Decatur County Feedyard
I heard Warren Wiebert speak at K-State last year in 2012. I knew he knew what he was talking about so I called him when I got back to Dighton, and this is what he had to say.
Value based marketing has been at the heart of Decatur County (Kansas) Feedyard’s program for nearly 20 years. As one of the early utilizers of electronic ID and the sorting systems, Decatur County has been adding value to customer cattle since 1994.
Recently Bob Strong sat down with Warren Wiebert, feedyard manager since 1977, “to recall how the feedyard started their value based marketing approach.”
Bob: Eventually we started feeding cattle for other ranchers all over. How did you get started feeding cattle for ranchers, specifically?
Warren: We came to Decatur County Feed Yard in 1977. About 1980 we started weaning calves for a rancher in Wyoming. So that’s where the calf weaning story really starts with us. Eventually going through the 1980s we started acquiring more and more ranch customers and we had them on a retained ownership basis.
Some of the ranchers with what they considered to be higher genetic. They’d come to look at their cattle we would look at cattle on the show list, and they would ask me, “How are you going to price my cattle, and how are you going to price other cattle that I don’t think are quite as good as mine?” They were referring to “other” cattle here in certain pens that most anybody would describe as put together cattle, out of sale barns.
Back in the 80s, honestly I would have to tell him that they are probably going to be priced the same. The buyer is probably going to bid me about the same on those cattle, and that’s what I’m going to try for.
The rancher/customer never did understand the Value Based Marketing in that approach. They would ask why are they buying the genetics they’re buying when they are going to sell them for the same price as the other cattle. And I just said, “That’s the way the market is, it doesn’t sound fair, but that’s the way it is, the buyers are buying volume.”
So then they would ask me, “Why am I buying these high price bulls?” And I would tell them I guess it’s because you’re looking for a higher daily gain maybe on the cattle in the feedlot, or maybe you’re going to get better feed conversion on those cattle off those better quality bulls, or maybe you’re going to sell a heavier carcass, but they’re going to bring the same dollars per hundred, you just might be selling more dollars and have a more efficient animal. So that’s really the way it was and we always were striving for what we would call a more Value Based Market, we eventually got it straightened out.
Bob: When did things change, to more of a value added market like we see today?
Warren: As time went along we did a couple of feed outs for Certified Angus Beef, Certified Hereford Beef and then and Kansas State. And in the early 90’s we did a thing here for the National Cattlemen’s Beef Association called the Strategic Alliance Pilot Project in 1992 and 1993, and we were trying to demonstrate to the industry what value based marketing probably ought to look like. So the feedlot partnered up with 15 ranchers around the country, and the cattle went through Cargill to be marketed, and Safeway bought the beef after that. So there was quite a lot of write ups about Value Based Marketing based on the study’s. So that’s kind of the history about how we got here.
Bob: When did you add the technology to the program?
Literally the next year in 1993, Allflex came out with an electronic ear tag and Micro Beef out of Amarillo, TX, came out with a sorting system or an evaluation system on cattle that looked to us to give us a chance to take superior ranch cattle and encourage the rancher to retain ownership, make sorting possible, and make tracking possible through the packing house, to where a rancher really would get meaningful data on every animal. We got carcass data on every animal and also got a chance to see what a profit and loss situation looks like on every animal. That’s the program we started in 1994, and we have been on that program ever since.
We saw very dramatic increase in the number of cattle going through that system, throughout the 90’s and we probably peaked on that number about 2003.
Bob: Is this the same program you currently utilize in 2013?
We continue to run that program. We base our program on the genetics from the ranching standpoint. We try to reach the high market value of the marketing cycle in the spring of the year, so we sell a lot of ranch born calves in March, April and May of every year.
That’s how our program is laid out, we take these ranch cattle and run them through our sorting system a couple of times, once at the very beginning of the feeding period and then once at the end of the feeding period. We work to make the rancher’s cattle fit into probably 4 or 5 different marketing windows. We gather as much value as we can for his cattle. Then the rancher could see when his cattle are marketed, how his herd compares to the other herds inside this feedlot and really from cattle across the country.
He can see how each individual animal in his herd relates to the others. If he keeps track of his bulls, he can tell what different sires make in profitability of the cattle that he feeds with us.
Bob: How do you think the ranchers utilize this information?
The rancher would like to know what he is doing right, what he is doing wrong, and how he can improve the profitability of what he is doing. So what we are doing begs the question to the rancher, “How do you know how good your cattle are or how bad your cattle are if you never feed them out in a feedlot situation and then compare your results against other people that are doing the same thing as you.”
You need to benchmark your cattle, and then see if you can improve the profitability of your herd based on the information your received. We have worked with various ranchers around the United States to where they will track what difference a bull or series of bulls make in the profitability of their herd when you control the inputs and then measure the outputs.
With one in particular rancher in Kansas, when we keep the value of corn the same from one year to the next, when we keep the value of feeders the same from one year to the next and the value of the fed animal the same, this particular herd gained $70.00 on the ranch in one year by changing out the bulls in the herd and he gained $75 at the feedlot by doing the same thing. So in one years’ time he moved the needle forward $145.00 a head in profitability. He benchmarked his cattle, made substantial changes to his bulls, and was able to measure the results.
That really explains what our program is about. It’s a lot more than just feeding cattle. It is getting data that is useable back to the ranch, to where the rancher understands what the profit points are at the feedlot level, and at the ranch level, to where he can make changes which ought to enhance his profitability going forward. So he benchmarks the first year, the second year he sees how he compared to the first year, and the third year and so forth and so on. The rancher is making changes. He understands why he’s making changes, and he measures the results. He knows what difference it’s making to see if he actually did some good.