BEEF INDUSTRY WILL FACE CHALLENGES IN 2014

by: Stephen B. Blezinger
Ph.D., PAS

The first issue of the New Year always lends itself to speculation, forecasting and maybe even a little crystal ball rubbing to determine what's in store for the beef industry (any industry for that matter). Most producers are most concerned about the markets for the cattle themselves but also for input markets such as feed, fuel and fertilizer – generally the three greatest variable input costs. While these are of concern, as always, and require constant monitoring and management there are numerous other issues that continue to grow in an industry whose primary end product is food, an end product that is sold to a highly fickle and in general, poorly educated consumer. So let's talk about what is to come and how this may affect the cattle producer.

The Consumer

The beef industry has talked for years about generating a product more tailored to the wants and needs of the consumer. Initially this was in an effort to make beef less of a commodity and more of a value-added food that could command a greater price either at the meat case or in the restaurant and to maintain or strengthen demand. To a certain degree the industry has achieved this, especially those beef products marketed under specific branding that sell based upon a premise of greater quality, improved nutrition, improved healthfulness, etc.

Simultaneously the industry finds itself dealing with a more empowered consumer that recognizes that they can and do have a say in the food products they are buying – even if their information and product understanding is questionable. In many cases the consumer is now no longer only concerned with the cost of a particular food item, in this case a cut of beef, or its taste and tenderness. Many consumers are also concerned with a variety of other issues including but not limited to:

1) They may have a concern over what this animal is fed and if there are any residual materials in the beef product that could ultimately have an effect on them or their children (antibiotics and hormones, specifically). They have been told repeatedly that consumption of meat and milk from animals fed certain antibiotics has led to the creation of “super-bugs” that are resistant to some drugs used in human medicine to treat various infections. They are told that the use of hormones, i.e. implants, may have negative effects on their health and well-being and the onset of puberty in their children, possible reproductive consequences, etc. They are also told that the feed materials that food animals eat may be genetically modified (GMO) or treated with a variety of chemicals (pesticides) that can detrimentally alter the food product. All this said a great deal of question exists as to how we are feeding those animals ultimately used for food production and the related “healthfulness” of these food products.

2) They have concerns over how these animals are managed, housed and handled (animal welfare). They see the stories and the images on the nightly news, in papers and magazines and on the internet of examples of animal abuse and may tend to draw the conclusion that all animals are produced under these types of conditions. In numerous cases they do not realize that these images may have been staged. This perspective is trickling down to the meat, egg and dairy retailer, wholesaler and processor whose immediate, knee-jerk reaction, in many cases when stories of this nature emerge, is to distance themselves from the producer. These same “middlemen,” whose job it is to get product from the producer to the market may also restrict the purchase and concurrent sale of products produced in manners now considered questionable (even when repeated research and practice shows the inherent safety, i.e. Zilmax®).

3) They are concerned over the environmental impact of animal production systems. As far back as the late 80's and early 90's, interpretation of research data related to gas production by cattle (that produced as a by-product of normal rumen fermentation) delivered a message that cattle production contributed to “green-house” gas production and therefore was related to “global warming” and that cattle production (beef and dairy) left an undesirable “carbon footprint.” Many consumers continue to believe that global warming is a factual process despite evidence to the contrary and subsequently that food animal production negatively affects the environment.

4) They are worried with the safety of their foods. Regular stories come to light concerning the effect that the presence of a pathogen in a food source has on the health of one or more (occasionally many) persons. Many consumers still do not understand that these organisms are everywhere and proper management on the part of the preparer is critical.

So the consumer has a perception of beef and beef production not related to cost or to flavor and tenderness. This perception affects their buying choices and whether or not beef products have a place or a significant place in their diets.

A BIG problem with this is that for many consumers this perception is controlled by a media that is equally uninformed or is predisposed to deliver information that is not based on substantiated facts or is manipulated in such a way as to sensationalize an issue for the sake of drawing readership. The vast majority of the consumer base is far removed from the farm. The United States population is approximately 316 million people. Of this population around five percent are involved in production agriculture in some manner. This means that only a VERY small percentage of consumers have the first idea of how their food is produced or what is involved in getting it from the farm to their plate.

One of the greatest problems that the beef industry has is the ability to communicate effectively with its market, i.e. with the consumer. This becomes obvious to those of us in the industry that have the opportunity to discuss our business and products with the typical consumer on the street. For that matter often we have members in our own families and certainly friends and neighbors who have gross misconceptions about the production of the animal food products that they eat.

So what does this mean to the producer?

The average small cattleman may shrug his shoulders and say “OK, so what does this have to do with me? These are all issues that affect the big guys, not me.” At one time this comment may have had some accuracy but no longer. These issues are bearing down on each producer more closely every day and will be on each of our doorsteps before long.

1) Use of production tools such as implants, antibiotics and other feed additives. Most Ag professionals will agree that they see the day coming when these tools will no longer be available to the typical producer. The market for beef produced without the use of these products is growing daily. Fed antibiotics are under increased scrutiny. Some parts of the world such as Europe have already banned the use of antibiotics including commonly used additives such as the ionophores (Rumensin®, Bovatec®). Countries such Brazil (a major cattle producer) have forbidden the use of implants for years. The result producers will see as these products are restricted will be lower rates of gain and feed efficiency and potentially more health issues unless alternative products and practices are identified and adopted. Many of these opportunities currently exist and in many cases are related to the use of microbial and yeast products some of which have effects on rumen function, others which can stimulate immune response. Still others, such as products known as essential oils, are showing promise in both nutritional and health effects. The key here is that many of these products still require a lot of research to determine which work the best under different conditions.

2) Animal handling and welfare are under a microscope. Many companies who purchase and process various food animals are developing protocols that must be followed by the producer in order for their animals to be purchased by that said processor. An example of this is Tyson Foods. Back in the fall, Tyson issued a statement that they would no longer be buying cattle fed Zilmax®, a commonly fed additive known as a beta-agonist which enhances production efficiency in the later stages of the feeding period. Similarly, processors and retailers are beginning to closely monitor the actual day-to-day production and management protocols of producers in an effort to insure that food animals are handled humanely. A problem here is a difference in perspective when it comes to defining “humane.” An example here is a recent story out of the dairy industry in Wisconsin where a large dairy was told by its milk buyer that it would no longer be purchasing its milk due to the fact that videos were taken of the dairy employees using unacceptable methods to help lift a cow that had fallen and was unable to stand on its own. If you have been in the cattle business for any period of time you are probably familiar with the challenges of handling a “down cow.” The video showed the cow being lifted using a set of hip clamps and this was enough to create an uproar resulting in the processor refusing to purchase the milk from the dairy http://www.agweb.com/article/abc_reports_alleged_animal_abuse_in_wisconsin_dairy_NAA_Dairy_Today_Editors/. The video was taken by an undercover activist for Mercy for Animals. The MFA group and a variety of others find the practice of lifting these animals unacceptable. What many do not understand that the longer the animal is simply allowed to lay there, the less likely she will be to get up on her own if at all. The situation here is that many common on-the-farm practices are coming under increased scrutiny by individuals and groups that have no concept of what is required in the handling of a 1,400 lb. animal.

3) Perceived environmental impact and regulation is a growing issue for the producer. The EPA and similar agencies have increased efforts in many agricultural areas and in some case have become very aggressive in seeking out and fining producers who they deem in violation of state and federal environmental policy. Again, the industry has a problem here that so much of this policy is generated by individuals who have NO sense of reality in agriculture. Left unchecked, the producer can look forward to increasing regulation and compliance requirements. This will result in costs to maintain such compliance (a.e. control of runoff waters from pastures or pens where animals are grazed or held, etc.). Cattle producers will have to develop systems for handling these requirements and the resulting paperwork and reporting that is inevitable.

4) Food safety is a legitimate concern. However, as mentioned earlier, the pathogens (E. coli salmonella, etc.) are found everywhere in the environment. Thus an attempt to control or eliminate these organisms is an exercise in futility. Good management practices and good housekeeping procedures can potentially reduce these populations but in the long term the majority of the processes needed to eliminate the presence of these bacteria will fall on the cattle feeder and the processor. At least from a consumer perspective. It is important thought that the industry recognizes the need to continually deliver the message to the consumer that they have a responsibility in this process as well and that proper food/meat handling after purchase is critical to insure the safety of the product. None the less, producers should count on this issue trickling back to the farm level as well.

Again, these are only a few of the issues that will grow in stature as we, as an industry, venture into 2014.

So what's the answer? Above all, the beef industry MUST seek increased and improved means of communicating with the consumer. The consumer must gain a better understanding of beef production, value, safety, healthfulness. Delivery of the beef product from farm to the plate is not always the “prettiest” of processes, just like so many types of food production and we should never be accused of trying to veil or minimize what occurs. However, there are better methods of communicating this message than what the industry has used to date.

Additionally, our industry seems to commonly be at odds with many members of the media. In many cases this relationship seems to be adversarial. We have a need to improve this relationship so that the positive messages can be conveyed as well. Every producer has to become an ambassador for the industry and be prepared to discuss, not only the quality and value of the beef product but also how it is produced in an efficient, humane manner.

As always, the beef industry will face a long list of challenges not related to basic production. The producer is best served by working to understand these challenges and how he or she, individually, will address these and move forward in a positive manner.

Copyright 2013 – Dr. Stephen B. Blezinger

Dr. Steve Blezinger is a management and nutritional consultant with an office in Sulphur Springs, TX. He can be reached at sblez@verizon.net or at (903) 352-3475. For more information please visit us on at www.facebook/reveillelivestockconcepts.







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