Feedlot Project: A Key Link in the Beef Cattle Industry (2007)

 

• Introduction: 

   The following project is aimed at increasing the competitiveness of the Uruguayan livestock sector through the development of new livestock products.

   Uruguay’s livestock sector requires a series of innovations to improve its competitiveness. At the same time, it appears that the supply of cattle for slaughter may be nearing its limit due to recent high extraction levels and a relative stagnation in calving and weaning rates. This suggests that implementing new processes is essential to increase the cattle supply and improve extraction efficiency in the short and medium term.​

   The Livestock Business Plan described here introduces strongly innovative features that add value to beef production by enhancing efficiency and production flow throughout the supply chain. The innovations in this project are evident in three fundamental areas of the supply chain: Technology, Organization, and Commercialization.​

   It is important to note that the added value generated by this initiative directly benefits all stakeholders, starting with improved economic and strategic results for producers and extending to the industry, which gains from a consistent supply of high-value product categories that are experiencing growing and sustained demand.

​   Integración Agropecuaria is an agricultural services company that has demonstrated a clear vision for seizing opportunities to implement this type of innovation since its establishment in 2003. The project presented here is based on over two years of experimentation in the feedlot business and 12 years of experience fostering loyalty among cattle producers in pasture-based systems.

The objective of this project is to introduce a new process (a “key link”) in the beef supply chain that allows "pasture-raised" steer producers easy access to feedlots as an alternative for finishing their cattle, maintaining ownership and avoiding significant upfront costs for feed, management, etc.​

   This process relies on capitalization contracts where the producer "transfers" a significant portion of the inherent risks of cattle fattening and finishing to the feedlot, improving their economic equation and productive capacity on pasture. This represents one of the key differentiating elements from the hotel feedlot system.

Furthermore, the feedlot business is strengthened through a Loyalty Program that guarantees the intake of third-party cattle for fattening, significantly reducing its financial burden.​

   The project also positions the feedlot as a key player in improving relationships between producers and the industry, creating greater integration within the beef supply chain. Acting as a heavily involved intermediary, the feedlot can effectively communicate requirements, objectives, and limitations between parties while providing the necessary technological, organizational, and commercial elements to facilitate and enhance the business for both sides.

   The impact of this initiative on production consistency and supply stabilization is clear. The industry often struggles to fulfill client orders for special-quality products due to a lack of sufficient suitable cattle. This project proposes solid mechanisms to address this issue by transferring the industry’s needs to producers, ensuring timely and adequate supply in exchange for pre-agreed price and purchasing conditions before entering the feedlot. In short, it creates “clearer rules” for everyone.

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• Objectives:

 

The primary goal is to promote and enhance beef production for high-value market segments through the use of feedlot systems in Uruguay. To achieve this, proposals must be established to improve the supply available for pasture-based producers. Improvements must cover both qualitative and quantitative aspects to ensure the long-term viability of the system, adequately addressing quality management parameters essential to enhancing the final value of livestock production.

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This involves the systematization of processes to ensure that the quality and quantity of cattle entering the feedlot meet the necessary requirements for the desired final product. Furthermore, management and evaluations during the fattening period must ensure the highest percentage of animals achieve high final value (Choice). Relevant variables influencing the business and their weighting must be identified to optimize the value of cattle entering the feedlot, positively impacting the profitability of the livestock business.

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