An Insurance Policy Worth the Premium

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An Insurance Policy Worth the Premium

By Chip Kemp  |         

Soon you’ll be on calving watch and you’ll pass some time searching the Amazon app on your phone for the best throw lever out there for the new high-powered scope you got for Christmas. When doing so, will you concern yourself with the tensile strength of the carbon filaments within the various levers? Likely not, you’ll seek out a product that is guaranteed to work, appears to have solid customer service and engineering behind it, and has a price point you can live with. 

Or Spring will one day arrive and you’ll recall (only when the grass is six inches tall) that, back in the infamous year of 2020, you ran the old weed eater over with the side-by-side in a fit of rage because it teased the weeds rather than cut them. When you run to town to buy its successor, are you going to be comparing engine outputs, shaft lengths, and shoulder strap comfort of ten different brands? Some will, but many will simply go to the retailer they’ve always trusted to solve problems and select from their assortment. The process will likely be quick, and you’ll be back dressing up the yard in no time. 

When a beef consumer (OUR CUSTOMER) selects their next grilling target from the beef counter they already assume the grocer purchased a product that has 1) documented wholesomeness and safety (USDA-inspected), 2) a quantifiable and predictable eating experience (quality grades), and 3) an identifiable selling point. Mind you, that if you asked most consumers about the metrics associated with HACCP or Critical Control Points, or about the balance of marbling, bone ossification, and lean color and their impact on palatability, or even the awareness of current beef cutouts and market trends they would admit they haven’t any idea about these things. 

What they know is this. Every other Sunday afternoon for the last six months they’ve come to this meat counter. They bought various products including beef on each of those trips. Each time, with appropriate guidance from reading materials or store employees, they went home with a product that met or exceeded their expectations. And because history told them that the experience would be rewarding they came back. The grocer will know when the experience was not rewarding. Because they simply buy something else or somewhere else. In other words – they don’t come back.

The point? The science and informatics behind each of these products and experiences is crucial. The manufacturers and retailers of these products rely on this knowledge to build something that has customer appeal and will meet or exceed the expectation of the buyer given the price point they are willing to pay. AND, the product will not be returned or experience a failure that requires returning the money to the buyer. The firms involved know some customers will thoroughly study their options and thus the facts and specifics need to be industry-leading and readily available. These firms also know that a great many customers do not want to bother with digging into the details. They came to buy a product with the valid expectation that it would live up to the claims of the seller. The data and facts are just as real in this case, just more so to the manufacturer and seller to ensure they live up to customer demands.

You already know these things. So why take up precious real estate in this publication stating what is already intuitive? Because way too frequently I hear the following statement… 

“My bull customers don’t care about numbers.” 

Really? Your customers are seeking uncertainty? I doubt that.

No question that in a very small percentage of cases, there are commercial buyers who are so price-conscious that there isn’t a single metric that matters to them beyond cost. The three unknown bulls that got dropped off at the sale barn with their ultimate destination unknown – either ground beef or another pasture – are a testament to this. They run through directly prior to the “special” cow sale. And sure enough, someone plans to take them home. Might even put them on heifers just to roll the dice since it is difficult to spend time in Vegas at present. Let’s exclude this clientele.

My assertion is this. There are a larger and larger number of commercial buyers who are seeking EPD and Index knowledge to help them eke out a profit for their family. Those folks demand numbers today. They will demand much more tomorrow. If your kids plan to stay in the business this is simply a fact. However, there are still a very large number of serious buyers who would rather defer the investigation of facts and the details of the manufacturer's process to you, their seedstock provider. In this case the responsible use of credible EPDs and Indexes are just as crucial. But more of the burden falls on you. The genetic predictors become your “insurance policy” as you look to provide the bulls that best complement their cow herd and best match their management and marketing practices. Let’s face it, if they keep a lot of heifers, the more confident you are of their calving ease the easier you’ll sleep when they load those bulls. At the same time, if the customer feeds out a large portion of their terminal calves and you just pawned off some bulls on them with poor marbling genetics how many times are they coming back?

Every industry has its own jargon. Its own language. And understanding the phrases and semantics is crucial. Ag is no different. When that potential buyer suggests that he doesn’t put too much pressure on the numbers, what he is likely saying is that you as a seedstock provider better put even more reliance on great science and solid genetic predictors. The buyer is essentially saying he isn’t taking the blame for any bad decisions. He will rest those purely and squarely in the lap of his bull provider. And then he is likely to ask, “Didn’t you even look at the numbers before you sold him to me?”  


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