Extension Education: Plan Ahead for Marketing
This past year, the Wyoming Business Council and the University of Wyoming teamed up to develop the Wyoming Premium Heifer Program (WPHP). The program drew a lot of interest for producers looking for marketing opportunities for their bred heifers and replacement heifer calves, with 2,000 head of bred and replacement females tentatively scheduled to sell between the November and January sales.
At the same time, interested buyers came from all over the West and Midwestern regions. John Henn of the Wyoming Business Council advertised aggressively in trade shows throughout Texas, Oklahoma, Nebraska, Wyoming and Kansas, as well as placed several ads in regional publications, both online and print editions.
The objective of this program is to develop and market a source of quality replacement heifer calves and bred heifers that are produced and managed under a set of guidelines to meet the requirements of producers nationally. Through the verification of procedures by documentation provided by participating producers, buyers across the country will be assured that the certified animals are managed, raised and bred as outlined in the program. The intention of the program is to provide an outlet for producers of all sizes to capitalize on market premiums.
The first sale was on Nov. 14, 2012, with nearly 400-bred heifers sold in a special internet video sale run through Torrington Livestock Auctions. Results from the first sale were very positive. The sale averaged $1,318 per head and ranged from $1,235 to $1,375. The average of Wyoming bred heifers sold through other programs and auctions during the two-week time period around the WPHP sale was $1,295, with a range from $975 to $1,545. Although this was the first sale for the program, a premium of $20 to $30 per head was realized, compared to other local markets.
The Jan. 9 special sale at Buffalo Livestock Auction saw 444 bred heifers average $1,413 with a range of $1,200 to $1,500. The premium over regional markets was $81 per head. Additionally, many of the cattle in other sales were not exclusively video sales, therefore, additional transportation and commission fees were likely incurred. Cattle from the WPHP were delivered as far away as Iowa, Oklahoma and South Dakota with some bidders as far away as Texas. Thus, it appears the aggressive marketing strategy of the Wyoming Business Council had a positive affect. It is our anticipation that as the program grows and gains a reputation and notoriety that the premium will continue to increase.
The beef cattle industry is experiencing the lowest cow numbers since the early 1950s. Currently feeder cattle and calf supply outside feedlots is down 2 million head compared to two years ago. The current calf and feeder numbers create an alternative market opportunity for cow-calf producers for replacement heifers and bred heifers.
With the limited feeder cattle supply over the next three to five years, several factors will increase the value of heifers. The feeding segment of the industry will be competing for heifers as cow/calf producers rebuild or expand their herds from the Southern Plains to the North.
CattleFax projects the prices for bred cows will increase dramatically in late 2013. The opportunity and timing is ideal for cow/calf producers to take advantage of this premium market. Adding value to replacement heifers and bred heifers through a structured management and marketing program can provide potential buyers a source of females of known production practices and genetics.
Much of the region has had a decent to good spring, and the heifer market is expected to be strong this year. It should be a good year to market bred or replacement heifers. There is a non-refundable $25 application fee and a three dollar per head charge for marketing and program tags. The three dollar per head fee does not need to be paid until all heifers are selected or pregnancy checked and committed to the sale.
It is difficult to develop a program and guidelines that everyone can meet or agrees with. However, we are continually trying to look at every guideline with in the program and make sure it fits with the best production practices for Wyoming producers. The new guidelines and application form for 2013 are posted at wyobeef.com.