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Every number has a story: $6.93

Numbers are everywhere. Six o’clock, 1 minute 30 seconds, the 1st, 60 mph—perhaps those are a few you saw before this post published.

On weekday mornings, as you head toward the pasture, you might tune into farm radio, where reporters inform you of $135/hundredweight (cwt.) fed cattle prices and a $6 Choice-Select spread. Today you might have heard 21 to 13 or 8 and 1, or other such numbers that relate to your favorite college football team.

Black Ink Team photo

There are a whole bunch of “numbers” people in this picture.

Among the Certified Angus Beef LLC (CAB) staff, those of us on the Black Ink team often take a little good-natured heckling over our love of numbers. And we can’t really deny it.

If there’s a management tweak that might make you more money, we want to see it in black and white. If there’s a new marketing idea, we want to crunch the numbers. If there’s a genetic advancement, we want to see the R.O.I.

We love numbers, because we know you probably do, too. They matter.

You might carefully study expected progeny differences (EPDs) or the price of a feedstuff or others that directly affect your bottom line….perhaps the most important number of all.

During the next 30 days, we plan to share 30 numbers with you. Each one tells a story of how even the seemingly random and only slightly related are intertwined to impact your profitability. Truly, as the title suggests, “Every number has a story.”

So here’s the first one: $6.93.

The short story is that $6.93/cwt. is the combined steer and heifer premium for 500-lb. calves of known Angus genetics over all other breeds of similar size and condition. Auctions barns across the country submitted data for the biennial survey, conducted just a year ago.

Here’s the back story: For years, Angus producers would ask the early Supply Development team members, “Where’s my premium?”

They were raising good commercial cattle, using Angus genetics and yet, as far as they could see, the only one getting paid for all of that was the packer or maybe the cattle feeder.

Of course, the packer grid is the only place cattlemen will see a Certified Angus Beef ® brand premium listed as a line item, but it doesn’t mean those selling at weaning are being shortchanged.

What do you suppose these fellas are worth at auction?In 1999, Steve set out to put a number to what he already knew was happening: cattle buyers were paying more for animals that they thought would earn more at harvest.

The first report showed a $1.25/cwt. advantage. That was back when 50% of the U.S. beef herd reported Angus influence. Today, that number is closer to 75%, but demand more than kept up with the growing supply.

“We might question branding or some other program sustaining a premium over time,” says ag economist Lee Schulz of Iowa State University. “If it’s garnering a premium today, will it last or disappear when there are more of those calves available? These numbers show it lasts.

“A lot has to do with producer-buyers understanding what’s embodied in those cattle, and that had to start with the end-user, the beef buyer, filtered all the way back to the farm and ranch,” he says. “That has just continued to grow as we’ve maintained the trend for stronger Angus premiums over non-Angus calves.”

Pull-through demand at its finest.

May your bottom line be filled with black ink,

Miranda

PS–Be sure to read on in the days ahead, as we share more in this “Every number has a story” series.

Day one: $6.93

Day two: 2.5 million

Day three: $204.10

Day four: 12.1 million

Day five: 11/13

Day six: 8 million

Day seven: 139

Day eight: $39

Day nine: 30.1%

Day 10: 120 million

Day 11: -2.26

Day 12: 12 to 15 minutes 

Day 13: 30%

Day 14: 32 million

Day 15: $154,000

Day 16: 118

Day 17: .51

Day 18: 105

Day 19: 1650

Day 20: 36,575

Day 21: 603

Day 22: 23%

Day 23: 31

Day 24: .53

Day 25: 40%

Day 26: $4.52

Day 27: 7 hours

Day 28: 35th

Day 29: 36.8 million

Day 30: 1%

By the way, we’re not the only ag bloggers writing our way through November. Here are some links to other month-long endeavors you’re sure to enjoy:

 

blackinkmiranda Visit Website
I love God, my kids, my hubby, rural life, agriculture and working for CAB. I’m officially the director of producer communications, which basically means I get to learn from lots of smart people and pass that information along to lots of other smart people: you. I’m so lucky to work with cattle producers and other folks in this great industry. (Oh, and one more job perk? I get to eat lots of really yummy beef.)
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