CattleFax celebrates 50 years in business, reflects on changes in cattle industry
In 1968, a group of analysts banded together to confront changes in the cattle industry.
“At the time, the industry was not totally comfortable that all the information and data they were receiving from the government was accurate,” Randy Blach, CattleFax CEO, says.
The member-owned organization was formed with the purpose of serving producers in all segments of the cattle and beef business, and the company has served as a leader in beef industry research, analysis and information.
University of Nebraska Engler Agribusiness Entrepreneurship program Director Tom Field says, “An organization that’s been around that long is pretty special. It’s a remarkable story. What CattleFax has done is taken data and turned it into information.”
Genesis of a unique business
CattleFax is known for setting the industry standard by providing data through an exclusive industry database and providing market information and analysis.
“At that point in time, there was the feel that buyers or packers had an advantage from an information standpoint,” adds Kevin Good, CattleFax analyst. “There were four packers that controlled 80-plus percent of the industry, and that’s how it’s been for quite some time.”
“We felt like we need to have our own information, data-sharing business to where we could see some trends more frequently during the course of the year and also double-check during the course of the year,” Blach adds.
A membership-driven focus, with input from a board of directors, has also been important to the organization from the beginning.
“Back in the early days of CattleFax, the organization was very heavily membership-driven, with producers in the cow/calf sector looking at the calf crop, marketing, understanding the market cycle and the analytics coming in,” explains Todd Allen, 2017-18 CattleFax president.
The people behind the business
Nearly all the analysts hired initially by CattleFax were young men and women just starting in the industry.
“We all had strong agriculture backgrounds, and we were raised in robust livestock and farming operations,” says Blach. “We knew the industry pretty well, but we didn’t know the markets nearly as well as our customers.”
“We got schooled on a regular basis by our members,” he continues. “They had a lot of fun with us, but we were able to learn quickly under fire.”
Early members of CattleFax were some of the greatest mentors and teachers in the industry, according to Blach.
Sparrowk Livestock in Clements, Calif. has been a member of CattleFax for over 40 years, and Jeff Sparrowk says, “My dad Jack has always been a big believer in CattleFax and what they do. They’ve helped us in our mission to sustain and improve an efficient, economically sound cattle operation since the 1960s.”
Mark Frasier of Frasier Farms in Last Chance, Colo. adds his father was an early adopter and early advocate of CattleFax.
“He relied heavily on the information and insight that CattleFax provided,” Frasier explains. “Information is key, and he recognized the value of that.”
Frasier has continued to use CattleFax data, noting insights from the organization has helped him to make decisions during never-before-seen drought and other market conditions.
“We’ve leaned heavily on the advice of CattleFax and our analysts to help us make decisions,” he says.
“The real difference-maker for CattleFax over time has been the volunteer leaders who have been willing to serve on our boards and have led this organization,” Blach comments. “The people who have carved out and defined the long-term vision have really made the difference in our business over time.”
“Whether it’s bovine spongiform encephalopathy, 9/11 or the housing crash, volatility is something we’ve always got to be aware of, understand and try to be prepared for,” comments Dale Smith, CattleFax president-elect from Amarillo, Texas.
For lenders, understanding volatility and the ability to minimize risk utilizing data is also important.
“In the commodity lending business – and particularly on the beef side, large quantities of money are needed, and we think it’s important for our customers to try to minimize risk as much as they can,” explains First National Bank of Omaha Senior Vice President Tom Jensen. “We think CattleFax gives them the tools to be successful in the marketplace with the volatility we see today.”
Beyond just beef industry analysis, CattleFax also looks at competing protein markets, grain markets and the global marketplace.
Field notes the ag industry is beginning to enter a period where data and high-powered analytics will be more and more important, particularly as the proliferation of data reaches never-before-seen volumes.
“We’re going to need somebody to help us interpret all this data,” he adds.
Frasier emphasizes, “CattleFax is becoming more of a filter and disseminator of good information for producers.”
At the same time, the organization continues to develop new tools to help measure and anticipate factors affecting volatility of markets.
“As markets become more and more global in nature, any changes – if anybody sneezes overseas – can have a tremendous impact in our marketplace,” Blach adds.
“The value of CattleFax will only go up,” Field adds. “I anticipate we will gain a competitive advantage in that we will have access to a trend faster than our competitors, because of our affiliation with this organization.”
But at the end of the day, Blach says CattleFax’s loyal clientele is the reason for their success over time.
“There have been a lot of changes in our business over the last 50 years, and we’ve had a number of people who have been customers since day one,” Blach says. “Our business wouldn’t be here today if we hadn’t had such loyal customers over time, and I can’t thank them enough.
Saige Albert, managing editor of the Wyoming Livestock Roundup, compiled this article from press releases, videos and other information. Send comments on this article to firstname.lastname@example.org.