Manitoba cattle feeder Harry Dalke and Saskatchewan feeder Ryan Thompson both say they are seeing regular price premiums by being able to market their finished cattle through one organization that can approach packers not only with knowledge, but with price-negotiating clout.
Dalke, who owns a custom feedlot and farming operation near Morden, Man. and Thompson, who manages Border Line Feeders at Ceylon, Sask., says being able to go to packers on a weekly basis as part of a show list of about 4,000 head (and some weeks about double that many) does help squeeze those extra few dollars out of the market place.
Dalke and Thompson are both members of the two-year-old North West Consolidated Beef Producers (NWCBP) organization. It was formed by a group of 12 feeders in 2006 to act as a pooling and marketing agency for finished cattle.
Today the company has 106 members across Western Canada, and this year will be marketing more than 130,000 head of fed cattle. It has also just got into the mature cows and bull business, and so far in mid-November had sold about 3,500 head of cull cattle.
Dalke, who has a one-time finishing feedlot capacity of about 3,000 head, estimates he’s seeing a premium of $1.50 per hundredweight over what he might be able to do himself in the marketplace. While Thompson, who looks after a 12,000-head feedlot, points out that even a one-cent per pound premium more than pays for the cost of the marketing service and “many times we have seen a two-cent premium.”
NWCBP’s own figures show on average their marketings are $14 to $15 per head better than Canfax figures.
“I don’t think I was doing a bad marketing job on my own,” says Dalke. “But it is such a changing marketplace these days and numbers do matter. At the peak of my market season in June and July I might have 20 loads per week going out. On average it is more like five loads per week, and sometimes there are none. So when you can be part of something that is marketing 40 loads every week, that’s going to draw more attention from the packers than just me with a couple of loads.”
Even though the three-year-old Border Line Feeders has more cattle in their custom feed yard, Thompson says he ran into the same issue as Dalke. “Some weeks we would have 10 to 15 or 20 loads and some weeks zero. Getting involved with North West Consolidated allowed us to maintain a connection with the marketplace and a connection with packers, because they are in the market every week.
“For the first couple years we did all our own marketing,” says Thompson, “But then we decided we should focus on what we do best, which is feeding and finishing cattle, and let someone else with the expertise handle the marketing. Our marketing fees are $5 per head, so even if there is only a one-cent per pound premium that more than covers the marketing costs. And by using the North West Consolidated service we are also eliminating our own marketing costs.”
While Dalke still follows the cattle markets closely, he doesn’t have quite as much time, or the same connection with packers as the agents for North West Consolidated. “With more cattle and a consistently high number of cattle on offer, I feel they are able to get more bids and better bids,” he says.
North West Consolidated Beef Producers service is available to all feeders, as well as cow-calf producers too, says Keith Robertson, manager, who is based at the company office in Strathmore, east of Calgary. Some of the very smallest outfits may not benefit from the service, but anyone finishing a few hundred head and up, or even the 200 to 300 head cow-calf operations with cull cows every year, may benefit from the service, he says.
“It is nice to deal in truckload lots, but if someone only has a few head, or half a truckload perhaps we can match them up with someone else with half a load, and then we are in business,” says Robertson.
Current members of NWCBP have a one-time finishing capacity of about 350,000 head and one-time backgrounding capacity of about 100,000 head. Members also own about 30,000 head of mother cows.
Using the NWCBP service is pretty straight forward, says Robertson. Once a producer joins, they notify the NWCBP office when they have cattle ready for sale, a description of those cattle is included in the NWCBP show list that goes to packers for that week. As bids come in, owners can decide whether they want to accept the price. Once the bid is accepted, trucking is arranged and payment is made between the packer and the producer directly.
NWCBP offers three membership levels. The A Membership requires a one-time $4,000 membership fee, plus $5 per head transaction fee for each animal sold. The B Membership has a $1,500 one-time membership fee and a $5.50 per head sales transaction fee. And the new C Membership for marketing of mature cows and bulls, which may apply to more cow-calf producers, involves a one-time $1,000 membership fee and a $10 per head transaction fee. Other benefits included with membership include access to market information.
For more details on the North West Consolidated Beef Producers program visit their website at: www.nwcbp.orgor call the Strathmore office at 403-901-4301 or 403 901-1986.
Lee Hart is editor of Cattleman’s Corner based in Calgary. Contact him at 403-592-1964 or by email at [email protected]