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by David Bowser A 40-year veteran of the packing industry has been named head of Consolidated Beef Producers, Inc. Lanny Binger spent 30 years with Excel and, before that, 10 years with Armour and Co. "He's been in the cattle business all of his life," said Paul Hitch, a Guymon, Okla., cattle feeder and chairman of CBP's board of directors. "He's fed cattle on his own. Most of his experience has been in the meat packing business. We're delighted that Lanny would choose to come and take over the reins as general manager of Consolidated Beef Producers." Binger's message as he assumes those reins is not a new one, but he is in a position to do something with it. He said that with the numbers CBP can provide -- they've sold about 400,000 in their first six months of operations -- there are opportunities to partner with packers. "I use the term partner because that's how we have to look at it," Binger said. "We're all in this together. If it doesn't work for all parties, there's really nothing to talk about." He said there are also some opportunities to partner with retailers on branded beef programs. "Cattle are not all like peas in a pod, unfortunately," he said. "We have to get the right cattle to the right packer in the right program." Binger said that he thinks a consistent product is the key. That means passing carcass information back to the producer via the feedyard. That, in turn, means more cattle have to be sold on a formula or grid basis. The new CBP head said price discovery is the most immediate challenge facing the industry today. He said that there are different ways a price for live cattle can be determined, and he would like to see formulas changed so the prices are not necessarily pegged to the cash market. "One way is probably a way you could get all entities of our business to agree on," he said. " That's using the USDA cutout when we have complete mandatory pricing and are comfortable with it." Binger said that about two-thirds of the cattle CBP has sold to date were on a grid. About a third were sold on the cash market. "I just think it's a matter of time before any live quote will be using the cutouts," he said. Binger also said that not all of the packers CBP deals with are returning carcass data, but he said he thinks that will change. He said these are things he will be working on. Binger said CBP hasn't gone to the packers yet and asked if CBP can supply a given amount that fits a packer's needs, what kind of pricing can the feedyards expect? Binger said he thinks agreements can be reach with packers, but not if CBP tries to beat them over the head with the volume of cattle the marketing alliance controls. "I think it's how you approach them," Binger said. The approach, he said, has to be one of cooperation, not demands. "We're not driving the train," Binger said. "We're not in a position to do that today. We have to be flexible and work with them on what's the best way to do this." The 40-year veteran of the beef business said the quality of cattle has improved dramatically over the past decade, but the industry is still not where it needs to be. Binger indicated that there may still be some rough roads ahead in moving the nation's herd toward a consistent product. He cited Excel's efforts concerning breeds in the late 1980s, acknowledging that he was involved in that move and the packing company took a lot of flak over it, but improvements were made. Still, he said improvement is a never-ending process and there is a lot of improvement that remains to be done. "We as packers and feedlots have caused some of that ourselves by buying everything on the average," Binger said. "I think when we can show the producer what the cattle do, and he gets the results back, you'll see changes. He doesn't get the results on live cattle. In my opinion, we have to get to the time when he gets the results. That means selling them on the grid." Those feedyards that aren't selling on a grid are at a disadvantage, he said. "My goal is to get more and more of Consolidated's cattle going that way," he said. © |
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