Frequently Asked Questions

What is the Purpose of the Quality Beef Producers' Cooperative?

Quality Beef Producers' Cooperative is organized for the following purposes:

To provide a quality price and profitability for Quality Beef Producers' Cooperative members when selling their beef animals. Beef animals, including cull cows, bulls, and colored and holstein steers and heifers will be purchased on a formula basis based on grade and yield with premiums paid for top quality cattle which yield maximum performance and quality.
To develop and operate a quality, state-of-the-art beef slaughter facility, incorporating the latest technology in food safety and processing for optimum, long-term profitability. The facility will also be designed to allow entry into international markets.
To provide quality beef products to the consumer, which includes: consistency, food safety measures, source verification, private labeling, custom packaging, and marketing to enhance the value of our products. Further processing will be developed to include case ready products and value-added processing to meet consumer tastes and demands.
To market quality beef products at a quality price, where custom processing, packaging, the highest levels of food safety, and personalized service will provide profitability at levels above commodity pricing. Customer Satisfaction and dependability will be the driving factors in implementing and performing the marketing contracts.

Why is Quality Beef Producers' Cooperative being organized?

There are compelling reasons why producers need to organize and develop a new structure to sell beef animals and obtain maximum profitability for their individual interests. These reasons include:

Vertical integration from Farm to Table

There is a greater need than ever to garner efficiencies and value in the food chain. Consumers are concerned with food safety, and an organization that is positioned to operate with a source verification program that can certify and guarantee quality products from the farm to the table will develop and continue to command a premium in the marketplace for those products.

There is a consumer trend toward desiring further customization and processing of beef products, which will continue to increase. The best way to capitalize on this trend is to source very specific raw commodities, which can then be processed into the desired finished products.

Added Profitability for Quality Beef Producers' Cooperative Members

Cooperative members can realize additional profits from selling their products on a formula "yield and grade" basis over the spot price market, thus realizing the full value of each animal produced. Second payment would come in the form of a patronage refund at the end of the year, reflecting the profitability of the processing plant.

In addition, Quality Beef Producers' Cooperative will have direct control in determining the formula grid, based on current market conditions and the quality of beef animals being supplied to the plant.

Hide values can also be increased--non-branded hides are worth more to the end user, but today producers do not get an economic incentive to move brands or eliminate them.

Cycles in the Beef Industry

There is no doubt that the cycles turn and that profits to producers will increase and returns in the processing sector will decrease. By being a member in the cooperative, your overall returns should be higher through all cycles. When cattle prices are at an unprofitable level, you will receive the benefits of selling beef products. Because the co-op will be producing a higher quality beef, we should be in a position to maintain higher level of profitability than other processors. Additionally, because our membership has committed to deliver cattle, we will be able to operate our processing at an efficient capacity. For example, procurement costs for cattle will be significantly lower for co-op cattle than for a traditional processor.

Trust and Dependability

Our major objective is to add value to our agricultural commodity, cattle. In order to achieve this and receive all the value, it is essential to own an equity position in the beef processing facility. When you have an equity position in processing, you will know that you are getting everything the beef is worth and all the carcass data because you own the books. The added return we seek will not necessarily come through processing cattle, but taking that processed raw product and beef co-products and adding value to it.

Consistent Supply of Cattle

There is greater efficiency in consigning cattle for slaughter and scheduling cattle for certain deliver dates for both producer and the processing facility. The producer knows that his cattle will be sold on a certain day, and at the best price he could receive for each individual animal. The processing facility can plan and market the finished products, and can gain efficiencies in production and the sales as opposed to purchasing on the spot marked for the next day's kill. The cooperative will work closely with the processing plant in developing and producing specific types and quality grades of cattle for specific end-use markets.

Procurement flexibility

The cooperative will be made up of all segments of the beef industry, including dairy cows and bulls and fed cattle, including both colored and Holstein steers and heifers. We see a need to include all segments of the industry to most effectively compete in the marketplace--for flexibility and to guarantee the quality end product we desire.

Customer Satisfaction

Trying to be "all things to all people" is impossible in today's marketplace, particularly for small to medium-sized meat processors. The cooperative is developing customers for specific "niche" market items which will fully utilize every products from each animal--to beef cuts, ground beef, organ meets, offal, and hides.

Food Safety Issues and Concentration in the Beef Processing Industry

At least five beef processing plants have been sold, put up for sale or have closed in the last year due to food safety issues. Industry analysis say that they fear the mandatory imposition of Hazard Critical Analysis Critical Control Points Inspection (HAACP) on January 1, 1999 for all plants will cause many smaller plants to go out of business rather than face the required HAACP.

Increased concentration in the beef processing industry has put downward pressure on the price paid for cattle and will continue to do so. Quality Beef Producers' Cooperative members will be able to realize a more stable market for their cattle and the increased opportunity for profitability due to ownership interest in the processing facility.

Our studies show that a new, state-of-the-art plant will have significant advantages in HAACP control and also in marketing the finished products to end-use customers, including grocery store chains and further processors. Source verification is another important link in food safety, and being able to trace the farm source of each product will be an important part of our overall food safety program.

Where will the plant be located?

The plant will be located in Central Wisconsin

How many head of cattle do you expect to have participating in the Quality Beef Producers' Cooperative?

The initial interest in Quality Beef Producers' Cooperative has been great. It is difficult to predict because we have not completed our membership drive. All indications are that we will se an initial interest in Wisconsin and the surrounding states of approximately 40% to 90% of the total number of cattle needed to supply the processing facility. Once more producers become aware, it is anticipated that this number could increase substantially. The Processing facility will slaughter approximately 25,000 head of fed cattle and 75,000 head of cull cows and bulls annually.

What will it cost to join Quality Beef Producers' Cooperative?

The initial membership fee is $1,000 per individual and a registration fee of $60 per head committed in a uniform marketing and delivery agreement. This represents a one-time cost which will be used to purchase stock in Quality Beef Processing, LLC.