Get Rewarded for Your Calves, with Doug Stanton and Troy Marshall

You put a lot of thought and effort into your calves' genetics and management. Why not get paid more for them? 

IMI Global's Doug Stanton and American Angus Association's Troy Marshall chat with Shauna about opportunities for earning more premiums for Angus calves. 

They answer: 

• What kind of programs are available?
• How do you get started?
• What kind of premiums are they seeing, even in a high market?
• And more!

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Transcript

Shauna Hermel:
Hello and welcome to this edition of Angus at Work, our podcast for the commercial cattlemen using Angus Genetics. I'm here today with Troy Marshall, our director of commercial strategy for the American Angus Association, and Doug Stanton, and we're going to talk about Angus Link and the new relationship that Angus Link has with IMI Global. We've seen some amazing statistics here to start out this summer. And so I'm going to turn it over, Troy, can you give a little bit of your background and just tell a little bit about yourself and then we'll let Doug do the same?

Troy Marshall:
I was an Angus breeder for about 25 years and been active in the industry and then the last three years, as you mentioned, I've been the Director of Commercial Industry Relations here at the Angus Association, working primarily with the Angus Link program and getting that up to speed. So that's kind of my 30 second elevator pitch.

Shauna Hermel:
Doug, how about you? Tell us a little bit about yourself and your role there at IMI?

Doug Stanton:
You bet. Prior to coming to IMI Global, I was 25 years in the feed and nutrition consulting business. I've been with IMI Global in a full-time role since 2007. I've had different roles within the organization, and today I am in charge, I'm the Vice President in Sales and Business Development. And so that's where the relationship, I was involved in the relationship collaboration that we're having with the Angus Association and Angus Link.

Shauna Hermel:
Excellent. And we did announce that back in January that Angus Link and IMI Global would be partnering here on doing some of the verification services for the process verified programs. Can you explain a little bit about how that partnership is set up and what it means to commercial cattlemen?

Doug Stanton:
Yes. We are managing, as this collaboration partnership that we are calling it, we are managing the PVP, which would be the USDA Process Verified Program side of things. So we are managing the source and age verification, NHTC, and then the verified natural beef side of things. Then the Angus Association is then collaborating and verifying the claims for the programs of Angus Verified and GMS, the Genetic Merit Scorecard. So as we've all talked about it over this time through this collaboration, it's kind of both groups are in their own lanes now, as we put it, that we're managing the verification business with the USDA programs for the Angus producers that Angus Link was working with in the past, and we've been in that business as I mentioned, since 2005. So that's kind of our role. And then Angus is involved with the verification on the genetic side, which is as a breed association is obviously their role in this equation and this partnership.

Shauna Hermel:
Before the partnership happened, now there were actually two different verification services, one that the Angus Association did, and then one that IMI Global did to verify genetics. Is that true? And those have merged?

Doug Stanton:
Yes, correct. We previously had a program called Black Angus Verified Beef, and we were verifying Black Angus genetics with our commercial cow-calf customers. And now with the collaboration, then we've merged those two programs all under Angus verified.

Shauna Hermel:
Now, how does a person get in touch with you or with the team to start an enrollment process?

Doug Stanton:
They can get started either on our website at IMIGlobal.com or they can contact our office in Castle Rock, Colorado. That can start the process. And then what we usually do is we get a application out to them and then see what programs they're interested in and if they're interested in Angus Verified or Genetic Merit Scorecard, then we send that application along with that and gets the process started.

Shauna Hermel:
Okay. Troy, can they come in on the American Angus Association side and contact somebody at the association to get the ball rolling? Or how does that work?

Troy Marshall:
If they have any questions about Angus verified or the Genetic Merit Scorecard, we'd be happy to answer those. So they could start there with us. And we have links on our website too that will take them directly to the IMI site to get the process rolling. IMI does administer the program, but we're happy to at the beginning phases to get anyone that's got any questions and get them set up with IMI, we'd be happy to facilitate that.

Shauna Hermel:
As far as enrollments happen, how long does that take now for an enrollment to, once you decide you want to take advantage of these added value programs and you call somebody at IMI Global to get the ball rolling, how long will it take to get a set of calves enrolled and how much time should I leave ahead of when I want to sell a group of calves to get this process undertaken?

Doug Stanton:
We like to allow four to six weeks because it depends on the verification programs that program a cow-calf producer wants to be involved in, but if they want to be involved in the NHTC or our Natural Program or our Care Sustainability platform, then those require onsite audits. And so we'll have to schedule an auditor to come onto their operation and go through the approval process prior to them either being in a video sale or shipping the cattle off to their operation. Either way, that would have to occur prior to them doing that. So we'd like to allow that time. We've had to expedite ones obviously faster than that when required, and we try to facilitate as much as we can. We have onsite auditors throughout the country and continue to add auditors as we go, especially with the new partnership with the Angus Association so that we can accommodate their needs, but we always need a little bit of a timeframe to work with and get that scheduling done so that they can market their cattle with the programs they want to.

Shauna Hermel:
And I maybe should have ask this question to begin with, but just why should a commercial producer entertain the thought of trying to become enrolled in one of the Process Verified programs or Angus Verified and the Genetic Merit Scorecard? I'll let both of you answer that question. But Doug, if you'd start with the PVPs?

Doug Stanton:
Yeah, I'll let Troy handle the Angus Verified and GMS, but on the Process Verified programs, we see premiums in the marketplace, especially on the video sales. Those are the ones we can at least track because it's public knowledge, people can see what the prices that are being paid for those cattle. And we've been tracking those premiums for several years now. If we look at our five-year averages, we can see premiums that are a very good return on their investment for the time commitment that they had to put in for these value added programs. So, and Troy and I were discussing it earlier, even with the elevated prices that we're seeing in these summer sales this year, and probably we'll see again next year, we are still seeing additional value for these programs above and beyond these record prices that we're seeing. So we feel like that whether it's a strong market, a weaker market, over the years we've seen the premiums and these value added programs really stay about the same, in some cases larger over time. We feel like it's been a very good return on investment of their time and commitment.

Shauna Hermel:
Excellent. Troy, how about for the Genetic Merit Scorecard and Angus Verified?

Troy Marshall:
Yeah, I just wanted to echo what Doug kind of said in terms of the return on investment's been really good historically, and I think any of the producers that are already qualified for those programs or have the records to be able to participate in, whether it be the NHTC, All Natural, the Care Program or the genetic programs, it's been well worth it for producers to do that from a cost standpoint. Of course, we're pretty excited. We feel like the two best ways to improve your overall profitability from a marketing standpoint is to increase your access to markets. And you can do that by having access to these other programs there, just giving you more buyers actually is what it turns out to be.
And on the genetic front, we know there's value in Angus genetics and there's a lot of black-hided cattle out there in the industry, and that's what the Angus Verified Program does is it allows producers to differentiate their cattle and separate them from other black-hided cattle and give those buyers some confidence that they're actually buying Angus genetics in the marketplace.
And the scorecard really just takes that to another level beyond Angus Verified in that it gives you an objective, reliable way to describe the genetic merit in a pen of feeder cattle. And the one thing we've seen with higher feed costs, the higher premiums for quality grade and just higher prices in general when it comes to carcass weight, et cetera, that the value of genetics has never been higher than it is today. So what we're trying to do with the Genetic Merit Scorecard is really get genetics into the pricing equation for feeder cattle. And we've seen from a buyer standpoint, they see it as a great opportunity, not only to know what they're buying, but also from a risk management standpoint.

Shauna Hermel:
Can you expand upon that a little bit as far as the risk management, what you're seeing there and why are feedlots becoming more concerned about the actual genetics of the cattle? Well,

Troy Marshall:
Well, to give you an idea, just a 10% improvement in feed conversion with today's cost of gains running around a $1.30, that's nearly a $100 bill, between those, an extra 30 pounds of carcass weight, which really is not that extreme when you look at our numbers and the variation we're seeing within the industry, that's another $100 bill. It's not unusual with from a quality grade standpoint to pick up $100 to $150 on these grids with the premiums we're seeing today. When you're paying what you are for cattle, the ability to know what you're buying, manage those cattle effectively target them towards the right end market, and then when you have that $200 to $300 cushion on these better genetics compared to the average, that's a pretty good risk management tool for those buyers out there just being able to manage the risk and manage the quality of cattle coming in there so they maximize their returns.

Shauna Hermel:
You bet. And can you talk a little bit to the validation maybe that we've had on the Genetic Merit Scorecard and the scores of those cattle and how they actually feed and grade?

Troy Marshall:
Yeah, it's probably been one of the most exciting things. We've got data now on over 125,000 head of cattle that have had the Genetic Merit Scorecard in their actual carcass data in real world settings. It really does a tremendous job of predicting how those cattle are going to perform in the feed yard and on the rail. Commercial buyers know when they buy bulls that EPDs do a great job of predicting the performance of those bulls or the genetics in those bulls. And what we're really doing is taking those genomically enhanced EPDs and we're essentially creating an EPD for a pen of feeder cattle. And so what we're able to do is predict using the traits like dry matter intake, average daily gain, post weaning gain, carcass weight, marbling, ribeye, et cetera. We can predict with quite a bit of accuracy those pens of feeder cattle. And that's I think the big shift we've seen in the industry is just as producers have seen how the scorecard relates to real world results, that there's a lot of confidence in what those numbers are bringing to buyers of feeder cattle.

Shauna Hermel:
You bet. Doug, you mentioned a little bit on we're headed up in prices and people are seeing some price levels we've never seen on feeder calves, and the tendency might be to back off a little bit and say, well, if I'm going to get $2.78 or maybe even $3 for some feeder cattle, why put in the extra effort to try and go through a verification standpoint? But you made a good comment as far as you're still getting a premium and setting yourself up. Can you elaborate on what you're seeing in terms of some of this video sales that we've seen already this summer? And are premiums staying high? Are premiums backing off on some of those cattle? What's the payoff?

Doug Stanton:
Yeah, and you are correct that you would think the tendency would be for a producer that, at these record values, why should I spend any money additionally for some potential premium? Then we have others that look at it a little different and they'll say, well, based on these record prices, maybe it's a time for me to spend a little money and see how these programs will work out. So we kind of have two schools of thought when we get into these type of pricing, similar to what we saw in kind of that 2014-15 market. Troy and I were talking about it, just based off what we saw last week at both the Western video sale in Reno, Nevada and then also the Superior sale in Steamboat, Colorado that maybe these premiums that we're seeing with these bundled programs are at what they were a year ago or maybe even higher in some cases.

Shauna Hermel:
Really?

Doug Stanton:
Yes, ma'am. And one of the things that we haven't elaborated yet on is that the key to what we have found over the years is for producers to what we call bundle multiple verification programs together, because then they really open up an opportunity for multiple buyers that are looking for different verification programs based on the contracts that they have with packing plants and different brands. That's the key.
I think Troy did a really good job of explaining that with the Angus Verified on these groups of cattle that are already sourced and age NHTC Natural or in our Care Program, that it gives them an additional confidence in far as risk management, as Troy mentioned, that they know what they're buying. They're actually not buying just a group of black-hided cattle. They're buying cattle that are Angus genetics, that have known pedigrees, that have EPDs behind them, and we have some predictability and it helps them on their confidence side of things. And I think bundling all those programs together with the Genetic Merit Scorecard and getting those values, that's where we're really seeing the premiums in that bundling process. And that's what this partnership is really looking at. And I think that's the reward that the commercial producers will get.

Shauna Hermel:
You have quite an arsenal of different PVP programs and different claims. Sustainability has sure become a buzzword and one that people cuss and discuss, but is there a payoff for enrolling in some of the animal care, as we know that that's how our consumers see sustainability as the welfare of those animals?

Doug Stanton:
Correct. Yeah, we've launched a program we call our Care for the Beef Industry, also known as Beef Care to some people. But we launched that three and a half years ago, in early 2020, and we've enrolled about 850 ranches up to this point that represent well over 800,000 head. We looked at our program when we first developed it and we looked at what we should be doing and maybe where the recognition would be needed before we launched the program. And so we took it and presented it to the US Roundtable for Sustainable Beef and they recognized it, that it didn't did meet their framework. And so then we launched the program.
And it really has three components. In addition to animal care, it also has an environmental component, a pillar, what we call environmental stewardship. And then the third one is people and community. Producers really get the opportunity to be able to tell us and that we can convey to consumers the good things that they're doing in their community, things they're doing with their FFA, 4-H, food pantries in their community, et cetera. So it's a well-rounded program, what we feel like, at least in the US based on what the Roundtable's direction is how we define sustainability. And that is a program that can be bundled and now offered to Angus cow-calf producers that they didn't have previously.

Shauna Hermel:
And is that a time-consuming one to try and enroll in? That sounds like it is almost putting a resume together for your herd.

Doug Stanton:
When we sense out the initial information, it may seem a little overwhelming, but we try to make it as streamlined as we can. And the process today starts with a phone interview with one of our account managers and they just discussed with the producer their operation and go through the different indicators of those three pillars that I described earlier and see where their operation is today in relationship to that. And then if there's a need for some additional documentation in particular areas, we offer templates to help simplify that process for them that they can then start help keeping documentation in different areas that maybe they could tell us about it verbally but just didn't have it documented. And so we don't see people a lot with the care program where they have to really modify anything in their operation. It's just now starting to document what they're doing versus just having it where they can describe it to us verbally.

Shauna Hermel:
For a producer who has never enrolled in a program like this, how would you advise them to get started?

Doug Stanton:
Well, I think a big component of the care pillar is BQA certification. We highly recommend that that's a good place to start. If they haven't done that, it's pretty easy to do now, you can do it online, take a couple hours out of your time. Then you'd have a certificate once you've gone through their little quiz, then that's good for three years. And that is what we feel like a big component to animal care for cattle in the US and so we highly recommend that. So if a guy's thinking about it, that's where I visit with producers to get started with the paperwork that we'll get everything set up, but go ahead and get your BQA certification in place. Then that helps them on get started on the program.
And then a lot of it is looking at today, I think the interview process for them that we do on the front side of that really helps them understand where they're at and where they may have some additional documentation they may need to start keeping. And then what we do, it's a two-part process, then we come onsite and then validate things that were discussed during the interview process and then do observations of the cattle themselves and pasture conditions and facilities and things like that that we can't get a good handle on in the interview process.

Shauna Hermel:
How much does it cost?

Doug Stanton:
Actually for us, for our verification programs, it's just a $500 add-on if they're involved in any of our other programs. If they're already doing Natural or NHTC, then it's a $500 add-on to that. What we have found is that once we developed what we call a quality manual for that, customized to that operation from the interview process, then the subsequent years, then they're just updating that quality manual to any practices or anything that's changed in their operation. So that's why we go through the interview process and actually the start to quality manual with that account manager that they then send to the producer based off the way they address the questions during that interview. And that helps get them started off on a good foot that first year. Then after that, it's just a quick interview to see what changes they have made and then we validate it with on annual onsite audit

Troy Marshall:
Just throw in there, Shauna, too on the Angus Verified and scorecard. We really appreciate the fact that IMI here this year has stepped forward and there is no cost to the producers. So IMI is absorbing that to enroll in the Angus Verified or Genetic Merit Scorecard programs this year.

Doug Stanton:
That's correct.

Shauna Hermel:
Oh, excellent. So is there a minimum number of calves that you think a producer should target to have enrolled to make it a worthwhile process?

Doug Stanton:
Well, we talk a lot about the video sales because the video sales are a great place for a producer to be able to present their cattle to a large group of people throughout the country. Now, on the video sales, it requires a truckload, so 50,000 pounds. And now that can be, you'll see on the sales where that steers and heifers, so what they call a split load in order to get to that number. Of course then it depends a little bit on the weight of the cattle. Are they selling calves, are they selling yearlings? Because it's more to do with the truckload weight.
But on private treaty we've seen people that have done less than that in operations that they had even less than 100 head of calves that they market annually. And I think at those levels, you got to depend on the, now, can I go into video sale or am I going to have to go private treaty or to a local sale barn that's approved? That, we also, by the way, verify. We have 25, 30 sale barns throughout the US that are also approved where a producer can market their cattle and keep them approved and go to a buyer.

Shauna Hermel:
So that would be for like a program like NHTC where they have to always be within that, an approved facility or whether that be the farm, the auction market, or the feedlot?

Doug Stanton:
Correct, correct, yes. And NHTC, Natural and our Care Program all require chain of custody in which all operations at the cattle move through are approved for those claims in order to keep the cattle approved for the programs that they were initially approved for at the ranch.

Shauna Hermel:
Okay. And hopefully most people would be aware of that, but I'm sure for people getting started that probably wouldn't happen. Would there be some opportunity for, we see the co-ops of producers working together to, if they're using similar genetics and similar management, try to pull calves. Is there an option for them to come through the PVP programs and market together?

Doug Stanton:
Yeah, it depends on the programs they're involved with that they want to market. If they did source and age and Angus Verified and Genetic Merit Scorecard, then those would not require an onsite audit because those are programs that USDA doesn't require us to come on site to do, we can do that on what we call a desk audit. The fact if they just worked with source and age and Angus Verified and Generic Merit Scorecard, if those are only claims that they focus on, then producers marketing less than 100 head, those kind of programs would probably economically work out for them a little better in that we don't have to conduct the onsite audits, which adds the audit cost and travel expenses to the equation. And then producers that are doing things together where their vaccination programs are very similar and then they are all Angus Verified and sourcing age and carrying an EID tag for traceability, then they could market those cattle together as a group. And we see a little bit on the video sales, but definitely could do that on a private treaty situation.

Shauna Hermel:
So how, if a person is interested in visiting with you about getting enrolled as a first time, when's the best time to start talking to you to give themselves time to consider the options and enroll?

Doug Stanton:
I would say that guys that are doing spring calving this year, here it is mid-July and they will wean in October and sometimes they'll wean and ship or background for a period of 45 to 60 days. It's a good time to start in that process now, at least contacting us and talking about their opportunities and their options, what the cost of those different options would be in their situation, when they plan to market the cattle, where do they plan to market the cattle, what avenue they're going to utilize. And so really it's a good time right now for those kind of marketing plans.
And even the fall calving guys that start August, September calving, if they're going to enroll and they've never been in these programs before, it's a good time to at least find out what the requirements would be, for instance, for a Natural Program and NHTC where things start at the point of birth to make sure that they understand what they're going to need to do to be qualified for those programs and so that they don't find out later they've done something or fed a product that would keep the cattle from being qualified.
So from an informational standpoint, it's good even prior to calving for fall guys, or even spring of '24, that they least get understanding of what the requirements and what the programs are so they'll be ready to go when the calf start hitting the ground and they can be qualified and be eligible for the programs.

Shauna Hermel:
What types of marketing support do producers receive by enrolling in the programs, whether just an agent source or going through to like an NHTC or a Care Program?

Doug Stanton:
We have what we call a buyer email blast that if producer is in and all the video sales are companies, we've already set up a relationship with them where they send us the IMI approved cattle prior to every sale in any IMI program at all, source and age, Natural, NHTC care, if they're involved with us, then they send that information to us for validation purposes to make sure that the cattle are really approved for that. So it's kind of a check and balance that we do prior to each of those sales.
And then we send that listing then out to a large group of buyers that we know, a lot of them are our feed yard customers that are also involved in these value added programs and have contracts with packers for NHTC or Natural or even the Care Program. And so we know these are people that are active in the value added programs, we know because we work with them out on the feed yard side and we know who they're shipping to and what programs they're involved in. And so we feel like it's a very active group of people that we send that listing too.
Or if they're at an approved sale barn of ours and they are going to be market on a particular day, we also will promote that to our buyer list. Troy and I have had that discussions where they've been kind of doing that, he can talk about that a little bit, where they've been doing that a little bit on their side in the past and we're going to combine that together and create really, a large, more inclusive group of buyers that both of us have been utilizing before and get it out to one master list.

Shauna Hermel:
Troy, do you want to pick up on that?

Troy Marshall:
Yeah, no, we're just really excited with... That's one of the advantages is just combining IMI and the Angus Link program has been the ability to expand our reach and gain some critical mass from a numbers standpoint. We had over 10% of the lots in the recent Western video that were Angus Verified, which was pretty exciting there that we're starting to get that kind of uptake across the industry where it really becomes relevant. And we do have an email list as well that, as Doug mentioned, we'll be combining so that on a weekly basis or when those cattle are getting marketed, they'll receive the list of those cattle. We also do that via social media posts through our Angus Link social media, and we also put that up on our website as well, kind of just a listing of those lots where they can link to those and find those cattle easily. But we're really committed to exposing the cattle to as many potential buyers that are looking for those cattle as we possibly can and look forward to continuing that as we go forward.

Shauna Hermel:
Excellent. Troy, how can a producer go about setting up to get enrolled with the Angus Verified and the Genetic Merit Scorecard?

Troy Marshall:
All those cattle have to be agent source verified. So we need a starting calving date and ending date there. Just basically a calving book we'll do or any of your information on your calving to get to your source and age verification. And from there, we just need the registration numbers of the bulls that sired the calves that you are enrolling. And that's really all we need from Angus Verified, we just need a list of those Angus bulls that you used. And if you're doing the scorecard, we also not only need the current bull battery information, but we need the cow herd composition, so whether or not those are Black Baldies or Angus or SimAngus or whatever those cows may be. And then if we have the historical bull battery information, if that's available, we can take that up to 10 years to improve the accuracy of those scores too. But essentially all we need is a listing of the bulls that you're using. It's pretty simple.

Shauna Hermel:
Excellent. And to get that history, it's good to ask for the transfer the registration paper, right, on those bulls you buy?

Troy Marshall:
That is correct. The bulls need to be registered and transferred into your name. We use the transfer as a proof of ownership. And so when you're buying those Angus bulls, make sure you get those transferred to your name so we'll have those in the system and it makes the process much simpler.

Shauna Hermel:
How about for the AI calves? Those are eligible as well, correct?

Troy Marshall:
That is correct. On the AI calves, we do need a receipt of the semen that you purchased so that we can validate that. But of course, we really encourage the use of AI and a lot of our more progressive producers are doing that. So take advantage of those high accuracy AI sires and get credit for it with your Genetic Merit Scorecard.

Shauna Hermel:
Excellent. Well, I'm going to let you all sign off here this afternoon with just maybe a plug for a website where people can get some more information and maybe a final wrap up comment.

Doug Stanton:
You can go to IMIGlobal.com and you can get information about our different programs, some of the requirements for those different programs, and how to get the process started.
And one thing that I thought I'd wrap up on is, and Troy and I touched on it a little bit earlier, when you look at these value added programs, in a lot of cases, what we find out is producers find that it's easier than they thought it would be. You see a documentation application and requirements, you think it's going to be a lot of paperwork, but in a lot of cases it's not really changing the practices they're doing today. For instance, they may not be implanted anyway, so enrolling an NHTC program really doesn't affect their management. They may also be using Angus bulls, so why not get credit for it by utilizing Angus Verified? So in a lot of cases, we feel like producers, step their foot in the water and try these value added programs because in a lot of cases, they're not as inundating and complicated as they may appear from the outside. Those that have participated in it have reaped those rewards for many years now.

Shauna Hermel:
Excellent.

Troy Marshall:
Troy at AngusLink.com, they can find more information on Angus Verified and the scorecard and also links to the IMI website to get the process started. Just kind of validating what Doug said, we really have one goal with the Angus Link program and with our partnership with IMI, and that's to help cattlemen put more dollars into their pockets. And so give us a call and we'd love to work with you guys to help you get rewarded for the superior genetics and the superior management that you're already putting into those cattle.

Speaker 1:
Listeners, to get more information to help make Angus work for you, check out the Angus Beef Bulletin and the Angus Beef Bulletin Extra Publications. You'll find links to subscribe to both of those in our show notes. If you have questions or comments, please let us know at ABBEditorial@Angus.org. And we'd sure appreciate it if you would rate this podcast or leave a review to tell us what you learned or what was helpful, and share this episode with any other profit minded cattlemen. Thanks for listening. This has been Ben Angus at work.