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Circle A Angus customers capture genetic value"We know our cattle gain a little more efficiently than average, because of our carcass data research," said Nick Hammett, commercial marketing manager for Circle A Angus Ranch.
By Doug Rich "We wanted a way for our customers to receive fair market value for their calves with known genetic potential," Nick Hammett, commercial marketing manager for Circle A Angus Ranch, said. The answer was a 5,000-head feedlot under roof at the ranch near Huntsville, Mo. Two years ago, this May, Circle A Angus placed their first calves into the unique feedlot. Hammett said they started out with their own ranch-raised cattle and in June that year brought in the first calves from their customers. The building was designed to allow customers to capture added value back on their calves. "We put a lot of time and resources into creating better genetics," Hammett said. "We have done research into feed input, tenderness, cow longevity, heifer pregnancy, and a lot of traits that are unique to our operation." Hammett said Circle A Angus has collected more feedlot and carcass data than any seedstock business in the country. They know what their cattle will do in the feedlot and on the rail and wanted to design a system where their customers would get rewarded for that but not have to take on the risk of retained ownership. Circle A Angus decided to reward their customers up front. Customers who sell their calves back to Circle A Feeders are guaranteed top of the market based on the Missouri market report for calves from the previous week. There is an additional $25 a head if the calf is out of a Circle A Angus sire. Circle A Angus will add another $10 if the calf is out of a Circle A Angus female and another $10 a head if the calves are age and source verified. Customers are guaranteed top of the market and up to $45 per head. "We know our cattle gain a little more efficiently than average, because of our carcass data research," Hammett said. "We can pay a little more just for that known genetic base." There are some requirements to be part of this marketing program. The calves need to be at least 50 percent Circle A Angus genetics, weigh 600 to 800 pounds before they are 11 months of age, be age and source verified, have two rounds of vaccinations, and be weaned for at least 45 days. "I guess where we differ from traditional marketing options is we would rather have some flesh on those calves," Hammett said. Hammett said sale barns want yearlings that weigh 600 pounds so they can put them out on grass and get cheap gains. He wants young, healthy, high quality calves that have been started on feed. "We like calves with some feed in them and we like producers who feed their calves," Hammett said. These kinds of calves gain better throughout the whole feeding period and they hang a higher quality carcass, Hammett said. "That is what we are about--producing a high quality beef product," Hammett said. This is all very important because the calves will go directly onto feed when they reach the feedlot. Circle A Angus does not offer a retained ownership program. Hammett said they are just not equipped to keep track of retained ownership calves. Customers still get carcass data back on their calves, however. There are not many programs where a person who does not retain ownership can still get carcass data back on his calves. "If you retain ownership, you are doing good to make $35 a head--where we are paying $35 a head plus top of the market for the calf and assuming all of the risk," Hammett said. "They get top of the market, up to $45 back per head, and carcass data. Why would they want to retain ownership?" About a month before they are ready to ship, customers contact Hammett who goes out to look at the calves and make sure they make weight, are in good health, with documentation on their vaccination history, and then they agree on a delivery day. Hammett said they take delivery on calves the first and third Wednesday of every month. The 5,000-head feedlot, all under roof, is one of the largest feedlots in the state of Missouri. The building is 2,800 feet long and 120 feet wide. There is almost 7.5 acres under one roof. "It is a big building, but 5,000 head is a small feeding operation," Hammett said. There is no liquid manure handling system in the building. All of the cattle are bedded on sawdust, which does a very good job of controlling odor. Hammett said they bring in sawdust from 10 sawmills in a 100-mile radius of the feedlot. They clean four pens a day, which requires about 50 tons of sawdust every day. The sawdust is composted in a separate building adjacent to the feedlot. It takes about a month to thoroughly compost this material before it goes back out on pastures across the 7,000 acre ranch. Hammett said they don't purchase any commercial fertilizer for the ranch. The building is designed with drive alleys on the outside and sorting alleys in the middle. The sides are open except for some lightweight curtains that can be pulled down in the winter to slow the north wind down. To assist the ventilation, there are exhaust fans every 25 feet on the ceiling, that blow heat and ammonia out the top of the building. Pens are 100-feet by 40-feet. The downside to this marketing plan by Circle A Angus has been to start their feeding program during a downturn in the economy in general and the feeding industry specifically. Hammett said they are selling about 400 bulls a year and the majority of their new customers are in it just because of this buy-back program. Before long, they will have more calves than this feedlot can hold. Circle A Angus will have to either retain ownership on those calves and send them to western feedlots or build another feedlot similar to the one they have at Huntsville. "I don't think we will ever have trouble getting customer calves in here," Hammett said. "We are optimistic about the future, if we can just make it through these challenging times." Doug Rich can be reached by phone at 785-749-5304, or by e-mail at richhpj@aol.com.
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