"Reputation" sales show promise for regional calf clubs

Sunday, March 3, 2013

The requirements can be challenging for producers and the numbers are still small, but proponents see the ability to demonstrate that vaccination and other protocols have been followed as a valuable marketing tool

by MARY BAXTER

You could really hear the pride in his voice when Dan Darling, president of the Ontario Cattlemen's Association (OCA), began talking numbers relating to regional feeder enhancement clubs.

From 2010 to 2012, the OCA tapped into funding from the Agricultural Management Institute to hone and expand the clubs hosting "reputation" sales based on vaccination protocols. During those three years, the number of clubs hosting such sales grew to 11 from four. "We all are hopeful that we will be able to access new funding sources in the upcoming year to build on the success of this project," Darling told producers attending January's Ontario beef industry convention.

With the past season's drought, rising hay prices and an anticipation of a cow/calf shortage in coming months, it's no wonder the program was a bright spot in Darling's convention comments. Talk to anyone involved with the specialized sales and they'll eagerly point out the merits.

Yet, despite their promise and three years of promotional efforts, the specialized club sales account for only a small percentage of calf and backgrounder sales in the province – about six per cent of the 290,000 calves sold annually through the province's auction markets. Sometimes, however, the numbers don't have to be big to signal success. "It's working," says Dan Ferguson, OCA's manager of producer relations. "The consigners were happy; for the most part we haven't heard anything big and negative from any buyers."

The program was inspired by the four Calf-O-Rama calf club sales that take place in the same week in October at the Keady Livestock Market in Grey County. Regional and, in some cases, breed-specific clubs organize the sales: the Bluewater Black Calf Association, Bruce Peninsula Calf Association, Central Calf Association and Georgian Bay Calf Association.

What has distinguished the clubs from others is the decision to sell the animals with the guarantee that certain protocols have been used. Most of these address vaccination – not just for the calves but also for the herd – and the use of live vaccines. They also involve items such as age verification, dehorning and "bunk adjustment" (getting the calves used to eating feed). The goal is to create "attractive-sized lots," as the groups' shared website explains, that can offer a better than average price at sales.

"It's been a successful story," says John Mielhausen, president of the Bruce Peninsula Calf Association. "A lot of sales barns in Western Canada watch to see what our sale does and the breed associations are very interested in how we run it." Follow-up study on the sales shows the approach brings, on average, a $60 premium for a 600-pound calf for spending about $12 on vaccines.

The groups also pay Chesley veterinarian Peter Kotzeff a small fee per animal sold to track the health of the animals after sale. He also verifies compliance with the protocols. The cost has been small in comparison with the data that it has been able to generate to back up claims that they are producing healthy animals. Statistics that Kotzeff compiled in 2011 from 25,659 of nearly 28,000 calves sold over the 10 years at the four sales indicate that less than one per cent were "deads," "poor doers" or "chronics." Buyers had to treat 9.2 per cent of the animals once and 1.7 per cent of animals more than once.

The OCA program, with the assistance of the Institute funding, offered supports to producer groups to launch sales, tighten the requirements on existing sales where vaccination was already featured, foster information exchange through meetings and pasture walks and take advantage of promotional materials, such as sales catalogues and even Internet auctions. Although there was recognition among producers about the success of such sales, "not everybody wants to jump on the full program," Ferguson says.

He acknowledges in January, that current prices make it challenging to convince producers about the marketing advantages of the specialized sales. "Everybody gets a good price whether you've done the extra marketing or not because there's a big demand for calves," he says. "So even a calf that's naive – hasn't had its needles – can still give that farmer bragging rights to say, 'I've got the best price I've ever got this year,' just because of the cycle that we're in."

Wilbert Rowntree, a Haldimand County producer, is convinced, however, that the specialized sales are a key marketing tool for the Ontario industry. "The way the beef market is with exports and stuff like that, I think we need to keep doing as much as we can to keep our global markets," he says. That means proper vaccination, keeping good records and age verifying, "so we don't get these health issues. I think it all works together."

When funding became available in 2010 to establish a local sale with protocols, Rowntree knew it was a "perfect" venue for his animals. He already had his herd of about 30 animals on a vaccination protocol. "I didn't have to change anything that I was doing."

He became one of six founding members of the South Coast Calf Club (there are now seven members on the board). The club used the Institute funding to hire Rowntree as well as Brant County beef producer Sandra Vos to encourage producer involvement. It also paid for advertising and printing brochures, pamphlets and other promotional materials.

As well, the club made videos of the calves to be included in the annual sale and posted these in advance on its website. However, live Internet streaming of sales, something that other calf sales have begun to use, wasn't an option because the technology isn't available at the Hagersville Auction Centre, where the annual sale takes place in November.

At the South Coast sale, calves must be vaccinated using a modified live vaccine, dehorned, castrated if steers, age verified, weaned at least three weeks before the sale and dewormed.

The requirements can be challenging for producers. Some don't have the facilities to vaccinate or to wean calves and keep them separate for three weeks, Rowntree points out. When a cow herd receives a live vaccine protocol for the first time, the animals must not be already bred and "that's an issue for some producers because they never remove their bull from the cow herd." Then there's the organizing and record-keeping involved.

The club has offered to help local producers with some of these activities, such as helping them to register their animals for age verification. It also hosted a pasture walk in 2012 using the program funding.

So far, sales numbers are a far cry from the roughly 4,000 animals that move through the four Keady annual sales. It sold 149 calves in 2010 and 142 in 2011. With the problems created by last year's drought and high feed prices, the number dropped to 118 in 2012. (Two producers sold their animals in advance of the sale and another producer failed to get his calves vaccinated in time because of other commitments, Rowntree explains.) Yet right from the start, the club set a modest goal: 200 calves, the capacity of the sales barn.

Now that funding has ended, the club is looking at other ways to continue the sale. They have been charging a $75 membership fee per consignor with the idea of using the money to pay for catalogues and brochures. In the spring, the club plans to meet with all of the consignors to talk about other costs and how to manage them.

There is also the possibility of eventually promoting the animals on a website developed by the drug company they use for vaccines. The website lists calves for sale across Canada. That's an option down the road, Rowntree says.

How the reputation sales will continue across the province in the future is a challenge, says Ferguson. Some clubs have obtained support from the drug companies that supply the vaccines or have collected a fund to work forward. Supporting promotional tools, such as the live Internet streaming of sales, may need an increased commission for the sales barn to support them, or more funding or sponsorship.

However, Ferguson says, just as important as the calf sales themselves is the idea that producers are taking a stronger role in marketing their calves. "That's what we tried to sell the program as – moving from selling a calf, which means you put it on a truck and you wait for your cheque.

Marketing means you've actually done something proactive to make sure the buyer knows what you've done and the sales barn advertises it, and you get extra value out of that type of information exchange." BF