Commercial Connection
by Dave Steen

Full Service Genetic Providers

Spring bull sales are winding down and acceptance and demand from the commercial sector has been overwhelming, as nearly all sales have set all time highs in sale averages. I’ve had the opportunity to work with a number of “new” producers who have purchased anywhere from one to 16 bulls for their operations. These producers purchased Maine-Anjou bulls because they like the look of the cattle, want more performance, heavier weaning weights, improved carcass traits and cattle with maternal value. I want to compliment the seedstock breeders who put together these outstanding bulls, as the commercial producer is readily accepting them. As seedstock producers, our success depends on continued sales. Customers are our business, so whatever we can do to keep them profitable and in business will benefit us all.

     With the buying demands of the public, we’re hearing more about Full Service Genetic Providers (FSGP) and the opportunities they provide to their customers. Maine-Anjou seedstock breeders are doing a great job providing the needed services to build a good customer base and secure future business relationships. Personal relationships and trust are built over time and the outcome benefits all parties involved.

     The following information on FSGPs is printed with permission from Dr. Harlan Ritchie, Professor of Animal Science at Michigan State University, East Lansing, Mich. Thanks to Dr. Ritchie for the use of this information.

     Dr. Ritchie predicts within the next ten years customer demand for more service and more genetics will change the beef seedstock business forever. “

     Generally, everybody can provide similar genetics now. All seedstock producers have the opportunity to build their programs to include wonderful genetics and EPDs. That means service will become a bigger and bigger item,” says Ritchie, who is a long-time seedstock producer himself, and a trusted industry analyst of breed and breeder trends. “When you look at the larger breeders, the movers and shakers, they already have superior genetics. It will take more than superior genetics to be on top of the game.”

     Ritchie explains, “I think we’re going to have a new acronym in the seedstock business: FSGP (Full Service Genetic Provider). These will be large breeders, likely producing more than one breed of cattle or hybrid. Or, these will be smaller breeders comprising larger systems, allowing them to produce, market and provide customer service like large breeders can. “

     Even now, mainstream commercial cattle producers are reluctant to attend an auction sale that isn't offering at least 200- 300 bulls,” says Ritchie. “Let’s face it, commercial producers are demanding a sizable cafeteria of genetics and services to choose from and it’s going to take a large entity to provide what they demand. Smaller seedstock producers, including myself, have to recognize that.”

     Plus, Ritchie says, “FSGPs now, and in the future, provide customers with a host of informational tools and consultation on everything from herd health and nutrition to breeding schemes and marketing.”

As an example, Ritchie explains, "Commercial customers are going to need help from their seedstock suppliers in fitting EPDs to their specific production and marketing environments, and perhaps fitting that information into selection indices. “

     Really, as a group, these full service providers will be like a mini extension service,” says Ritchie. “They will offer customers a wide array of products and services, and some of these services will be offered in concert with the breed associations. Breed associations will help full service providers offer some of these services.”

     Moreover, based on anecdotal evidence and gut observation, breeder consolidation is well underway, with fewer than one percent of the nation’s seedstock producers building at least 10 percent, and perhaps as many as 20 percent, of the bulls traded each year.

     Dr. Ritchie emphasizes, “Small breeders will still be able to participate, but to do so they will likely have to be involved in a different model of production.” Short of providing seedstock for an extreme niche market, Ritchie expects the use of current seedstock production and marketing models to grow alongside large seedstock operations.

     "Bottom line, whereas the mantra of success in the real estate business has always been location, location, location,” Ritchie says, “In the seedstock business it's going to be service, service, service.” 

     FSGP is the “buzz word” in the beef industry today. Breeders who can provide this total program will grow to prosper in the business and build an everlasting customer base.
In any business, communication and staying in touch with your customers are keys to building a successful breeding program. Cattlemen, for the most part, are very traditional in their thinking and to make a change in their commercial programs, they need to be comfortable in the decisions they've made. Therefore, as breeders I encourage you to follow up with your customers to help with their needs and concerns. Seal the deal by registering and transferring breeding stock to further create both immediate and future value of their purchase.

     If I can be of help in any way, by contacting or holding meetings with potential customers to share information on the Maine-Anjou breed, please feel free to give me a call at (515) 201-3281.

Breed with Direction!

Maines on the Move,

Dave Steen AMAA Commercial Marketing Director