Shaping the Future

by Steve Cornett
BEEF TODAY

Sometimes you just need to take off your cowboy hat, don your—oh, say, lederhosen—and look at the cattle industry from a different perspective.

That's exactly what Klaus Birkel did when he decided to be a rancher in Central Texas. Birkel, whose family owned one of Europe's largest pasta manufacturing companies, bought 12,000 acres in the high-priced rolling hills east of Waco in 1991. He named the ranch Camp Cooley. A little different, perhaps, than most ranch names in that neck of the woods. But Camp Cooley would not be a typical Central Texas ranch.

From the perspective of the German food marketer, the U.S. cattle industry appeared to be somewhat of a hodgepodge of egocentric decision makers whose lack of organization and coordination resulted in added costs and a lower-quality product.

It also didn't take Birkel long to notice there was a certain lack of profitability in the commercial cow business, so he set about upgrading his cowherd. He decided what he needed in that hot, bug-infested country was something with bos indicus breeding.

He learned about the, ah, “price differential,” rumored to be common with some of the animals carrying phenotypic evidence of bos indicus genetics.

He read about the onset of “value-based marketing” and what was, at that time, a lot of discussion about the industry's trend toward alliances.

When he started buying bulls, he liked what he saw in the Brangus breed, especially from the Brinks Brangus herd in Kansas. And, as Joe Fuller, vice president of customer service and marketing at Camp Cooley, puts it: “Mr. Birkel has never been accused of thinking small.”

He bought the herd and moved them south.

The mission. Since then, Birkel has assembled a staff of cattle people who share his vision. Their goal is to someday be able to tell a packer or retailer where they can line up as many as 100,000 head of cattle of known, similar genetics.

To boil it down, Camp Cooley is a seedstock outfit that helps you pick the genetics you want, manage and market your cattle, measure the results and then adapt what you learn to make improvements. They make their money on seedstock and semen sales, and they keep a vested interest in their customers' profitability. They think of their “customers” as everybody from the purebred breeder to his commercial customers on down the line to the feedlot owner, packer and retailer. Camp Cooley is the nucleus around which the alliance forms.

It's a promising enough deal that after such a short history, Camp Cooley was named Beef Improvement Federation's Seedstock Producer of the Year in 2004.

Granted, the pioneer trails were marked with many bleached bones, and the beef industry's attempts to adapt its 19th Century infrastructure to 21st Century challenges have already produced several high-profile casualties. It has never been, nor will it ever be, cheap or risk-free to find new ways to do business. But that hasn't scared Birkel. As Dr. Tom Field at Colorado State University puts it, the Camp Cooley people and their cooperators are “controlling their future, rather than sitting back and letting the future happen to them.”

When you take off your cowboy hat and look at the future, it's easy to see that the beef industry consists of businesses that are challenged by new technology and globalization.

The beef industry's competition for the protein dollar—pork and poultry—are both in better positions to adapt to such sudden change. Their genetics are more fixed. Their environments more controlled. Their biological cycles faster and their business organization more centralized. Their intra-sector communications are direct, immediate and all aimed at one profit point: Consumer satisfaction at a consumer-pleasing price.

The cattle industry will never be able—even assuming that's what producers wanted to do—to replicate the infrastructure of the pork and poultry industries. But that doesn't mean beef producers can't attempt to find ways to borrow the “good” from those more streamlined business models without having to put all of cow country in the hands of a few vertical integrators. There will be vertical integrators in the beef business, of course. The challenge for independent operators will be to compete with them successfully. It won't be easy with a commodity mindset.

Birkel recognizes that. So do the people who run his ranch. And as the years have passed, they've found a growing number of cattle people who agree.

The president of Camp Cooley is Mark Cowan, former executive at the Arkansas Cattlemen's Association and employee at the Brangus Association. Cowan says that not only is the cattle industry changing, so are cattle ranchers. He believes that the purebred breeders of the future will have to deliver a package of services that include much more than a few bulls and heifers.

Camp Cooley has a list of Allied Industry Partners, including Purina, Agriland Farm Credit Services and Fort Dodge Animal Health, and a staff of individuals who not only help with the day-to-day operation of the ranch, but who are available to help its customers—and even their customers' customers.

The idea, Cowan says, is that in the new age, a lot of cattle people are simply overwhelmed with data and management options.

He brings an interesting perspective. The cow industry is largely a conglomeration of independent producers. But it is a capital-intensive business, one where producers have the wherewithal to make investments they think are wise. In the world of commodity beef, however, there are few rewards for the sort of investments leading-edge seedstock people like to see ranchers make in genetics. Moreover, in a commodity world, there is less incentive to apply top-shelf management techniques.

That, historically, has allowed many cattle producers to “get by” raising average and lower-quality stock and dumping them into local auctions.

It still happens that way on most ranches and cattle farms, of course. But it is less so today than 10 years ago. And producers who look hard at the future know they need to adapt or join the thousands of their comrades who give up the business each year.

What they need is obvious. They need better genetics, better management and, above all, better marketing. But how, with a herd of 50 or 250 animals, are they to get that? Enter Camp Cooley with acumen to share.

The right fit. Cowan says that when he gets a cold call from a producer wanting to buy bulls, the Camp Cooley approach is to look at the potential customer's entire operation—his cows, his environment and his goals. When possible, they review data and then find a bull to meet the goals.

If need be, they've helped a new customer learn how to use artificial insemination.

Backed by their own on-staff health and nutrition specialists, they also help some of their customers tackle production problems. As the calves are ready to go, they offer a bevy of marketing assistance.

Joe Fuller offers the example of Mike Weathers, a Houston businessman who bought a ranch outside of town a few years ago. Weathers called to buy a bull. Fuller stopped by the ranch, looked at the cows and suggested a “bull package.” Weathers had little expertise in the cattle industry and he certainly didn't know anything about carcass or feedlot data. He is joining forces with Camp Cooley to feed this year's calf crop.

Weathers' calves will be fed at Hondo Creek Cattle Company, a south Texas feedlot far from the Great Plains feeding and packing complex. He's happy to have a “partnership” with Camp Cooley and the sizable numbers of cattle it can provide. From Hondo Creek, the cattle go to Sam Kane Meat Processors in Corpus Christi, another “out of position,” family-owned business.

All the records—from feedlot performance to carcass qualities—come back, so when it is time to pick bulls—and cull cows—next year there is more to work with.

The ranch helps its customers with other types of marketing. They sponsor cooperators' sales, where they amass Camp Cooley genetics and sell both registered and commercial stock. Fuller says he can find buyers a set of Camp Cooley replacement heifers or performance-backed bulls about any time.

All of which amounts to a service package that the Camp Cooley staff thinks will help producers survive as individual business people, but at the same time, help them produce the beef that will keep the industry healthy. And a healthy industry with profitable customers will pay off for Camp Cooley.

In the last few years, the ranch has also started purebred Angus and Charolais herds. Cowan says those genetics will complement the Brangus in crossbreeding situations.

Will it work well enough for Camp Cooley to justify all the expense involved? Why not? Beef production—at the cowherd level—has been slow to drag itself into the high-tech world facing other sectors in the agriculture industry. Camp Cooley is already kicking it up a notch because Birkel and his staff want to stay on the cutting edge.