Pharo Cattle Company is on the verge of something really, really, REALLY BIG – a Game Changer like no other! We started sharing bits and pieces with our customers in March. This is the first mention of it, however, to rest of the world. This is EXCITING times TWENTY! In the last few months, all of the pieces of the puzzle have miraculously been falling into place. Many PCC customers will soon be receiving a premium of $75 to $120 per head on their calves. There isn’t another program that will even come close to paying premiums like this. We are extremely excited to be able to share the entire story with you. If you are a cow-calf producer, this could totally change the future of your business.
Tyson Foods (one of the big four packers) asked Cactus Feeders to help them create a source for a domestic (made in the USA), grass-finished beef product. I’ve been told three major retailers have expressed a serious interest in this new grass-finished product.
This grass-fed movement is consumer driven. Growth in the grass-fed beef sector has been averaging around 25% every year for the past 14 years. I hesitate to say this – but cow-calf producers are often the last to know what is going on. This happens because most of them are inundated with mainstream, herd-mentality ways of thinking. Truth be known, there are HUGE premiums being paid for grass-fed beef – much bigger than most producers can imagine.
Consumers perceive grass-fed beef to be healthier than beef produced in a feedlot. If you have been paying attention, you have seen many examples of grass-fed beef being heavily promoted in supermarkets, fast food joints and upscale restaurants. Unfortunately, much of the existing grass-fed beef is not finished (highly marbled). Therefore, it does not provide a good eating experienced.
Cactus Feeders knew they would have to start out with the right genetics. They also knew mainstream genetics were not efficient enough to work in this production model. After doing some research, Cactus Feeders decided Pharo Cattle Company has the easy-fleshing, low-maintenance genetics required – and in large enough numbers to meet the growing demand. Pharo Cattle Company is currently selling 800 to 900 bulls per year in four different states. In January, Tres Hess from Cactus Feeders contacted me and explained what Tyson Foods was wanting to do.
Suffice it to say, I was ecstatic. However, there were many unanswered questions. They were talking about numbers in the 10,000 to 20,000 range. That’s impressive – but where would we finish so many animals? How would we create a consistent and uniform product? I was about to say, “Thanks, but no thanks,” when Cactus Feeders decided they wanted to partner with Pharo Cattle Company in the production of this grass-finished product. They have access to many, many irrigated circles that could be used to finish cattle on grass and other green forages. Properly done, this will create a very consistent and uniform product – year after year after year.
About that time, Tim Goodnight from PCC Headquarters took the reins on this exciting project. This is right up Tim’s alley and fulfils a vision Tim has had since he became a member of the PCC management team. Under Tim’s leadership, this project is sure to be a huge success. Tim communicates with Tres Hess from Cactus Feeders almost on a daily basis. They have been working out all of the possible kinks.
Everyone involved, from Tyson Foods to Cactus Feeders to Pharo Cattle Company, thought it would be best to put together a trial run. Tim went to work to procure 120 steers that are high-percentage Pharo genetics. He also helped Cactus Feeders set up a workable grazing system that involves daily moves. The 120 PCC steers arrived at Cactus Feeders in Texas on May 25th. The folks at Cactus Feeders were very impressed with the cattle. They said these steers would be just as profitable in the feedlot. Of course, we already knew that. It was good, however, to have the people at Cactus Feeders see what we are all about.
Cactus Feeders added two groups of ten head each of some mainstream genetics that Cactus considers to be among the best they have fed. In just two weeks, the people at Cactus noticed the PCC cattle were literally walking away from the other two groups. No comparison! As time goes on, the PCC cattle continue to out-perform the other two groups. Most status quo producers do not understand the true benefits of low-maintenance genetics.
These cattle are grazing green forages with a TDN value of 68 to 72 percent. This is by design. That is not much lower than a typical feedlot ration. We expect the PCC cattle to grade no lower than USDA Choice. Some will probably grade Prime.
We were just four weeks into our trial run when there was talk about sourcing another 2000 head for fall delivery. Cactus Feeders and Pharo Cattle Company are so confident Tyson Foods will love the results of the trial run, they will want to ramp up immediately. With a program like this, it is impossible to ramp up immediately. You can’t just go out and purchase several truckloads of grass-finished cattle. They are nowhere to be found.
Tim Goodnight is currently sourcing another 2000 head of cattle with at least 75% Pharo genetics. He may put some big 800-pound steers in the program to help fill the anticipated gap. Pharo Cattle Company will pay $15/cwt over the Oklahoma City market or over the customer’s local market – whichever is higher. That is a premium of $75 per head on 500-pound calves and a premium of $120 per head on 800-pound yearlings.
We believe consumer demand for grass-finished beef will skyrocket once we provide a supply of consistent, highly-marbled, grass-finished beef. We think it will be many years before supply starts to catch up with demand. Therefore, we expect the premiums will likely increase in the near future.
If all goes as planned, we expect Tyson Foods will want to ramp this program up as fast as they can. The numbers I have heard seem daunting and overwhelming – but I’m sure they are possible. This is really exciting! However, we need to be careful we don’t grow so fast we overlook some important details.
We believe this will be a real Game Changer for many cow-calf operations. There isn’t another program out there that will pay premiums like this with so little required of the producer. All they have to do is use the right genetics. PCC customers are already the most profitable cow-calf producers in the world because of their focus on increasing production and profit per acre – instead of per animal. Receiving a guaranteed premium for the calves they produce is like a very thick layer of frosting on the cake.
NOTE: Pharo Cattle Company has a Marketing Agreement with Cactus Feeders. Cactus Feeders is an employee-owned company that we feel very good about. PCC customers will not have to deal with anyone other than Pharo Cattle Company.
From the very beginning, Pharo Cattle Company’s greatest concern has been doing what is in the best interests of our customers. Our second greatest concern is that the cattle in this program be handled, finished, harvested and marketed under the highest industry standards. As you know, many beef products are described in ways that lead consumers to believe the product is better than it really is. We refuse to take part in these deceitful practices. Cactus Feeders and Tyson Foods are allowing us to establish the standards. Our third greatest concern is in providing beef consumers with a great eating experience – an experience that can be duplicated over and over and over. Working together, Tyson Foods, Cactus Feeders and Pharo Cattle Company will be able to accomplish things that could never be accomplished if we were working separately.