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Kansas company introduces natural beef premium program

Agriculture.com Staff 06/05/2007 @ 8:07am

The Beef Marketing Group (BMG), headquartered at Great Bend, Kansas, announced its Customer Ownership Program in May. BMG will pay a $100 per head premium for all cattle harvested as natural.

BMG is a marketing cooperative of 14 feedyards in Kansas and Nebraska. Five of those are currently dedicated to the production of natural beef as part of an agreement with Tyson Fresh Meats, the top volume Certified Angus Beef LLC (CAB) licensed packer. To qualify for Certified Angus Beef brand Natural, cattle must be individually identified and never received antibiotics, hormonal implants, ionophores or animal by-products.

"We need all the documentation, including natural affidavits," says Kenny Wiens, BMG director of procurement.

BMG prefers, but does not require pre-conditioned, weaned calves. "Through producer participation in ownership, we hope they will take the right steps to add value by making cattle healthier and preventing fall-outs," Wiens adds.

Ranchers can retain full ownership or partner with BMG to own a percentage of their calves, which are procured in load lots only. Mixed groups of steers and heifers are accepted, too.

All producers in the program receive carcass data. "That's just one tool to help them understand how their cattle perform through harvest," Wiens says.

Producers applied use of such information ensures BMG a continued and improving high-quality supply.

"Our biggest driver is the number of CAB carcasses we can get," he says. "If we don't have a lot of that product at the end, then we aren't doing our job."

BMG's initial target for CAB acceptance was 30%, but the company has lifted its sights to 40% CAB on natural cattle. It could increase that goal again in the future.

"The CAB product is in such high demand that we just don't have enough supply to fill it," Wiens says. "It looks like there's almost an almost unlimited demand for CAB Natural."

Finished cattle are priced off the Chicago Mercantile Exchange (CME) Live Cattle close the Friday prior to harvest, with available bonuses for source- and age-verified cattle.

From there, producers may opt for more direct premiums and discounts, if they chose to participate in BMG's proprietary grid with Tyson. "The best way for producers to get full value for their cattle is to merchandise them at the packer level," Weins says.

All the yards sort cattle in an effort to market them at their optimal end point. Cattle treated for disease, or fall-out cattle, are sold as incidents arise, and forfeit the $100 natural premium.

The Beef Marketing Group (BMG), headquartered at Great Bend, Kansas, announced its Customer Ownership Program in May. BMG will pay a $100 per head premium for all cattle harvested as natural.

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