Source: CUSTOM AG SOLUTIONS, INC. submitted to
RESEARCH AND DEVELOPMENT OF A CATTLE MARKETING PORTAL TO IMPROVE SMALL AND MID-SIZE CATTLE PRODUCERS` MARKET AWARENESS, PLANNING, AND DECISIONS
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
SMALL BUSINESS GRANT
Reporting Frequency
Annual
Accession No.
1024536
Grant No.
2020-39410-33227
Cumulative Award Amt.
$650,000.00
Proposal No.
2020-07049
Multistate No.
(N/A)
Project Start Date
Sep 1, 2020
Project End Date
Aug 31, 2022
Grant Year
2020
Program Code
[8.12]- Small and Mid-Size Farms
Project Director
Crosby, B. C.
Recipient Organization
CUSTOM AG SOLUTIONS, INC.
27 W MAIN ST
COWLEY,WY 824200000
Performing Department
(N/A)
Non Technical Summary
In the U.S., small and mid-size operations (1-499 animals) account for 78% of the beef cattle industry's $31.4B in annual sales. Unlike large producers, who commonly develop and utilize comprehensive marketing plans, most small and mid-size producers lack the technical sophistication and operating scale required to make effective use of available marketing information, strategies, and tools, including forward contracts, futures, and options. In failing to utilize available marketing tools and strategies, the small and mid-size producer segments effectively transfer over $4.3 billion in annual market value to more sophisticated upstream industry participants, including auctions, cattle buyers, feedlots, and packers.The research team previously developed a prototype cloud-based cattle marketing portal (CMP) designed to dramatically improve smaller producers' marketing capabilities and results. The portal enables producers to 1) track individual cattle lots, 2) access and analyze relevant and timely market information, and 3) evaluate and implement improved marketing alternatives that consider a combination of production practices, marketing strategies, and risk management tools. The CMP has tremendous potential to improve market outcomes for small and mid-size cattle producers and is viewed by producers as functionally accessible and likely to improve marketing results.Under the SBIR Phase II project, the research team will obtain, validate, and integrate improved market data to enable the CMP to support a much wider range of producer sizes, types, and geographic regions. As availability of CMP tools and analytical results is expanded, the team will test and analyze CMP outputs across producer segments and then further expand the CMP's capabilities to improve producers' marketing results. Finally, during Phase II, the team will use site usage metrics and user feedback to create a unique and enhanced user experience through continuous application improvements. The Phase II effort will follow a detailed work plan centered around an iterative development cycle and designed to accommodate uncertainties in data inputs and dynamic user requirements.
Animal Health Component
10%
Research Effort Categories
Basic
(N/A)
Applied
10%
Developmental
90%
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
60333993010100%
Knowledge Area
603 - Market Economics;

Subject Of Investigation
3399 - Beef cattle, general/other;

Field Of Science
3010 - Economics;
Goals / Objectives
At a high level, the project seeks to develop and deliver a cloud-based cattle marketing portal (CMP) designed to dramatically improve the marketing capabilities and results of small and mid-size U.S. beef cattle producers. The CMP will enable producers to 1) track individual cattle lots, 2) access and analyze relevant and timely market information, and 3) evaluate and implement improved marketing alternatives that consider a combination of production practices, marketing strategies, and risk management tools.Technical objectives are as follows: 1) Demonstrate that the CMP decision-support tools can integrate several different types of new and additional market transaction data and data structures obtained from multiple sources to provide robust individualized analytical results for cattle producers across a variety of expanded geographic regions; 2) Show that the CMP can improve marketing results and produce financial gains across a wide range of producer sizes, types, and geographic regions; 3) Determine the factors that lead to producer acceptance and continued use of the CMP and identify CMP features and enhancements that are most likely to improve the user experience and promote continued use by both individual producers and ag lenders.In accomplishing the noted objectives, the team will seek to establish commercial viability of the CMP by addressing several key risk factors: 1) can the CMP can be expanded and refined to support use by diverse producer types across the country; 2) will the CMP generate sufficient improvement in producer outcomes such that producers or lenders will pay for its use; and, 3) will the CMP design sufficiently engage producers so that they continue using the tool to make improved marketing and risk management decisions from one marketing year to the next.
Project Methods
The project's research activities will be directed across three main efforts: 1) integration of new market data, 2) creation of demonstration models to show CMP efficacy across a range of producer types and locations, and 3) execution of an iterative development cycle wherein the project team incorporates CMP use patterns and direct feedback as it prioritizes enhancements to both the CMP and its educational components to ensure producer acceptance.Integration of new market dataCMP data and analytical outputs meet a minimum threshold of statistical accuracy. Specifically, analytical models developed using new and combined data sources will be evaluated for acceptable predictive accuracy using a benchmark of 90% accuracy relative to comparable models developed from standardized data sources.Creation of demonstration modelsHypothetical model ranches using the CMP will realize at least a 10% improvement in market outcome (marketing revenue) relative to a baseline scenario in each of the Phase II marketing years (2021 and 2022). Test producers and agricultural lenders will indicate that continued use of the CMP is likely to deliver improved financial outcomes; assessed using a 1-5 (disagree-agree) Likert scale instrument, with a success target of scores of 4 or 5 among 70% of respondents. Computer Simulations based on historical market performance will demonstrate that producers could have used CMP-support risk management tools to achieve 10%+ revenue improvements relative to no risk management in nine out of ten marketing years.Producer acceptanceUser enrollment, interaction levels (e.g., lots entered, analyses run, tutorials completed), and reengagement statistics will be captured and reported, with success realized through improved results over time. Test producers, general users, and lender users will, during or after CMP sessions, sometimes be prompted to complete usability assessments using a 1-5 (unfavorable-favorable) Likert scale instrument, with a success target of scores that reach to 4 or 5 among 70% of respondents by the end of Phase II. Sample Likert assessment questions are included below:- I found the CMP to be easy to understand and use.- I utilized the CMP's available training and support content and tools.- I am more willing to use futures and options because of my experience with the CMP.- The CMP improved my marketing results.- I was able to identify marketing opportunities using the CMP that could improve the overall marketing performance for my operation.- I adopted a new production, marketing, or price risk management strategy as a result.- Using CMP information and analytics, I developed a marketing plan for my operation.

Progress 09/01/21 to 08/31/22

Outputs
Target Audience:The project is being conducted for the benefit of small and mid-size U.S. beef cattle producers. USDA defines small farms as farms or ranches with less than $250,000 in annual agricultural sales; mid-size farms are defined as farms or ranches with less than $500,000 in annual agricultural sales. Using the USDA ERS 2017 gross revenue estimate of $996 per cow, a 500-cow operation will generate less than $500,000 in annual revenues, qualifying operations up to 499 animals as small and mid-sized farms. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest?The project team communicates with producers and other industry stakeholders using a combination of social media, direct contacts, and updates posted to the BeefBasis.com website. Articles written by livestock industry experts and appearing in major cattle industry publications included forecasts generated using CMP tools at BeefBasis. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? During the second USDA Phase II SBIR annual reporting period, CAS continued to research methods ofintegratingmarket datafrom alternative sources into the BeefBasis.com data repository. Further research was conducted to validate data and employ new data through model updates to improve and expand enhanced lot management and decision support tools that provide value to a wider range of cattle producers and industry stakeholders. The project team interacted with cattle producers and industry stakeholders from several groups to obtain feedback about tool usage and effectiveness. Feedback was solicited from CMP users via electronic survey instruments and telephone interviews. These efforts were designed to obtain feedback from several different user types to includecattle producers, agricultural lenders, and other industry stakeholders. The team continued to manage, monitor, and analyze model ranches for use in demonstrating and evaluating marketing decision support through the BeefBasis.com website. Updates were shared via the website and social media. Extensive additional enhancements to the website portal were accomplished during the second period, including further improvement of the user database and contact management system. The team completed development of a system for obtaining targeted user feedback as part of the ongoing development process. The BeefBasis.com website gained a total of 465 verified users during the second project reporting period, and new registrations have continued to increase sincethat time. Finally, the project team progressed toward commercialization through ongoing conversations with potential partners in defined user segments. The project team has advanced previousdiscussions with prospective agricultural lender clients as well as commodity brokers,cattle marketing consultants, livestock insurance agents, and feedlot management groups. All five groups expressed interest in using the tools to improve their capabilities in supporting the marketing success of their clients, who are often small and mid-sized cattle producers. Conversations included discussions of preliminary partnership agreements and trial usage feedback arrangements for beta testing. The team has collaborated with experts to refine a commercialization strategy and develop documents for business planning and revenue forecasting.

Publications


    Progress 09/01/20 to 08/31/22

    Outputs
    Target Audience:The project is being conducted for the benefit of small and mid-size U.S. beef cattle producers. USDA defines small farms as farms or ranches with less than $250,000 in annual agricultural sales; mid-size farms are defined as farms or ranches with less than $500,000 in annual agricultural sales. Using the USDA ERS 2017 gross revenue estimate of $996 per cow, a 500-cow operation will generate less than $500,000 in annual revenues, qualifying operations up to 499 animals as small and mid-sized farms. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest?The project team communicates with producers and other industry stakeholders using a combination of social media, direct contacts, and updates posted to the BeefBasis.com website. Articles written by livestock industry experts and appearing in major cattle industry publicationshave included forecasts generated using CMP tools at BeefBasis. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

    Impacts
    What was accomplished under these goals? Under Phase II of a USDA SBIR project, Custom Ag Solutions (CAS) conducted research activities to obtain, analyze, and integrate market data into the cattle marketing portal (CMP) that was developed as a prototype during SBIR Phase I. Building upon previous findings of conceptual feasibility, CAS sought to test and enhance functionality, refine the tools, and move the prototype toward commercialization. Specifically, statistical research was conducted to establish best practices for using data from alternative sources and to expand functionality and results that can be provided to improve marketing results for U.S. cattle producers. The team also tested and analyzed CMP outputs and gathered feedback from users and interested stakeholders . Siteusage metrics, monitoring tools, and feedback instruments were developed to facilitate ongoing evaluation as part of an iterative development cycle and continuous application improvement. Key findings included: The project team conducted applied research, statistical analysis, and evaluation of modeling techniques to identify effective methods for incorporating expanded alternative market data into CMP cattle producer decision support tools. CAS identified and evaluated expanded additional market data that can be used to improve the CMP tools and identified options for ongoing data acquisition. As a result of work and research conducted to analyze data during Phase II the CMP is expected to have a strategic advantage moving forward into further commercialization. Feedback gathered during Phase II confirmed that users believe CMP tools help them achieve improved marketing outcomes. Market simulation functionality integrated into lot management tools demonstrates the potential for financial gains for individual users. The project team has used site metrics, usage monitoring, and user feedback instruments to continuously improve the accessibility and functionality of the decision support tool for different user types. The commercialization strategy for the CMP is built around developing relationships with institutions who are already partnered with cattle producers. These include agricultural lenders, livestock insurance agents, commodity brokers, consultants, and feedlot management groups. Commercial success of the CMP will be enhanced by leveraging these existing relationships. The cumulative result of Phase II research and development was to establish that the CMP is a commercially viable software as a service (SaaS) product with potential to benefit a wide range of small and mid-size beef cattle producers. In addition, the CMP will benefit institutions that partner with and support cattle producers (i.e., lenders, insurance providers, brokers, consultants, and feedlots). Phase II research demonstrated that the CMP can be expanded and enhanced to meet the needs of diverse users by integrating additional market data, generates improved market outcomes for cattle producers, and has been able to gain user acceptance and meet dynamic user requirements through an iterative development cycle. Additional project accomplishment details areincluded below: During USDA SBIR Phase II, CAS research methods of integrating market data from alternative sources into the BeefBasis.com data repository. Research was conducted to validate data and employ new data through model updates to improve and expand enhanced lot management and decision support tools that provide value to a wider range of cattle producers and industry stakeholders. The project team interacted with cattle producers and industry stakeholders from several groups to obtain feedback about tool usage and effectiveness. Feedback was solicited from CMP users via electronic survey instruments and telephone interviews. These efforts were designed to obtain feedback from several different user types to include cattle producers, agricultural lenders, and other industry stakeholders. The team developed, managed, monitored, and analyzed model ranches for use in demonstrating and evaluating marketing decision support through the BeefBasis.com website. Updates were shared via the website and social media. Extensiveenhancements to the website portal were accomplished, including implementation and improvement of a robust user database and contact management system. The team also developed of a system for obtaining targeted user feedback as part of the ongoing development process. The BeefBasis.com website gained more than 900 verified users during Phase II, and new registrations have continued to increase. Finally, the project team progressed toward commercialization through ongoing conversations with potential partners in defined user segments. The project team held extensivediscussions with prospective agricultural lender clients as well as commodity brokers, cattle marketing consultants, livestock insurance agents, and feedlot management groups. All five groups expressed interest in using the CMP tools to improve their capabilities in supporting the marketing success of their clients, who are often small and mid-sized cattle producers. Conversations included discussions of preliminary partnership agreements and trial usage feedback arrangements for beta testing. The team has collaborated with experts to refine a commercialization strategy and develop documents for business planning and revenue forecasting.

    Publications


      Progress 09/01/20 to 08/31/21

      Outputs
      Target Audience:The project is being conducted for the benefit of small and mid-size U.S. beef cattle producers. USDA defines small farms asfarms or ranches with less than $250,000 in annual agricultural sales; mid-size farms are defined as farms or ranches with less than $500,000 in annual agricultural sales. Using the USDA ERS 2017 gross revenue estimate of $996 per cow, a 500-cowoperation will generate less than $500,000 in annual revenues, qualifying operations up to 499 animals as small and mid-sizedfarms. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest?The project team communicates with producers and other industry stakeholders using a combination of social media, direct contacts, and updates posted to the BeefBasis.com website. What do you plan to do during the next reporting period to accomplish the goals?During the next reporting period, the project team intends to continue to employ our rapid-prototyping framework. We will gather evaluation and feedback on initial progress and development outputs. We will continue to follow an evolutionary cycle of Design > Implement > Verify > Evaluate Specifically, we intend to further refine and develop the test ranch models and expand the distribution of content as a recruiting / training tool for producers. Additional tool development, data integration,and expansion of model geography is planned during winter 2022. User feedback instruments will be distributed to the existing user database and evaluation of results will be incorporated into future development efforts during the next reporting period. Commercialization efforts will continue as the team interacts with several types of prospective users, including lenders, livestock insurance agents, marketing consultants, and of course individual producers. These efforts will include furthering discussions to obtain partnership/investor funding for project Phase III.

      Impacts
      What was accomplished under these goals? Duringthe first USDA Phase II SBIR annual reporting period, CAS conducted research to integrate new market data, from multiple sources, into the BeefBasis.com data repository. Research was conducted to validate these data and employ them through model updates to improve and expand prototype lot management and decision support tools that provide value to a wider range of cattle producers and industry stakeholders. The project team interacted with cattle producers and industry stakeholders from several stratified groups to obtain feedback about tool usage and effectiveness. The team worked to develop model ranches for use in demonstrating and evaluating marketing decision support through the BeefBasis.com website. Extensive enhancements to the website portal were accomplished during the first period, including implementation of a robust user database and contact management system. The team began development of a system for obtaining user feedback as part of the ongoing development process. The BeefBasis.com website gained a total of 443 verified users during the project reporting period, and the rate of new registrations was increasing over that time. Finally, the project team worked toward commercialization through ongoing conversations with defined user segments. These included discussions with prospective agricultural lender clients as well as cattle marketing consultants and livestock insurance agents. All three groups have expressed interest in using the tools to improve their capabilities in supporting the marketing success of their clients, who are often small and mid-sized cattle producers.

      Publications