"The average seedstock producer in the US stays in business for 5 years.
There are 3 scenarios:
There are 3 scenarios:
- They come in with money - and discover it's not as much fun as they thought it would be.
- They come in with ideas - and run out of money.
- They come in with cattle - and realise they are not marketers."
Ryan Petersen from Leachman Cattle of Colorado (LCC) showed me around Leachman cows and calves grazing near Laramie in Wyoming. Leachman's sell 1200 bulls a year - 80% of them composites, and mostly bred by their co-operators.
Ryan says: "LCC had a 3000 acre ranch up in Montana with a further 10,000 acres on lease. Now we don't have all the overheads of running a ranch and can concentrate 100% of genetics. We are in the genetics consulting business."
The Leachman breeding goal is pretty straightforward - to make more profit in the whole chain. They have developed a $Profit index that takes into account of the main revenue and cost traits from the cow/calf producer right through to the feedlot. This takes in growth, carcase, fertility, calving ease and feed intake. More on that in a later post.
Ryan says: "LCC had a 3000 acre ranch up in Montana with a further 10,000 acres on lease. Now we don't have all the overheads of running a ranch and can concentrate 100% of genetics. We are in the genetics consulting business."
The Leachman breeding goal is pretty straightforward - to make more profit in the whole chain. They have developed a $Profit index that takes into account of the main revenue and cost traits from the cow/calf producer right through to the feedlot. This takes in growth, carcase, fertility, calving ease and feed intake. More on that in a later post.
The Rempe family from Nebraska are one of these co-operators. They started with Herefords 3 generations ago, bred into Red Angus, then became co-operators producing Simmental x Red Angus bulls, and ultimately Stabiliser composites for Leachmans. 100 embryos from their herd came to the UK last year. They are a lovely family, have a productive ranch and one look over their 500 cow-herd lets you know they are great cattlemen. Jim doesn't seem like a natural salesman to me, although son Sam has more of a flair in that direction, he has a part-time off-farm job with LCC where he manages the semen division and is the Eastern Nebraska sales representative and breeding advisor. Jim says "being a co-operator works well for us - we can do what we are good at - stay at home on the ranch and raise cattle."
Father and son team, Gary and Garrett Roland are co-operators too. They are both born marketers, and LCC are making use of there skills, with Gary as head of the sales division and Garrett (a former herdsman at Leachman HQ), in the sales team too.
Gary explains that LCC has about 50 co-operator breeders like them, who use LCC bulls and semen and send bull calves into test (many of them now tested for feed intake), and towards one of the bull sales.
When I asked Gary what the most important thing he was looking for in a co-operator I thought he was going to say something about the cow herd genetics, but his answer surprised me: "Honesty, integrity," and after a pause, "....and a degree of intelligence."
My impression of Leachman's was that they were really good at marketing - there are lots of glossy brochures and catalogues with pictures of fat cattle and men with big hats and some fantastic phrases and one-liners about cattle profitability and bulls. The bull sales sound like they took a lesson from the banks on corporate hospitality before the crash! There is a great sales team, who can really 'talk the talk'. But behind all that, the cows I saw looked like they were 'walking the walk' - great cattle, run by great cattlemen.
I think although Gary is the ultimate salesman, when he finally stopped trying to sell me something after a couple of hours, he summed it up the bottom line nicely: "Seedstock is too transparent an industry for crooks to last in business for long. This job is all about helping us all to be low-cost producers."
Gary explains that LCC has about 50 co-operator breeders like them, who use LCC bulls and semen and send bull calves into test (many of them now tested for feed intake), and towards one of the bull sales.
When I asked Gary what the most important thing he was looking for in a co-operator I thought he was going to say something about the cow herd genetics, but his answer surprised me: "Honesty, integrity," and after a pause, "....and a degree of intelligence."
My impression of Leachman's was that they were really good at marketing - there are lots of glossy brochures and catalogues with pictures of fat cattle and men with big hats and some fantastic phrases and one-liners about cattle profitability and bulls. The bull sales sound like they took a lesson from the banks on corporate hospitality before the crash! There is a great sales team, who can really 'talk the talk'. But behind all that, the cows I saw looked like they were 'walking the walk' - great cattle, run by great cattlemen.
I think although Gary is the ultimate salesman, when he finally stopped trying to sell me something after a couple of hours, he summed it up the bottom line nicely: "Seedstock is too transparent an industry for crooks to last in business for long. This job is all about helping us all to be low-cost producers."
Kit Pharo, of Pharo Cattle Co. also in Colorado must be almost the nemesis of Lee Leachman, but they are doing so many things the same way. Kit is another great marketer, he has set up a co-operator structure to bring more cattle into his breeding program and sale; he puts in the speaking engagements, publishes the brochures and newsletters; he has developed a clear breeding goal and recording system to deliver it.
But at PCC it is all the opposite of LCC. The bulls aren't sold fat - they are off grass (and the stuff in the picture is the greenest and lushest it's been for many years in Eastern Colorado by the way), the catalogues aren't glossy, the bull sale has no hype. Even the test-centre is at opposite end of the scale - where Leachman's is part of the respected Colorado State University, Pharo says his cattle are tested on the 'Father Time / Mother Nature System'.
But at PCC it is all the opposite of LCC. The bulls aren't sold fat - they are off grass (and the stuff in the picture is the greenest and lushest it's been for many years in Eastern Colorado by the way), the catalogues aren't glossy, the bull sale has no hype. Even the test-centre is at opposite end of the scale - where Leachman's is part of the respected Colorado State University, Pharo says his cattle are tested on the 'Father Time / Mother Nature System'.
Kit is not following the mainstream, he has been going his own - low input - way for years. He encourages the rest of us to leave the status-quo and become 'Herd-Quitters' - that is to drop the herd mentality and think for ourselves. His principal is to let the cow get on and do her job - by herself, with very low inputs. The 'solar bulls' that come out of the PCC system are smaller framed, easier fleshing type cattle than what he describes as the mainstream 'diesel bulls' bred on high input systems.
His views on co-operators are "When there are other people doing the same as us, we bring them into our program - it's better for us to work together than to compete. Overall there will be 2500 - 3000 cows in our program, producing 800 sale bulls per year". Kit has the skills to sell that number of bulls, and his share of the market is growing. He has put the breeding program together and is using co-operators to help grow his production to meet the market.
When I asked him what drives him to keep getting bigger, he replied "I don't like leaving money on the table, so long as the folks want the bulls."
His views on co-operators are "When there are other people doing the same as us, we bring them into our program - it's better for us to work together than to compete. Overall there will be 2500 - 3000 cows in our program, producing 800 sale bulls per year". Kit has the skills to sell that number of bulls, and his share of the market is growing. He has put the breeding program together and is using co-operators to help grow his production to meet the market.
When I asked him what drives him to keep getting bigger, he replied "I don't like leaving money on the table, so long as the folks want the bulls."
So what are the similarities in these two successful bull breeding businesses?
It has been a great privilege to meet these cattlemen and see their stock.
- They both are passionate about their different visions about the future of the beef industry.
- They have developed their vision into clear breeding goals.
- They are both very good at communicating their vision.
- They have attracted a following and incorporated the best of them into their team.
- ...and they keep good cattle
It has been a great privilege to meet these cattlemen and see their stock.