Steve Paisley: The next challenge for the beef industry
February 11, 2011
As calving is in full swing and spring is on the horizon, producers in the area are looking at current calf prices and wondering how long they can be sustained. Feed prices are forecasted to be much higher, negatively impacting feeder prices, but also recent reports suggest that despite an improved economic environment for ranchers, national and regional cowherds continue to contract.
Demand for beef continues to be strong. While domestic beef demand has it’s challenges with a national recession and rising beef prices, the U.S. beef export market continues to improve. In addition to positive developments in trade relations, the value of the dollar continues to encourage further export growth.
In the middle of one of our recent cold snaps, the National Cattlemen’s Beef Association (NCBA) met in Denver to discuss current issues, as well as develop long-range plans for continued health in the beef industry. The NCBA policy division also met, discussing many of the legislative issues facing the industry. In addition to environmental, tax and regulation items, the policy division met to discuss ways to continue and improve on the health of the industry.
Over a year ago, a long-range planning task force was established, composed of members from all segments of the industry. They were commissioned to develop strategies to keep the beef industry viable with the goal of making beef the safest, highest quality, most consumer-friendly protein source while still being produced in an environmentally and economically sustainable way. Strategies discussed included: improving domestic consumer preference for beef; capitalizing on the global growth in demand for beef; strengthening the image of beef and the beef industry; and improving the industry trust with increased openness and enhanced relationships.
There are several other documents and surveys that would echo the task force’s recommendations. The 2005 national fed beef quality audit suggested that one of the top three comments from end users of beef were achieving a more global market access and meeting export requirements (i.e. age- and source-verification). Companies who export beef to foreign markets list age- and source-verification as their number-one concern. The 2007 non-fed beef audit also makes similar comments, with end-user surveys listing food safety, market availability and animal handling and welfare as their top three recommendations for future beef industry focus.
The recommendations from the task force should seem vaguely familiar to some of us in the beef industry. In the early 1980s, issues developed concerning injection site blemishes and the negative impact it was having on the beef industry. Beef Quality Assurance programs developed, and with the excellent work of many state organizations as well as national coordination, audits, research and educational efforts encouraged producers to make management changes that led to success. The most recent 2007 non-fed (cull cow and bull) quality audit indicated that over 98 percent of all beef audited was completely blemish free. The BQA and injection site story continues to be a positive reminder that we, as an industry, can make changes that improve the quality of beef without immediate economic reward.
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We have a similar situation right now. Consumers, exporting companies, and end-product users would prefer additional assurances as to the wholesomeness of the product that they are purchasing and marketing. We, as ranchers, are proud of the product that we produce. One way that we can provide additional assurances, as well as improve the marketability of our beef, is through voluntary source- and age-verification programs. There are several programs available, some managed through state and local organizations, some through companies and alliances within the beef industry. Source- and age-verification, when documented through the third-party verification of an approved QSA or PVP program, seems to also have economic benefits to the rancher, with several studies showing an $8-$28 per head premium for officially source- and age-verified calves.
Keeping source- and age-verification a voluntary program, and utilizing source and age to improve customer confidence and marketability is an achievable goal. If you are already keeping calving records, qualifying for source- and age-verification is a fairly straightforward process. If you are interested or considering source- and age-verification for this year’s calf crop, visit the USDA’s agricultural marketing service Web site at http://www.ams.usda.gov, or visit with your local extension educator.