Forget the Rear View Mirror
By Trent LoosThe current division in the beef industry is dangerous ground in American Agriculture. I frequently see letters and commentaries bashing the activities of R-Calf. While I typically encourage others to speak their mind and get involved in the process, I, too, disagree with R-Calf. I am not critical because they are speaking up but because their leadership is steering their 14,000 members in the wrong direction.
I know many of the cattlemen that have joined R-Calf and they are dedicated to producing good cattle. The problem is that many of them have been convinced that they are just raising cattle and not beef. How can that be? If you don’t understand this fundamental thought, you won’t understand why the movement has gained such strength.
Many producers have been so mesmerized with R-Calf’s public agenda, issues like fighting the Check-off, mandatory COOL, the Canadian border and packer contracts, that they miss the underlying threat of the organization, which affects the structure of our industry. I liken it to driving down the road in my Chevy truck and spending more time looking in the rear-view mirror than at what lies in the path ahead. The movement is about trying to prevent the advancement of the beef industry. They want to keep things the way they have been in the past rather than seek viable options for the future.
The systematic approach and horizontal coordination by many cattlemen in this country is perceived as a loss of independence. The common belief is that chicken and pig consolidation occurred because the packer gained too much control. Consequently, the hot-buttons that R-Calf has selected work extremely well in recruiting members that have no real understanding of who or why the group really started.
I would like to point out something that many people seem to overlook. The poultry and pork industries are vibrant in the United States. While we may not be fond of the structure compared to that of the past, these producers have not suffered the fate of the sheep industry. Today, the American Sheep Industry boasts about an inventory in excess of seven million head but as recently as 1948 there were sixty million sheep in the U.S. That is where the arrogance of today’s cattlemen may cause problems because we are led to believe that the American Consumer has a specific taste for US BEEF. But how can we be sure?
The results of an Illinois School Lunch research project were recently announced. School kids admitted that they would consume the same amount of soy products formulated to taste like their meat counterparts. The soy substitute costs 2/3 of what the same meat item would cost. Researchers are working feverishly to create soybean imitations of meat items. They have been able to replicate the flavor and once the texture matches consumer expectations, what do you think will happen if they are 2/3 the cost of beef?
In another bit of irony, we cattlemen of the country couldn’t image driving anything but our favorite brand of pickup. Many in the financial world have long said, “As goes General Motors, so goes America.” General Motors once enjoyed a 60% market share with American consumers and now stands at an all-time low of under 25%. What about other American-made automobiles? Ford and General Motors face downgrades to junk status, or non-investment grade, because of falling profits caused by rising costs and market-share losses to Asian rivals. Ford's U.S. market share is at quarter-century lows, and GM is at its lowest point in 80 years. Nissans market share in the U.S. was up 24% at 985,988 units in 2004. During the same period Honda, Nissan’s closest competitor, sold 1.3 million vehicles.
If the American consumer’s desire for beef is to continue, everyone in the beef industry needs to realize that we are not granted the right to be cattlemen, we must earn it. I challenge anyone to name a product that consumers will purchase, regardless of cost, just to keep an industry from becoming extinct. There will always be a demand for preferred products produced in a least-cost manner. If you believe otherwise, you probably believe that Vatican City just contacted me about an opening they have.
The purpose of a rear-view mirror is not to determine where we want to go but rather to keep track of who is coming up behind us. As long as we have too many in the industry focused on the rear-view mirror instead of the windshield, we will be unable to address the real issues that challenge our longevity.
