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Streamlining the path to a good steak – 2013 Part 6

When shiny black baby calves took their first wobbly steps this spring in the mountain pastures of the V Ranch at Thermopolis, Wyo., their path had already been charted nearly all the way to consumption.

From the trucks that will whisk them to the backgrounding pastures at Knight Farms, Lyons, Kan., in the fall to the feed they’ll munch as they pack on the last few pounds to finish, it’s all al-ready organized. e predictable, pro table and repeatable path from pasture to plate is the result of savvy cattlemen banding together at all stages of production.

Just as the Wyoming ranchers we met earlier in this series come together to market their calves to Mark and Kenny Knight of Knight Feedlot, Mark and Kenny have joined forces with other feeders to strengthen their position in the marketplace. The Knights along with 15 other Kansas-based confined feeding operations form the Beef Marketing Group (BMG).

“Instead of competing against each other, we joined together as a group to achieve a common goal,” Mark says.

A 15,000-head feedlot doesn’t have much pull, but multiply those numbers by 16 members and the feeders become a force of their own. Since the group first formed in 1987, they’ve leveraged those numbers to achieve better rates on inputs from animal health supplies to distiller’s grain and created their own grid with packing giant Tyson — a profit-boosting perk usually only afforded to very large feedlots.

“While it started as a way for family owned growing and feeding operations to work together in the face of consolidation, BMG has evolved. In addition, we now develop programs that create added value for our membership and in the cattle themselves,” says John Butler, BMG chief executive officer.

Goal oriented

A grid with de ned parameters gives the Knights and the rest of the BMG group a very specific target to aim for when purchasing and feeding cattle. They know exactly where their quality and yield grades and carcass weights need to end up.

“The processor has identified the most desirable product for their facility and we produce to that standard,” Butler says. “They’ve said, ‘These are the kind of cattle we like,’ and they built a pricing structure that incentivizes us to produce that kind of cattle and impose consequences if we do not. It makes us produce more consistent cattle for them and creates efficiencies in our system be-cause there is a consistent and predictable target.”

A good relationship with the processor also has resulted in carcass data owing back to the feed-lots and trickling all the way back to the ranches. Because the Knights have worked with the same ranch customers year a er year and formed relationships with them, they’re able to pass along that information to start molding cattle to t the grid before they’re even born.

“After all this time working with the Wyoming cattle and collecting data on the different ranches we know exactly how to feed those cattle and know pretty well how they’ll perform,” Kenny says. “We’ve learned to produce to the grid we have.”

These industry-spanning bonds mean ranchers, feeders and processors are able to collectively hone their objectives so everyone makesmore money, Butler says. Efficiencies are achieved and premiums are paid for hitting the target.

Building value

True to the progressive feeders that started the group, BMG works many angles besides just their force in numbers to pry more value from their product. For one, they’ve implemented an extensive standard of best management practices known as the Progressive Beef Program (PGP) that all member feedlots follow.

Critical control points were identified in the areas of animal care and handling, food safety and sustainability and standard operating procedures were developed around them. For example, each feed mill has a system to verify that all feedstuffs coming into the operation are exactly as ordered and that they’re free of pathogens and contaminants. Proper use of vitamins, minerals and other supplements are carefully outlined, animal care and handling is addressed and much, much more.

“The idea is with this system in place we can bring a promise — a Good Housekeeping Seal — to the cattle we deliver to the packer,” Butler says. “They can, in turn, use this verified system related to how we take care of the cattle to create differentiation for merchandizing the product to retail and food service customers.”

Having systems such as this in place has resulted in BMG member feedlots being given the first opportunity to participate in brandspecific programs. In the past, they’ve worked with IBP to deliver source-verified cattle to McDonalds. They’ve teamed with Certified Angus Beef and Tyson to build an aligned system that delivered a consistent supply of all natural Angus cattle.

“What we’ve done is really try to understand what the consumer wants first and then work backward to see what we can do as producers to address those needs, wants and concerns,” Butler says.

For one, consumer data has shown that, as compared to 10 years ago, consumers are more sensitive to animal care, knowing where their food comes from and knowing how it was produced on its way to their plate, Butler explains. In response BMG feedlots have created animal handling guidelines that would pass any hidden camera test. “The standard operating procedures we’ve built means there’s more to it than just saying we’re good caretakers, we’re verifying to the consumers we really are.


The Progressive Beef initiative withstands a third party audit. It allows us to be transparent about our responsibility to the cattle. All employees that interface with animals are trained and certified to these standards and those benefitscarry forward to the packer and the end user,” Butler says.

Quality is essential, but it’s the knowing that really drives the success of these cattlemen and their partners. The ranchers know if they produce their cattle a certain way that they have a buyer that will pay them what the cattle are worth. The feeders know the cattle have been handled in a certain way and they can continue that program to produce to the exact parameters the packer has determined. The packer, in turn, pays a premium to know the livestock coming in consistently meet specifications and will allow for the most efficient processingpossible.

“Knowing how and where our cattle will be marketed with a predictable target provides us a tremendous advantage,” Butler says. “We’ve taken a lot of noise away from the process with the supply chain we’ve created.”

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