Get Premium Pricing Through Marketing Co-ops

Get Premium Pricing Through Marketing Co-ops

The secret to filling a truck and getting better pricing may be to join forces with like-minded neighbors

minded  neighbors.

By Robert Fears

Premium prices for calves almost demand truckload quantities, yet small producers struggle to fill so much rolling space.

A truckload is commonly defined as 50,000 pounds of cattle, live weight. A more understandable definition might be 100 calves weighing 500 pounds. For many producers, it is impossible to produce a calf crop of this quantity because of their operation size.

One way to overcome this limitation is to join or organize a marketing co-op. They come in all sizes.

Big box: Truckloads of cattle earn better pricing and can be achieved by small operations if they work together. Marketing co-ops are one way to achieve this.

Various-sized marketing co-ops operate in Texas and are organized in different ways depending upon the needs and desires of their members. They can be small with less than five members or as large as 100 members or more. Co-ops can be governed by all members or by a board of directors.

Most co-ops require that everyone use the same cattle preconditioning program and breed for calves that are similar in color, size and uniformity to those produced by other members.

One example is a small marketing co-op comprised of Chance David and two other beef producers, headquartered in Joaquin, Texas.

David says, "Our co-op agreement requires that each member pays for their own animal health products, feed and other inputs. Calves from each producer are pooled by uniformity in size, weight and age.

"After the calves are sold, each member receives payment based on the number of calves they contributed to the pool. Although the co-op contains only three members, it provides the framework for us to work together in obtaining premium pricing for our product."

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Join together: Smaller operations like this one in eastern Texas may not have the 75 to 100 calves needed to fill a semitrailer truck but when they manage and sell alike they can must that many and boost income.

Much bigger is the Northeast Texas Beef Improvement Organization (NETBIO), headquartered in Sulphur Springs, Texas. A co-op with membership ranging from 500 to 600 annual members, it represents 35 Texas counties and five other states.

NETBIO's focus is to improve genetics of area cattle herds, enhance management practices to meet national quality assurance standards and produce healthy pre-conditioned calves that will perform from the time they leave the ranch until they reach consumers.

"The organization is comprised of a group of independent cow-calf producers and agribusiness representatives working together to enhance the beef industry in Northeast Texas," said Dwyatt Bell, NETBIO president.

"It is governed by a 19-member board with half of the members from agribusiness and the other half producers. The organization was originally organized as part of the Hopkins County Chamber of Commerce and now that NETBIO is a separate organization, the Chamber continues to handle our mail and sit on the board of directors."

In cooperation with the Sulphur Springs Livestock Commission, roughly six special premium stocker and feeder calf sales are conducted annually. These sales provide an opportunity for producers to offer their pre-conditioned calves in load lots, provided they meet the criteria for participation. The criteria are designed to help members produce healthy calves that easily adapt to backgrounding and feedlot operations.

"NETBIO requires that all calves be weaned 45 days or longer prior the sale," says Marguerite Lohmann, a member of the organization. "The calves must be on feed and know how to drink water from a trough. Two doses each of three different vaccines are required." She says these include respiratory virus vaccine for IBR, PI3, BVD, BRSV and 7- or 8-way Clostridial and Hemophilus somnus."

Marketing co-ops report premiums ranging from $45 to $70 per head on 600-pound steers sold in truckload lots. Such premiums can make joining or organizing a successful co-op a profitable endeavor.

Fears writes from Georgetown, Texas.

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