New to Retained Ownership

Most would agree that anything beneficial to individual facets of the beef industry, as well as the industry as a whole, is worth taking a close look at. For the producer, retained ownership of cattle can be just such an idea, and one that InterMountain Beef invites producers to explore. 

Retained ownership of cattle through the feeding process is an option that most producers have been aware of , but simply unwilling or unable to venture into because of inherent risks and lack of funds. In recent years, however, that old option has become a real opportunity. The risks still exist, but due to an increased number of feedlots specializing in custom feeding, and the unique management skills which accompany such a focus, the risks have become less intimidating.

New financing options offered by many feedlots now enable most producers to overcome the cash- flow obstacle of retained ownership. At InterMountain Beef, for example, 100% of the feed costs can be financed, as well as a percentage of the value of the cattle, based upon the needs of the customer. Rates for such options are generally reasonable, running just slightly above prime at InterMountain Beef. 

Another incentive for producers who choose to retain ownership is the opportunity to utilize the expertise of feedlot owners and managers in the area of risk management and profitability projections. Feedlots with quality custom feeding programs, such as InterMountain Beef, have the ability to offer their customers the benefits of futures and options, as well as solid educational backgrounds to aid customers in protecting their bottom line, and thus the feeders good reputation.

Producers who are in ownership of superior genetics stand to gain from retained ownership in another very important way. Rather than forfeit the premium for a superior product by selling his cattle outright to the feeder, he can reap the benefits himself by following his cattle through to final market, when the reward for such a product is actually given. Those producers interested in closely evaluating the quality and consistency of their herd may be interested in the Inside Beef program sponsored by the Idaho Cattle Association and the University of Idaho. This program is designed to establish a system of cooperation and shared information between producers, feeders, packers and retailers to ultimately benefit over-all beef genetics and management. To participate in the program or for further information, a producer may contact a participating feedlot, such as InterMountain Beef, or either of the sponsoring entities.

Of course no advances in reducing risk and maximizing profit are of value unless the producer and feeder as a team can actually feed and market cattle successfully. Producers considering retained ownership should evaluate potential feedlots carefully, asking and observing to see that management claims can be backed by facilities, equipment, personnel and reputation.   Such scrutiny is welcomed by InterMountain Beef and other feedlots interested in earning business from potential customers. The Idaho Cattle Association offers a Guide to Custom Feeding which can be of great value to a producer considering retained ownership. This guide can be requested by contacting the Association at P.O. Box 15397, Boise, Idaho 83715.

In general, retained ownership provides a producer the opportunity to follow his own cattle through the entire feeding process, shedding new perspectives on the quality and performance of his herd, as well as potentially increasing profits. The feeder in turn is allowed to do what he does best – feed cattle.

Done correctly it is a win/win endeavor, and one that InterMountain Beef encourages producers to research further. Nothing worth pursuing is risk-free. The key then, is to choose risks with compensating advantages, such as retained ownership of cattle.