…right! Getting the cattle industry and the beef business together.
Working out here in the Wooster, Ohio office sure gives a girl from the cattle industry a better view of the beef business. Most use those terms interchangeably, but I see it different. You see, the cattle industry — the one I grew up in at least — is pretty well wrapped up in calving, weaning, branding, tagging, feeding, moving, fencing, checking, hauling… you get the picture.
Anyway, the point of these ramblings is this — working at CAB gives me a chance to share what you all do in the cattle industry with the folks who are working hard in the beef business. We had a group of foodservice distributors in the office earlier this week, and I had the opportunity to give them a presentation about “creating supply.” Basically, a brief look at what you all do to create a product for them to sell.
In an attempt to explain the different cattle industry segments in beef business terms, I made a few correlations these food service distributors would be more familiar with. I thought you might enjoy seeing just how similar these two worlds are. We are, of course, all in it together.
Seedstock producer = food service distributor
Focuses on gathering the right supplies (genetics) that will meet customer needs. Some can be very large (a broad line distributor like Sysco) and provide several breeds and animals that have a variety of prominent genetic traits. Others might be smaller but more focused in the genetics they supply (like a specialty meat co.). They might promote that their purebred, registered Angus bulls will sire calves with above-average marbling and REA. These cattlemen provide the “raw” product to their customers, the commercial cow-calf producer in a variety of forms (bulls, replacement heifers, semen, embryos, etc.).
Commercial producer = restaurateur/chef
This is the segment most people are familiar with, just like the restaurant business. This segment makes up about 95% of cow-calf production. They take the genetic goods supplied to them by the seedstock guy and turn it into a usable product, just like a restaurant. Each commercial producer has his own “recipe…” some focus on one breed and may even register their animals. Many raise cross-bred animals, utilizing the genetics of several cattle breeds. This is where most of the beef starts that will end up being served in a restaurant.
Backgrounder = maitre d’ in the restaurant
This segment is often considered the “middle man” of the business. A good maitre d’ ensures that the connection between kitchen and dining room runs smoothly, and monitors the flow of guests into the dining room. Similarly, the stocker/backgrounding segments “holds” cattle to add weight and prep them for the feeding segment. Stockers can control when cattle go to market (through the feeder), distributing the calf crop more evenly through the year. Like a maitre d’, this segment is often optional – some cow-calf producers grow their own calves and sell directly to the feeder, just like some waitresses seat their own guests.
Feeder = wait staff
This is who presents the final product – he sometimes just has to work with what he’s given, but is usually the one who takes the fall if it doesn’t turn out quite right. In the cattle production chain, he is closest to the consumer. Cattle feeders run a business of tight profit margins and must product an acceptable and uniform product as quickly as possible with minimal inputs and expenses. They have little effect on what happens in the aforementioned segments, just like a waitress doesn’t have much influence over the kitchen but to relay what the customer wants. Similarly, a feeder can communicate what the end-user wants back to the cattle industry with dollar incentives.
What I love most about giving a presentation like this is the enthusiasm, admiration and interest these folks have in the work you do in the cattle industry. They LOVE learning about you, and I hope you’ll enjoy learning a little more about the other end of the business as this blog progresses. If you want to learn more about what food service distributors like Sysco are doing to market your product, just holler at me. I’d be happy to share more.
