As we approach summertime it is a good idea to revisit your ranch’s marketing plan. Every operation should develop and maintain a marketing plan for their animals. Think of it as a blueprint to build a house that is a profitable ranch. Course with markets always fluctuating your plan needs to be flexible and easily updated to any changes. Here are 5 questions to consider when developing your plan:
1) What are you gonna sell?
If you are already an established operation this is a pretty easy question to answer. Are you selling for a niche market (organic, grass-fed, etc) or are you going for a commodity market? If you are selling spring calves how many are you selling and what sex are they. One thing to consider is what is your target weight you want those calves to be and how to get them there. If you are selling cows or replacement heifers what would you want them to weigh and if you want them open or bred.
2) Where are you going to sell?
In the beef industry there are several options where you can sell your cattle. Auction barns are a pretty standard way you can go. Online or video auction forums as well as just putting an ad in a paper could also be an option. Some producers even prefer to directly market to a local feed yard. Each option has it’s pros and cons so it is best to determine which works best for you and your situation.
3) When are you going to price or sell that product?
The question here is when do you plan to physically market your animals? You should choose a method of pricing and selling your animals that you are comfortable with. Some producers are comfortable using cash markets of cash forward contracts, while some like using futures or options markets. There is no “one size fits all” so go with the one you like best. Livestock Risk Protection Insurance is also an option, you can find more information on that by clicking here.
4) What are your marketing goals and objectives?
Given the current market trends, what is it that you want out of the sale? Now this may seem simple but it is best to have a price range of what you want because only wanting the highest price can increase the risk on you. Your goals should be a combination of getting a good price and controlling the risk associated with the cattle market.
5) How can you accomplish your marketing goals and objectives?
This is the “meat and potatoes” part of developing your plan. Identify specific strategies and tools you will need that’ll help you reach your goals and strategies. Also specify any actions you will need to take as well as a deadline you need to meet. This will help keep you on a timeline helping you to work more efficiently.
Creating a marketing plan can help reduce any stress and remove any confusion you may have. Understanding your cost of production will help you establish price objectives you will need to meet to be profitable. Finally it is best to always reevaluate your plan and to come up with a back up plan because you never know what the market will look like in a year.
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