Leann Saunders shared her perspectives on “capturing value” within the industry during a Cattlemen’s College session on Feb. 1 at the 2017 Cattle Industry Convention in Nashville, Tenn. Saunders is president of Where Food Comes From, Inc., which is the leading provider of certification and verification services to the food industry.
Saunders and her husband John have been working in the area of livestock identification, traceability and food industry verification for 21 years. Where Food Comes From, Inc. brings together their two former companies IMI Global and Sterling Solutions, as well as the entities of International Certification Services and Validus Validation Services.
Saunders prefaced her remarks by highlighting the ever changing consumer dynamic when selecting beef. She noted that in 1984 consumers were focused on taste, convenience, nutrition, variety and price. Today in 2017, they still are concerned with all of those things, but now also consider what Saunders dubs “credence attributes.” These include consideration for the environment, sustainability, animal welfare, worker care, as well as production practices.
In short, consumers want to know the story behind their food and how it got to the marketplace. As a result, Saunders explained that consumers are turning to labels and brands – and third party verification to validate those claims – to help garner that information. This is a trend that she anticipates will continue and compound.
Illustrating that, Saunders points to the proliferation of brands and various marketing claims on food products – from natural and organic to welfare standards – now available to consumers at grocery stores. Saunders encourages looking in the dairy section and egg section at the grocery store to get a glimpse at this emerging trend.
To this, Saunders says, “Brand matters.” As well, she shared the value from brands citing research conducted by Midan Marketing in Chicago and Shugol Research in Maryland revealed that 84% of supermarket shoppers were willing to pay up to 5% more for branded meat, while 55% were okay with paying 20% more.
To producers who are not yet involved in verification programs, Saunders suggested source and age verification is a good starting point. Next, she reports their company is seeing increased demand for verification of vaccination and weaning protocols. On the horizon, responsible use verification – documenting antibiotic use – is “starting to pop up,” as is non-GMO fed verification, she says.
Other verification programs include BQA/Quality Assurance Third-Party Verified, Non-Hormone Treated Beef, Verified Natural, Global Animal Partnership 5-Step Animal Welfare Rating, Progressive Beef, Grass Fed Beef and USDA Organic.
Of these many avenues available, she concluded, “As we look to the future, there’s a world of opportunity. What is important to cow-calf producers is to start keeping records and document what you do. It may sound difficult at first, but it’s like exercise. The first week is tough, but it gets easier.”
Two cow-calf producers shared their perspectives on “capturing value” for calves as well. Making remarks were Richard Meadows of Alabama-based Meadows Creek Farm and Sam Hands of Kansas-based Triangle H Grain & Cattle Co.
Meadows shared how his family operation has grown into a seedstock and commercial entity over the past three decades by working with others and looking for opportunities to add value.
Meadows underscored forging long-term relationships and commitments – with producers, feeders and packers. He shared. “It used to be said we were in the cow business; then we called it the beef business; then it was protein, then the grass business…But mostly we’re in the people business.”
Meadows also mentioned his three young sons at home and concluded, “What we are trying to do is create a better future for them.”
Kansas producer Sam Hands, whose family operation encompasses 10,000 acres of grain farming as well as cow-calf, stocker and finishing programs, opened his remarks noting the lack of vertical integration that exists within the beef industry. In comparison he pointed out that the pork and poultry industries are highly integrated and as a result have extreme predictability.
That said, Hands acknowledged, “We’ll never be as efficient as them [pork or poultry] because it takes longer to produce beef, but we still need to keep it in mind.” He added, “There’s not the same romance in pork and poultry as there is with ranching and being a cattleman.”
Turning to the topic of capturing value, Hands stated, “As a rancher our challenge becomes how are we going to turn this [calf] into a beef product. We’ve got to convert pounds per cow per acre and do that in the shortest time and cost possible.”
To become a market maker rather than a market taker, Hands underscored that networking and setting cattle apart through management and quality genetics becomes key. He stated, “Pounds pay the bills in today’s rail market, but quality makes the difference.” And he added, “The bar of excellence for quality beef keeps rising.”
In his closing comments he encouraged other cow calf producers to think beyond the ranch gate. He noted, “Who is your consumer? Who is your market? At the dinner table consumers make choices, we need to ensure when they sit down to a meal of beef it is the best experience. We’ll never be as efficient as pork and poultry, but we need [to utilize] predictability to produce the best.”