Presentation on theme: "Presented by Will Lowe Marketing Representative – NWCBP June 13, 2010"— Presentation transcript:
1 Presented by Will Lowe Marketing Representative – NWCBP June 13, 2010 Adding Value Through Targeted Marketing - Northwest Consolidated Beef ProducersPresented by Will LoweMarketing Representative – NWCBP June 13, 2010
2 Who is NWCBP Ltd. Non-profit Private Company, Incorporated Sept.2006 Initiated by 13 feedlot owners and cow/calf producers in Saskatchewan & AlbertaCurrently directed by a 9 member board with a 5 member executive boardManaged by Marketing team (Vern Lonsberry, Will Lowe, Wade Pearson) Office Manager (Teresa Kooistra) and General Manager (Terry Schetzsle)
3 Who is NWCBP Ltd.Membership based company funded by per head marketing feesModeled on CBP-USA based out of Canyon, Texas.NWCBP has an office based out of Strathmore, AlbertaWe represent feeders and cow/calf producers ranging in size from as few as 200 head to 25,000
4 Membership Levels A Membership – full voting privileges $4,000 one time investment$4.50/Hd marketing feeB Membership – full voting privileges$1,500 one time investment$6/Hd marketing feeC Membership – Cow/Bull Member – no voting privileges$1,000 one time investment$10/Hd
5 NWCBP TeamVern Lonsberry – 25 yrs with Western Feedlots. Previous to WFL worked at Poundmaker and Lakeside. Has been involved in the industry over 30 years.Wade Pearson – 15 years with WFL – HRWill Lowe – graduated from the U of S College of Agriculture in 1999 and then worked 7 years as a Cattle Buyer with Cargill Foods in Alberta and Saskatchewan
6 NWCBP TeamTeresa Kooistra has been with NWCBP since the summer of 2008 and manages the day to administration of our companyTerry Schetzsle is from Veteran, Alberta and is the former market owner of Dryland Trading Corporation. Terry coordinates the sale of our cows
7 Why NWCBP ExistsCanadian feeders are continuing to see fewer cash salesLack of bargaining power with packers due to consolidation of packing industryCaptive supply numbers/percentages have grown due to reduced kills at Canadian plants. Higher percentage of kill consists of cows since 2008More market access (domestic and US) until COOL
8 Why NWCBP Exists Better market information for our members Combat wide basis levels between Canada & USNegotiate the best price and conditions for the sale and delivery of customers cattleIncrease feedlot marginsTry to address packer and retail marginsCollaborate with our US counterparts to make informed US marketing decisions
9 What does NWCBP Do?We are a marketing group dedicated to promoting, selling and informing our customers in the volatile cattle marketsOur core business is the marketing of fat cattle for Western Canadian feedlot customers butWe also market cull cows and bulls domestically and for export. $10/Hd regardless of Membership levelWe visit our customers on a weekly basis to view the cattle and describe and advise the customer on the right time to market their cattle and the options available for each group of cattle
10 What does NWCBP Do?We represent 137 customers with a one time finishing/backgrounding capacity of 390,000 & 40,000 cows (85 Alberta, 45 Saskatchewan, 7 Manitoba)We see ourselves “as an alternative to legislation, one that reduces captive supplies by packers, while increasing the bargaining power and marketing options of sellers”We access the cattle markets domestically and in the US every day in order to sell our customers cattle to the right packer at the right time for the right price
11 Sales Results 2007-2009 NWCBP vs. Canfax 2008 Sales 127,000 / 4,000 Cows (+10%)2009 Sales 137,000 / 3,600 Cows (+7.3%)Profit Analysis $15/Hd on SteersProfit Analysis $20/Hd on HeifersProfit Analysis $19/Hd on SteersProfit Analysis $18/Hd on HeifersProfit Analysis $11.75/Hd on SteersProfit Analysis $11.90/Hd on Heifers
12 Sales Results 2007-2009 NWCBP vs. Canfax The method of comparison was to take the Canfax’s weighted average price for the week and compared that to the weighted average price of NWCBP weekly salesNot necessarily the most scientific method but it is the best comparison we can makeSuccess has been that membership continues to grow but results in 2009 have slippedDue to COOL, lack of competitive domestic bidding (2 western Canadian packers), closure of XL – MJ plant and continued cow kills
13 Bid / Ask Trading Method NWCBP does not trade cattle using the traditional sealed bid systemWe do not set parameters on time when we trade our members cattle.We evaluate market conditions to set an ask price that we begin negotiationsWe also set parameters of the specs of ask in regards to weight breaks, delivery time etc.
14 Bid / Ask Trading Method This is a model that is used right through the US.Allows you to adjust to changing market conditionsDoesn’t box you in to the whims of the market for the certain hour and day that you decide to sellPuts a certain amount of power back into your hands but the ask has to be realistic and reflect current market conditions
15 Bid / Ask Trading Method Allows you to keep information away from the packersAfter cattle are sold in sealed bid format you usually let all bidders know what was bidThis gives the packing plants the tools to lead the market in whatever direction they want to and allows them to count competitors inventory
16 Bid / Ask Trading Method Under our system the packers are on a need to know basisThere is no obligation to tell them anything more than the cattle are sold or notIf cattle are priced at a certain level and a packer matches the price asked then we must follow through and sell them the cattle
17 Cattle FinancingOffered in partnership with Stockman’s assistance Corporation (SAC) out of Saskatoon, SK.SAC is a alliance partner of FCC that administers the financing of cattle in Canada on FCC’s behalfSAC is a stand alone non affiliated partner. No association with particular markets, dealers, packing plants etc.
18 Cattle Financing 10% equity requirement SAC finance brand must be applied to cattle20% equity requirement if you decide to retain ownership and feed your cattle. Value determined from average sales price (ie. Canfax) for a particular weight class of feeder cattle
19 Cattle Financing Feed component up to $1/day on feeder cattle They will finance all classes of cattle including breeding cowsInterest rates are posted CIBC prime rates +1/2%.All private information is handled by SAC and FCC. NWCBP Ltd. is not privy to any private financial information
20 Pharmaceutical Deal Just new in the March Bulk pricing on a complete list of veterinary pharmaceutical productsUpfront discount in addition to competitive pricingQuick delivery to your home or closest townPotential saving of hundreds or even thousands of dollars
21 SummeryMarketing services that helps producers to collaborate and work together to combat the consolidation seen in the packing industryInformative services that keep producers in the “loop” even if they don’t market cattle every weekNon-profit private company that works for their customers and whose sole goal is to represent the interests of the members
22 SummeryOffer services for marketing fed cattle, cows/bulls and maybe some opportunities on feeder cattle as we growFinancing that is very competitive in the marketplacePharmaceutical Partnership’sWeekly market reports and a marketing staff that has many years of experience
23 149A Orchard Park Rd.Strathmore, Alb.T1P 1R8OfficeWill’s CellVern’s CellWade’s Cell
24 The dramatic moves come as a result of: $Can has been very volatile again this year moving from a low of $77 in March 2009 to par with the US dollar last TuesdayThe dramatic moves come as a result of:Higher inflationRecovery of economy in Canada, especially ManufacturingRecovery in commodities specifically OilManageable government deficitsProblems in Rest of the world ie. Portugal, Italy, Ireland, Greece and SpainMassive US deficit spending
28 Beef Demand / Pricing Has been on the rise since the start of the year Cut-out values for trim & grinding products have increased significantly since JanuaryConsumers are starting to come out of recession mode and spending more on beef products again. Good retail demand has continued with increasing food service (restaurant) demand
31 Beef Demand vs. Retail Pricing The problem facing the cattle industry is the ability of the producer to share in the retail price of beefRetail prices have gone up while beef prices paid to producers has either gone down or stayed the sameMarket power determines whether or not added costs can be passed on to consumers
34 Feeder / Fat / Cow Prices 2010 Feeder prices the last three years haven’t been particularly profitable. CAD and now COOL have impacted prices significantly inThe same factors have also influenced fat prices along with increased cow kills which have tied up more kill space in the packing plantsCow prices stood up fairly well in spite of large cow kills in 2009 and the outlook for 2010 is better due to heavy cow kills the last 2 years. Access for younger cows in the US has definitely helped. Age verifying cows if you were able to was a definite benefit at times through $50-100/head more
35 Going forward the large number of cows killed will be a positive thing for the industry We are coming back to a more sustainable number of cattle and will help to put supply/demand back into equilibriumThis will have positive influence on prices of all classes of cattle for the next few yearsUS cattle numbers are also coming in smaller and will help to stimulate pricing as long as we don’t slip back into recession
41 Canadian Cattle Inventories Total cattle numbers are down 1.25% on Jan.1/10 vs. Jan.1/09 to million but this follows a 5.15% drop from 1/09 to 1/083.9% less beef cows than Jan.1/09 (4.47 million)15.4% fewer beef cows than peak 2005 inventoryBeef herd is now equal to the herd size of 2000Sask. Cow herd sits at 1.38 million down .7% vs 2009 but down 11.5% since Alberta at 1.73 million beef cows down 6.5% vs 2009 and 17.25% since Due to drier conditions in Alberta and closure of XL – MJ?
45 Saskatchewan / Alberta COF COF numbers are up 5% March/10 vs due to lower feed costs in Canada, COOL, $Can and narrower feeder basis compared to 2009 and is 13% higher than 2008Placement numbers have been larger YTD 2010 compared to 2009 due to smaller placements in the fallMore COF in Canada but fewer in the US combined with lower carcass weight in US should keep numbers manageable for the next couple of months
47 US COF 3.2% lower April COF vs. 2009 at 10.81 million Placements in Mar. 2010, up 5.6% over 2009.Marketing's were also 5% higher than last year.US cow herd is pegged at 31.5 million the smallest since 1963
Your consent to our cookies if you continue to use this website.