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Doug McKinney
Finding the keys to success in value-added programs
When it comes to programs available for producers to add value to their calf crop, Oklahoma State University Value Enhancement Specialist Doug McKinney said there is money on the table.
McKinney challenged producers at the recent KOMA Beef Conference held in Dewey, Okla., to find out how their product is valuable and then get paid for it.
Value, according to him, is created when a product or service is enhanced to meet or exceed the expectations of the market and/or the consumer.
McKinney questioned producers about what attributes of their calf the customer values. Those attributes can include things such as, if they are weaned, vaccinated, polled, etc.
“Once you figure out what you have to offer then you can start working on a marketing plan,” McKinney explained.
Timing of the plan is essential in order to have it be successful.
“You need to have your marketing plan in place at breeding not at weaning,” he said.
Another key element, according to McKinney, is defining selling and marketing.
“Selling is making the product available for purchase at an accepted price,” McKinney said.
Marketing, according to him, is the art of identifying or creating meaningful points of difference and then communicating those differences (through advertising) on a consistent and sustained basis to create consumer demand.
McKinney told producers if selling is what they want then the sale barn or local market is where they can go. However, if they are interested in marketing he suggested they look into value-added programs.
These programs, according to him, have been successful because consumers are hungry for quality.
“Value-added programs such as preconditioning verifies health management,” he explained.
“It isn’t that this industry doesn’t trust you, they just don’t believe you,” McKinney said.
The verification comes from the preconditioning protocols which include, vaccination, castration, dehorning, nutrition, weaning and third party verification.
“In order to be successful in this sort of program the producer is going to have to adapt to market changes and be open to new ideas,” Mckinney said.
However, adapting to that change and to new ideas will allow producers to see the health management benefits.
Those benefits include:
•Reduced cattle stress and shrink
•Improved immune system
•Increased sale weight of cattle
•Seasonal price increase
•Increased market demands
Those benefits, in turn, will put money back in the pockets of producers, according to McKinney. That money comes from premiums paid for preconditioned calves.
“Cattle marketed in these kind of programs have seen premiums of $5 to $15,” he concluded.
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