By SARAH B. AUBREY
Indiana Correspondent

GRAND ISLAND, Neb. — The American Simmental Assoc. (ASA), a breed registry organization representing some 8,000 members raising Simmental and Simmental-influence cattle, has announced a new carcass grid marketing program with meatpacking giant JBS Swift and Co.

The program is built around the new industry goal of 70:70:0 – meaning, 70 percent USDA Choice and above, 70 percent USDA Yield Grade 1 and 2 and above and 0 percent “out” cattle. Out cattle grade at USDA Standard and/or USDA Yield Grade 4, or are dark cutters.

“At Simmental, we do a significant amount of end testing, including 10 years of bull testing,” said Marty Ropp, ASA director of field services. “To us, biological type-wise, SimAngus cross cattle have the best chance of any British-Continental cross of meeting the 70:70:0 ideal. The program rewards cattle that are approaching this.”

To help reward producers for breeding and feeding cattle attaining the goal, the ASA tapped the grid marketing expertise of Mark Guge, owner of TwoRiver Cattle, who along with the now-closed Iowa Quality Beef cooperative developed a grid through JBS Swift in Grand Island, Neb.

“The ASA evaluated several programs,” Guge said, adding the program was launched in September 2007 and that the groups worked to build modest modifications before launching. “Grid programs don’t stay stagnate; there is always a bit of evolution in an industry that is in constant change.”

The 70:70:0 program does not require that cattle be ASA-registered nor does it state a percentage of Simmental influence; however, the grid seems to fit Simmental-influence from a crossbreeding perspective.

“We need some Continental and a little more muscle back in because there have just been way too many Yield Grade 4s,” Guge stated. “The SimAngus really fits the bill on this thing because there is also enough British in there to hit the marbling (targets).”
Because the program operates as a standard grid, it means anyone can participate in the premium program, not just feed yards or ASA members.

“It doesn’t matter what breed combination the cattle are; if they approach 70:70, they will be rewarded,” Ropp said.

While Guge acknowledged it is difficult to keep a steady supply of cattle year-round, a growing number of committed producers are seeing consistent benefits. Ed and Matt Greiman, brothers from Garner, Iowa, marketed about 2,500 head through the program so far this year.

“We try to feed source and age-verified cattle as much as we can – those cattle go to Swift and for the Japanese market,” said Ed Greiman of his interest in a program that rewards source verification. “We sell cattle every week and all our cattle go in a value-based program.”

Greiman’s background in value-based marketing is strong – he was actually Guge’s boss at the former Iowa Quality Beef – and he believes that aiming for targets and hitting or exceeding them is important for his bottom line.

“The Yield Grade 1 and 2 premium has helped me, but my average the last three years is about 65 percent choice,” he said.
Greiman uses the program to collect validated data that helps him buy cattle and know what to pay for them.

“When I’m buying cattle off a video, I know (if cattle from that herd have gone through the 70:70:0 program before) which cattle I can afford to pay more for and that have performed better for us,” he said.

The program offers what Ropp called “aggressive premiums” for cattle that can meet the targets. He thinks many producers with Simmental-influence cattle are likely to hit these numbers.
Guge concurred. "If we're talking actual grid premiums, we'll see up to $80 per head on some cattle. But more likely between $25 and $80 per head," he said.

Cattle are currently arriving from across the Midwest, including Iowa, Illinois, Missouri, Minnesota, Kansas, South Dakota and Nebraska. The 70:70:0 program is in its startup phase, but Guge said the data they’ve collected so far endorses the program for many producers’ types of cattle.

“On cattle with strictly some Simmental influence and that were source- and age-verified, we’ve got 78 percent Choice or better with only 4 percent Yield Grade 4,” he explained, cautioning that the number is not a representative sample across the entire group of cattle that have been put through the program.

Still, Guge said he is impressed with what he says is a positive trend. “Overall, we saw Yield Grade 4 discounts drop 50 percent without a loss in Quality Grade,” he said.

For more information, contact Ropp with the ASA at 406-581-7835 or Guge at JBS Swift at 515-231-6849, or visit www.7070beef.com
The ASA maintains field services representatives in the states of Kentucky, South Dakota and Kansas who can be reached by contacting ASA headquarters at 406-587-4531.