Focus on value of relationships with buyers

Focus on value of relationships with buyers


Commercial
Mort and Co's Berry Reynolds on the job.

Mort and Co's Berry Reynolds on the job.

Aa

Cattle numbers on feed jump.

Aa

THE combination of low grain prices and short cattle supply leading to numbers being retained by lotfeeders longer has seen the grainfed sector exert a stronger presence this year.

The latest cattle on feed figures show an 8.6 per cent rise in the March quarter, with more than a million head now on feed.

While the size of the jump may have surprised some, what it underlines, according to Australian Lot Feeders’ Association president Tess Herbert, is that lot feeding is not just a drought mitigation tool but an integral part of the beef supply chain.

With that in mind, and the herd rebuild now well and truly underway, the need for feedlot steer producers to get their marketing ducks lined up is being talked about more and more.

The value of solid relationships with cattle buyers has been a reoccurring theme at beef industry conferences.

For Australia’s largest family-owned lotfeeder Mort and Co, strong interpersonal relationships with suppliers underpin mutual benefits.

Mort and Co runs three feedlots at Dalby and Millmerran in Queensland and Delungra in northern NSW, with an annual turnover of around 200,000 head.

The flagship feedlot, Grassdale, near Dalby, has recently expanded to cater for 52,000 head at full capacity.

Speaking at the recent Angus National Conference in Ballarat, private client manager Berry Reynolds outlined how the company has taken the approach of establishing strong interpersonal relationships which deliver carcase feedback, genetic advice and market information that allows both the producer and Mort and Co to benefit.

He posed the question to delegates: Do you have a transactional or interpersonal relationship with your customers?

Transactional, Mr Reynolds explained, was where partners do things for each other with the expectation of reciprocation.

The best price wins on the day – where one party gets played off against the next.

“There is nothing wrong with that scenario - that’s business - but at the end of the day, what we are looking to build are interpersonal relationships,” he said.

This is a strong, deep and close association between two or more parties and Mr Reynolds argued it was key to long term sustainability for most of those along the beef supply chain.

Mort and Co creates these type of relationships with its suppliers primarily via customer feedback and support.

“We monitor performance and provide feedback directly to the producer, with the aim of helping to educate which traits are the most important for particular markets,” Mr Reynolds said.

“If we can prove through feedlot performance that certain cattle are 20 cents better than the average, then let’s share that with the purpose of replicating it in future lots.”

Mort and Co also has a policy of being at their suppliers’ beck and call when it comes to market information.

“We are talking to processors on a daily basis, we have a feel for the market so when producers call and ask what is your gut feeling, should I sell, we are more than happy to pass on this information,” Mr Reynolds said.

Experienced cattle buyer Richard Eldershaw provided a neat list of hints for buyer relationship building at this year’s Australian Wagyu Association conference in Albury.

Wagyu F1 production is expected to grow strongly in coming years, to the point where questions have been asked about whether feedlot capacity will be able to keep up.

So it was timely for Wagyu steer producers to be thinking hard about marketing, Mr Eldershaw said.

His most recent position was managing the procurement of Wagyu cross cattle for the big Rangers Valley feedlot in the NSW New England.

Research the market was his first piece of advice.

“There will be a backgrounding segment develop but at the moment most Wagyus are being sold direct to the feedlotter or processor,” he said.

“There are six to eight Wagyu buyers you can talk to - get their specs, tell them what you have got coming and identify who you can likely work with and then keep in touch with that person.

“Listen to what they are saying and breed what the market wants in terms of genetics, weights, dehorning.

“Produce in viable volumes.

“If you have good cattle, you’ll be a valuable supplier - all buyers want cattle that will perform.”

Mr Eldershaw urged producers not to ask for firm quotes if the cattle werent on the market.

“Be upfront and ask for general market guidance instead,” he said.

While the Wagyu breed had witnessed some great price discovery through online marketing platform Auctions Plus, as production grows and the market stabilises, Mr Eldershaw felt breeders would “really need to develop relationships.”

Aa

From the front page

Sponsored by