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Cargill Paying Huge Premiums . . .

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Maple Leaf Angus

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Well that sure got your attention, didn't it!

Maybe I should leave it up to you to decide just how Huge this Premium is.

Better Beef-Cargill Meat Solutions has announced that they are paying $10.00 per head for age-verifiable cattle 20 months and under. WOW!

Consider this: RFID tags cost almost half of the "PREMIUM" being offered, an RFID tag alone is of no value for visual field identification of animals so an additional dangle tag is required, recording the D.O.B. at home and at the CCIA takes extra hours, plus the fact that when selling calves (like we did last fall) there is no payback for the extra work.

And these great-hearted people at Better Beef-Cargill Meat Solutions are offering $10.00 per head premium for all this? Looks like they are pretty much following the pattern of the old company they bought.

Instead of paying us 75% of what it costs us to do the record keeping, I am demanding that they pay us 75% of their additional income on the age-verified carcasses that they are exporting to the Asian market.

Unfortunately, the usual mentality is that "ten bucks is better than nothing, so I'll take it . . ." and many feeders will accept it.

At present, I have an inquiry in at the OCA office to discover how much potential extra value an exportable animal carries. Maybe it's only ten bucks and they're giving it all back to us!

:lol2: :lol2: :lol2: :lol2:
 

Big Muddy rancher

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It might not seem like much but I have fed cattle where I wish I got ten bucks profit. The RFID is going in any way and the record keeping is just about as minimal as you want to make it. What will they pay if it becomes mandatory? If they can't find the cattle they will have to offer more.
 

elwapo

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I registered the birth dates on my calves before I took them to the market this past fall. I gave the age verification form to the auction when I delivered the calves. When they sold no mention was made about age verification by the auctioneer on mine or any others that I knew were registered. If there is a premium it sure is not the producer that is seeing it!!
 

Maple Leaf Angus

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I will RFID tag my calves again this spring as well as record their birth date. But I will only register and submit their ages to the buyer when I have an agreement for at least half of any premium those cattle receive when marketed.

That might be hard to do, so I guess I would agree to a $ per head figure.


I, too, have fed cattle for less than ten bucks a head, BMr, but I refuse to help the packer make a profit on my labour and investment without fair compensation for it. He can stick his offer . . .

I forgot to add in the original post that the packer can change the amount of the premium any time he wants. I can only assume that it would mean higher LOL.
 

Big Muddy rancher

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Brad Wildeman told me that Cargill in Alta. was offering $20. So i guess they can change. Go for it. deal with the feeder. Nobody said you couldn't try. I to age verified my calves that i sold last spring. It was mentioned and the calves sold well as did my yearlings last fall. Did i recieve a premium? I don't really know. At the sale yesterday there was 3 packages that sold as age verified. Nothing else to compare to.
I still think that we need to keep age verification vouluntary or we will be doing it for no premium.
 

Northern Rancher

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So Maple Leaf are you going to be on the hook for half of any loss also-I've had this argument with my heifer suppliers-most guys are willing to share premiums but not too many will risk sharing in a loss.
 

Maple Leaf Angus

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That's an interesting and fair question. And probably much bigger than being only about premiums.

I have had to wonder what all the implications of source verification are. If a major problem is discovered with cattle that can be tracked to your (my) farm or ranch are you (or am I) going to be liable?

I guess my opinion on your question is that if the end user is getting the major benefit from my work, I see little problem with him also taking the major risk in his market. He sure doesn't care about the risk in mine.
 

Big Muddy rancher

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As I understand at most plants they assemble a kill 3-400 head of age verified cattle to have a run for japan. If one animal doesn't make the spec's the whole kill is not able to be used for Japan. That could be a added cost to assemble cattle for the Japanese.

I think because Better Beef has 2 lines that they can work around that some.
 

cowsense

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MLA- At present you definately have the option to not age verify-We do and I do know of feedlots that are willing to pay a premium for age-verified cattle so they can assemble complete pens. The premium isn't large but it helps! I cannot state how strongly I feel that this is one more step to help guarantee a stronger export market that our ENTIRE industry needs to survive and prosper. There are forces advocating compulsory age registration and while it would help exports it would definately remove any chance of a market driven premium.
 

Mike

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I still think that we need to keep age verification vouluntary or we will be doing it for no premium.

It will become an expected practice of everyone shortly. The premium will be that you can sell them for human consumption.

The others will go for dog food.
 

Maple Leaf Angus

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Well, after doing a little more research, I realized that I just went off half-cocked here in my usual hot-headed manner. Not that I am necessarily wrong in what I think about being paid for the effort it takes to meet age-verification.

What I have discovered after making several phone calls is that while the export market is lucrative, it also comes with some significant costs attached.

At present, Japan is only what is called a 5-cut market, which means that they take only certain parts of the carcass. The interesting thing is that they take the cuts that are of low value in our own market, so that's a plus for the packers, for sure.

The catch is the amount of work involved in retrieving those cuts. None of the people I spoke with could give me even so much as a ballpark figure on what extra value might be added to a carcass because of the export opportunity. But apparently the rise in the value of those cuts is significant.

BMr, you said it the best, one needs to go for whatever he can get for A.V. cattle, whether its the calf producer or the feeder.
 

sw

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We had this discussion yesterday with a packer. At present they (Swift) are paying $6 for source and age verification. Not much now, but when and if Japan opens and McDonalds demands source and age verified, the premium will go up, and non verified cattle will be discounted heavily. He feels that the beef market is going to go in two directions, verified at a premium and non verified discounted. We were also told that McDonalds is not going to buy hamburger from culls, only fed cattle, so they are going to get what they want. Walmart which only sells select product will be buying up the discounted beef that they can then sell for less. I also learned that Walmart only buys from Tyson, unless they can get something that did not make a grid from somebody else that they can buy as cheaply as possible. Just wait till everybody quits buying beef because they buy that cheap stuff and it isn't any good so the go back to chicken.
 

PPRM

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I have heard the discount for non age verified will be steep. I hope so, I have a good market for this if it is so,


Pat
 

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