra says. “But partnering is one of the surest ways to establish trust.”

Once you decide to establish that link to cattle feeding, it’s time to formulate that list and find a feedlot partner you can trust, Fike says. The first variable to consider in this formula is hard to quantify: feedyard reputation.

You can ask Extension agents, veterinarians and cattle feed nutritionists, work through feeder and rancher associations or browse the Web. You could take a more personal approach.

“Ask for recommendations from your neighbors, friends and other people with the same type of cattle and experience in feeding,” Fike suggests. “Ask about the yards and managers they are comfortable with and that have a record of consistent performance.”

Sebranek gladly provides references. “If I know someone in your area, I’ll ask my customers if they mind new customers calling them, because they want to see what their cattle can do here.”

Establish special marketing needs and exactly what you expect, Dykstra recommends. “If you age-and-source verify or raise natural animals, make sure the feedlot will capture those premiums and aggressively pursue all marketing opportunities for your cattle,” he says.

Some yards will return data on pens of cattle only; others will provide individual animal data. Make your data needs clear from the start, and get a firm commitment from the manager.

“The feedlot should be experienced in accessing carcass data, so it’s part of the normal business of the lot,” Dykstra says. “If a manager says, ‘We can sure try to get you some carcass data,’ that’s not good enough. It’s already clear he’s not sure about it.”

Feedlot performance may be of more immediate concern, Loy says.

“A feedyard must provide the services a producer thinks are important, and they have to do it in a cost-effective way,” he says. To show what they can do, feedlot managers should provide detailed performance reports, closeouts that explains yardage and feed charges, chute fees, typical medical costs and any other financial obligations. Producers should ask to see closeouts that exemplify cattle similar to their own size, type and background.

Itemized charges and fees vary from yard to yard, so don’t worry about the small things, Loy advises.

“You may be comparing different costs on kind of an apples-to-oranges basis,” he says. “Focus on comparing the bottom line and total cost of production.”

When the numbers add up, the only decision left is that first one: who can you trust? Sebranek says, “If you’re not comfortable with a feedyard, then it’s not going to work, no matter if they do a great job for you or not.”

Personal visits will convey a feeling for the feedlot’s maintenance, animal treatment and staff integrity. “We’re in the people business as well as the cattle business,” Loy says. “One thing about cattlemen is they have a sense about business relationships, and many times they just need to go with their instincts. They need to find people they trust, and if something doesn’t seem right at a feedlot, it probably isn’t.”

Sidebar: Sitting down with a feedyard manager

A good feedlot manager knows his business inside and out. If you’re considering a partnership or retaining ownership, it’s your business to know it equally well.

“There’s no need to be shy in asking questions,” says beef cattle specialist Paul Dykstra, with Certified Angus Beef LLC (CAB). “Be upfront and know what you’re getting in to.” CAB offers questions to consider in the marketing section of its Best Practices Manual, available at www.cabcattle.com/best-practices or by calling 800-225-2333. Here are a few major topics for your first sit-down with a potential partner.

Feedlot history

Get the basics on the feedyard’s background. How long have they been in business? What are the manager’s goals and philosophy of feeding? What kind of cattle do they typically feed? Do they feed cattle from your area?

Feedlot manager Shelby Jones says potential customers of Ranger Feeders II LLC, Dighton, Kan., ask such questions. “They’re trying to get a big picture of what goes on at this feedyard, what we do and why,” he says. From issues of cattle comfort to the finer points of attention to detail, “accurate two-way communication is essential.”

Feeding process

This is the reason you’re entrusting the manager with your cattle, so it better make sense. What do they feed, why, and where does it come from? Do they have emergency feeding plans for when bad weather or other disasters strike? How consistent is their feeding schedule?

“Understanding how feed is accounted for eases the mind of newcomers,” Jones says. “So we usually talk about how the feed is weighed to a pen for each feeding, and how it’s recorded and posted to the pen.”

Rations are customized and change through the year and as your cattle progress toward finished weight, their intake constantly monitored for quantity adjustments. “Starter rations” may vary with calf type and age, and how much intake they are accustomed to, Jones says. Sharing that information can reduce digestive upsets and stress that may lead to other diseases.

Closeouts or performance records

Managers should be happy to show you a sample closeout record, but if you don’t understand what those figures mean, it’s not going to do any good. Iowa State University professor Dan Loy says producers should question anything and everything on a closeout.

“Some of these questions are going to seem simple, but they’re important,” he says. “What were the weighing conditions? Were they full weights, were they adjusted to a standard dressing percentage at the end? Do you calculate deads as part of the cost of production or is the death loss ignored?” Ask about how the numbers on the closeout were calculated – how do they determine the number of days on feed? What’s the markup on feed costs, if any? Be sure to clarify any acronyms or abbreviations you’re not familiar with.

Financial options

This is where numbers better start making sense if you’re going to make this partnership work. CAB’s Gary Fike, beef cattle specialist, says it’s critical to know and understand all your financial options when going into business with a feedyard.

“Ask about their financing options, what interest rates are and how much equity you need to leave in,” Fike says. “Given the beginning value on cattle, ask what opportunities exist to hedge them or enter into a basis contract. Asking about such risk management techniques doesn’t take the risk out of the market, but it does take the unknown out of what you stand to earn or lose.”

Don’t stop

Keep asking until you feel well informed in choosing the feedlot. If a manager doesn’t take the time to answer all your questions thoroughly, he’s probably not someone you want to do business with.

“The big deal in finding a feedlot that works for you is making sure you’re going to a yard, you’re talking, and you’re asking questions,” says Mark Sebranek, manager of Irsik and Doll Feedyard near Garden City, Kan. “I give potential customers all the time in the world – if they want to talk for three hours, we’re going to talk for three hours. They’re going to ask what they might feel are stupid questions, but they’re not. They’ve got to ask all those questions to make sure they’re comfortable with what we’re doing.”

Bar V advances with CAB

by Lacey Altwegg

North Dakota is home to a ranch and feedlot that targets the Certified Angus Beef^® (CAB^®) brand. Bar V Ranch LTD, Jamestown, N.D., has been committed to producing high-quality Angus cattle since the 1970s. In May, the Bar V 1,500-head feedlot took that commitment to the next level.

“We decided to become a partner in the CAB Feedlot Licensing Program,” says co-owner and manager Brian Amundson. “We were already doing a lot of the same management practices, so it just made sense. Now we have better carcass data to serve our customers.” He works along with wife Jennifer and parents Van and Patty Amundson to keep Bar V Ranch running smoothly.

Paul Dykstra, beef cattle specialist with CAB, compliments Amundson’s approach to feeding and marketing his cattle. “This will be a great outlet for North Dakota producers interested in the CAB target and getting data on their cattle,” he adds.

CAB-licensed feedlots add value with management that maximizes the genetic potential of Angus-influenced cattle, Dykstra says. Coordinating nutrition and implant management practices with ranch customers allow for the best in Angus carcass quality.

The program is designed to reward producers and feedlots for high-quality cattle that meet the CAB brand specifications. Partner feedlots enroll cattle and market them to CAB-licensed packers, earning premiums for those that qualify as CAB.

Bar V Ranch joins the ranks of 64 CAB feedlots in 16 states, in a system that promotes their ability to manage for quality. “Brian wants to feed the top end of the cattle population, and this affiliation with CAB will help provide a more public presence in the beef business,” Dykstra says.

Amundson classifies his feedlot as, “small with a competitive edge.” Bar V Ranch regularly sorts cattle at reimplant or at the feeding period midpoint for optimum quality, a benefit that is not common at larger feedlots, he says.

“We are able to spend more time on sorting, receiving, processing and shipping cattle to be sure we are producing the highest quality,” Amundson says. “That allows us to target the higher end market.”

Not only does Bar V Ranch pay special attention to the needs of cattle, but also the needs of the producer. Owning cattle on feed and also operating a 400-head cow-calf business, Amundson says he can relate to producers.

“I am in the beef business,” he says. “It’s what I do every day, so I am familiar with what producers go through. We feed cattle for investors and producers, but also for ourselves, so we truly put our money where our mouth is.”