In 2010, five Lethbridge-area cattle feedlot owners formed a partnership called Allied Marketing Group (AMG). The AMG membership includes Ryan Kasko, Les Wall, Ed Stronks, Leighton Kolk and Shawn Murray, who collectively manage 11 feedlots with a one-time combined capacity of 110,000 head.
The goal was to share information and individual feedlot data in order to advance their feeding efficiencies and marketing opportunities. The November announcement of the AMG partnership with the Certified Angus Beef program is an extension of the kind of efficiencies that the group is aiming for.
“We’ve built a data base within the AMG group by compiling the information at the feedlot level and then correlating it with the carcass data from the packing plant. We feel that this new partnership with CAB will help us build stronger relationships and partnerships at the cow/calf level,” says Ryan Kasko of Kasko Cattle Co. at Coaldale.
“Our AMG group is comprised of all friends, and we have been working together for a few years on various projects. We’ve shared information trying to improve our operations on the production side, marketing, employee training and safety – all the things it takes to run a feedlot operation.”
The CAB program demands higher quality beef grades in the upper AAA for marbling from Angus based black-hided cattle. To some extent, the AMG group is already supplying these cattle through their marketing efforts into Cargill at High River.
“The CAB program is all about sharing research information about feed efficiencies and genetics and this is a great opportunity for us to communicate that information with producers,” says Kasko. “We believe that more producers will see this CAB partnership as a new opportunity to align their production with a proven marketing success.”
“Currently, the members of our group individually source cattle from producers that we know can supply a higher quality graded product. We estimate that about ten percent out of twenty percent of the black-hided Angus cattle in western Canada already meet the CAB program specs, but there is room for that number to grow substantially.”
“Ranchers focusing on a high propensity to marble that produce animals with a high growth potential will reap rewards at sale time. The sharing of information between the cow/calf producer, the feeder and the packing plant is a new dialogue with the opportunity to improve carcass quality at the feedlot and the producer level.”
The partnership agreement between CAB and AMG is the first in Canada. Kasko says that CAB’s relationship with retail and restaurant licensees across Canada can help feedlots and groups like AMG gain a better understanding of consumer wants and needs.
“CAB has seen record sales in seven consecutive years worldwide with a strong growth in sales in Canada,” says Larry Corah, vice president of supply development for CAB. “Production in Canada moved up by 5 million pounds and sales were also up seven to eight percent. Growing demand bodes well for market premiums.”
He adds, “When you’re feeding commodity cattle, you go with all the experience and visual clues there are. When you feed cattle for the same customer over the years, getting individual carcass data and consulting with the ranch on what needs more genetic focus or shifts in management – then you are less likely to over- or under-feed. It’s a huge advantage in determining the right time to market these cattle.”
At the level of 700,000 to 800,000 identified black-hided cattle at CAB-licensed Canadian plants, a small increase in acceptance rate has a big impact. If more Angus-type cattle are channeled through feedlots that work with ranchers to improve marbling and other carcass traits, that could put more of the available 1 million head into CAB-licensed plants.
In the U.S., for instance, grid-marketed cattle accepted for CAB earn, on average, $40 per head premiums. CAB says that premiums are now starting to be paid in Canada, so ranchers who select for Angus quality that meets the CAB requirements should discuss access to premiums with their potential feeding partners.
Are the lower numbers in the North American cattle herd affecting Alberta feedlot numbers?
“There are a lot of cattle around this fall,” says Kasko. “Since Tyson Foods in the U.S. said they won’t take finished cattle from Canadian feedlots because of Country-of-Origin labelling, there are more cattle being finished here. Also, a number of significant feedlots have either reduced their pen space or closed their doors. We expect to see an impact of the COOL in the spring. The Americans don’t want our freshly weaned calves but will take the backgrounders. Tyson will buy Canadian finished cattle from American feedlots which certainly puts us at a disadvantage.”