Marketing Flashcards
What are the 2 most important things in marketing?
- Determine target market (Who are you going to sell to?).
- Determine what you are going to sell (What type of cattle will you have and how will you raise them?).
What are the 3 traditional options for livestock marketing?
- Stockyards.
- Auction markets.
- Country markets.
What does the stockyard option require?
Producers consign their cattle to a commission firm that sells their cattle to the packers.
*Less popular due to possible collusion between commission firms and packers.
What 3 types of cattle are primarily sold at auction markets?
- Bulls.
- Cull cows.
- Feeder cattle.
What is the commission charge range on auction market sales?
1.5-4%.
What other costs are associated with auction market sales?
- Feed if housed overnight.
- Health inspection.
- Insurance.
- Yardage.
- $1 Beef check-off program for seller.
What are the 5 advantages of using auction markets?
- Bonded.
- Established trading rules.
- Serves local areas.
- Serves large or small producers.
- Regularly scheduled sales.
What are the 2 disadvantages of auction markets?
- Can be small and attract only a small number of buyers.
- No control over the price you receive.
What are graded sales?
Special sales where the cattle being sold are priced based on specific qualifications (ex: number vaccines they have received).
Why do grade sales favor smaller producers?
It allows them to obtain premiums for management practices.
How is a country market set-up?
Producers sell cattle directly to the next stage in production through order buyers, commission representatives, and/or direct marketing.
*Also called spot or cash sales.
What are the 4 advantages of a country market?
- Animals are on the farm until after they are sold.
- Lower marketing cost.
- Negotiated prices.
- Some health risk protection.
What are the 2 disadvantages of a country market?
- Frequently just larger producers.
- Lacks the competitive pricing of an auction.
What are the 4 newer options for livestock marketing?
- Electronic marketing.
- Cooperative marketing.
- Alliances.
- Carcass based marketing.
What are the 3 ways electronic marketing is conducted?
- Internet/computer auction.
- Satellite video auction.
- Teleauction.
*2 million cattle are sold in the US using this method.
What are the 5 advantages of electronic markets?
- Animals on farm until sold.
- Bonded sales.
- Competitive bidding.
- Flexible delivery terms.
- Sales attract many buyers.
What is the 1 disadvantage of electronic markets?
Frequently limited to large producers.
What is cooperative marketing?
When a group of smaller producers agree to standardize genetic, health, and management practices to create a larger pool of feeder cattle.
What 4 things does joining a cooperative allow for?
- Accountability for management practices.
- Attracting the attention of buyers through larger numbers of animals.
- Participation in larger markets.
- Price premiums.
What is an alliance in the beef industry?
Aligned individuals and companies in different segments of the industry that operate somewhat independently, but through contractual agreements, share in risks and profits when cattle and beef production meet certain specifications.
ex: Consolidated beef.
*Hard to get out of.
What is carcass based marketing?
Where producers are paid based on the carcass trait/carcass merit of each individual animal.
What 4 criteria is used to establish a base price?
- Carcass weight.
- Quality grade.
- Level of carcass defects.
- Yield Grade.
What % of fed cattle are sold on a carcass basis?
62%.
What is forward contracting?
When cattle are priced based on future performance and committed to the buyer at the time the cattle are ready.
Where does forward contracting typically happen?
From feedlots to packers.
What does a smaller base result in for producers?
Less money per animal.
What is retained ownership?
Where producers maintain ownership of cattle through various production phases.
Ex: Maintaining ownership of calves from cow calf operation until slaughter.
What is a feedlot/carcass evaluation program?
Where producers consign cattle to programs, the cattle are placed at a central feedlot, carcass data is collected, and producers are paid based on a USDA Yield and Quality Grade basis.
What do feedlot/carcass evaluation programs allow producers to learn?
- Obtain feedlot and carcass performance information.
- Allows smaller producers to retain ownership.
What is breed influenced marketing?
Selling animals based on the breed they are, which people will pay more money for.
ex: Certified ______________ Beef.
What is age and source verified marketing?
What is natural beef?
Beef that has had nothing artificial added to it and is minimally processed.
*Defined by the seller, no regulation.
What are the 2 cuts of Certified Angus Beef?
- Choice.
- Prime.
Why has there been an improvement in the grade of meat produced by cattle?
- Camera grading.
- Improved genetics for marbling.
- Overall better management focus on quality grade in terms of handling, health, nutrition.
What are calf value factors?
- Sex.
- Age.
- Health.
- Horns.
- Coat.
- Full or fat.
- Disposition.
- Uniformity.
- Evidence of being worked.
- Breed.
What breed brings in the most money?
Angus-sired calves.
What are the options for direct to consumer marketing?
- Farmer’s market.
- Retail stores.
- Internet stores.
- Roadside markets.
- Farm stores.
- Mail order.
What 6 things should be taken into account with direct marketing?
- Advertising.
- Animal presentation.
- Consumer Demands.
- Extras (Ex: Halter training for 4H students).
- Regulations.
- Your location.
What are desirable bulls and heifers/cows sold as?
Replacements to other purebred or commercial producers.
What are culls sold to?
Slaughter channels.
What is the best breed to sell as breeding stock?
The breed you like, believe in, and has market potential.
What 3 things should be done once the best breed for you to sell as breeding stock has been selected?
- Select for breed characteristics.
- Advertise/showing.
- Customer service.
What % of your budget should be spent on advertising?
10%.
What are the 3 purposes of a bull test?
- To record differences in the ability of bulls to gain in a uniform environment.
- Provide breeders with a sound scientific basis for selecting bulls with the ability to rapidly gain weight.
- Provide an educational demonstration of the value of records of performance.
What is the purpose of a heifer development program?
To develop heifers for replacement breeding stock.
What happens in a heifer replacement program?
The heifers are consigned to a central location, fed to gain 1.5-1.75 lbs per day, evaluated for reproductive worth, AI, and returned or sold.
Why are heifer development programs conducted?
To allow for the uniform development of heifers.
When selling breeding animals, how should you present them?
- Clean and dry.
- Healthy and uninjured.
*Do not show customers the sick pen.
What is shrink in cattle?
The loss of weight affecting live cattle.
What is shrink expressed as?
A percentage of liveweight loss.
What is the average % shrink in beef cattle?
3-10%, average of 8-9%.
What is shrink a result of?
- Distance traveled.
- Handling methods.
- Time in transit.
- Type of feed.
- Weather.
What feeding methods are used to reduce shrink?
- Green pasture.
- Dry rations.
What feeding method increases shrink?
Changing feed immediately before transport.
What management method is used to reduce shrink?
Gentle handling.
What management method increases shrink?
Weaning.
What transport conditions increase shrink?
Overcrowding in trucks and trailers.
