2010 K State Beef Conference Value Optimization Mark Harmon Joplin Regional Stockyards, Inc.

2010 K State Beef Conference

Value Optimization

Mark HarmonJoplin Regional Stockyards, Inc.

Our facility has in excess of 300,000 square feet (10 acres) of area under roof and 23 outside traps, for a capacity of 7000 Head inside and out prior to starting sale.

• The primary market of JRS consists of

33 counties in Missouri, Kansas,

Oklahoma and Arkansas.

• In this market there are 2,100,000 total

head of cattle with 900,000 of this

number being beef cows (based on the

last USDA statistics)

• On a normal feeder cattle sale, we will have

approximately 500 consignors with an

average head count of 12 to 400 animals per

seller.

• In 2009, we sold in excess of 435,000 cattle

and are on target to sell 475,000 in 2010.

• We also have a weekly Video Sale selling

from 4000 to 12,000 head for producers in 8

states.

• We’re located at GROUND ZERO !!!!!!!!!!!!!!

Order Buyers !!!!!!

• Order buyers are looking for large numbers of cattle, that can be put into load lots.

• Pen space availability in feed yards, starter yards, grazing conditions or short term back grounding facilities, and the time of year will determine their choice.

• Most major feed yards are looking for cattle weekly. And need a good source of quality cattle in numbers.

• Depending on time of year. Most buyers are looking for cattle with good genetics, weaned and processed and that have “survivability”.

• Cattle with a good compensatory gain will be in high demand just for the condition they’re selling in at the time.

• A lot of cattle are purchased, that are seen as cattle that are upgradeable, that might have been missed managed.

• Several buyers are local that have grass to graze and feedstuff. They will buy cattle, get them started and sell through our video sale, using this as their risk management program.

• Buyers always have a great interest in cattle that are sold through special value added and preconditioned sales. Where Source and Process verification along with Age and Source Validation can be verified.

• During the heavy fall runs buyers are looking for calves that are weaned and processed. Trying to stay away from the cattle that are considered HIGH risk, unless they’re set up to handle them and can buy the cattle in a price range that fits.

• Cattle that are purchased in early spring for grazing the Flint Hills or other areas, can be in very high demand. These cattle fit a certain weight range. Sometimes it seems price is overlooked and quantity is the purchasing point.

• Yearling buyers are always interested in these cattle based off the Board of Trade, freight, cost of gain and when they can be sold for harvest.

Creating your own Value

1. Things to think about in these uncertain times in the cattle business.

2. Don’t be Afraid to Stand Alone!

3. Always place your product in the best possible marketing position available.

4. Consider things to differentiate yourself and your product from the norm.

Added Value in Higher Markets

• The more calves are worth, the more pre-conditioning pays– Many practice the opposite

• How can that be?– If feed cost stays the same– And calf prices rise

• Each pound gained creates higher profit

How I went from this on August 23, 2009

To This in Just 9 month and 24 days.

Adding Value with Weaning & A/S

1. Knowing all of your input cost and what that means and selling in the right market.

2. Understanding why a complete vaccine & nutrition program along with age & source verification pays, and how the value offsets the cost

Adding Value By WeaningUtilizing MFA Health Track

Feed & Age & Source Program

April 23 total weight on 64 head = 33,685 lbs

May 3, 2010 ~ Monday Sale @ JRS from USDA Market Service

Showing a 4% shrink from 1st weight 32,382

Average weight - 504 – Average price $122.50

Average dollar amount per head $ 617.00

Valued Added Sale June 24th, 2010 • June 24 total weight on 64 head = 41,780 Avg #

- 653 – Avg price $119.45• Average price per head $ 780.00 • Total weight gained 8095 lbs. from April 23rd to

June 24th, total 63 days.• Total Cost – feed-vaccines-tags-mineral-labor-fly

control total - $4144.22• Total per head $64.75 – COG $0.51 -• Difference for Age / Source / Process Verified

• $95.21 per head

Just Remember Just Remember Animal ID is not traceabilityAnimal ID is not traceability

ID merely enables traceability, ID merely enables traceability, which makes which makes

Source-Age-Process Verification Source-Age-Process Verification PossiblePossible

Remember !!!!!!!

• If you don’t have it identified

• And don’t measure it

• You can’t manage it

• It’s not always price per pound but the amount of the

CHECK !!!

•Have you ever noticed… anybody going slower than you is an idiot.

•And anyone going faster is a maniac.

REFLECTING ON LIFE

• As the Population Grows Everyday

• The Cow Herds Shrink Everyday

• It’s the Greatest Time In Your Life

to be in the CATTLE BUSINESS

BEEFIt’s What’s for Dinner

Thank You