Who is the Real Customer?
By Trent LoosThings haven't been this good in the beef industry for a long time. Per capita beef and meat consumption is at an all-time high. We live in a time of historical highs for fed cattle, despite a day last December that experts predicted would wipe out the industry if it ever occurred. Feeder calves are bringing excellent prices. If you are unfortunate enough to be in one of the drought areas of the Plains, you are not hurt financially by liquidating cows for around $1200 per pair.
The Minnesota Beef Council reports consumer demand for beef continued a strong upward climb in 2003. The Beef Demand Index increased more than five percent compared to 2002 and more than 15.4 percent since reversing its 20 year decline in 1998. Consumer demand for beef showed continued strength in the first quarter of 2004, with preliminary data showing the Beef Demand Index increased 10.4 percent compared to the first quarter 2003. The Beef Demand Index is a reflection of the combination of per capita consumption and consumer spending for beef.
Yet many called the week leading up to the largest grilling day of the year "a bad week for beef." How can that be?
The U.S. Department of Agriculture, our safety net, either didn't know or didn't stop packers from importing ground beef, hamburger patties, pepperoni and beef trimmings from Canada, despite a ban on those products imposed in August of 2003. Estimates suggest that 7.3 million pounds were imported and while some are suggesting that this is a health risk, Canada is reporting a five percent increase in beef consumption in the past year.
On May 24, 2004 the U.S. Supreme Court decided to review a lower court ruling that the national beef check-off is unconstitutional. This check-off generates $85 million annually and, according to the Nebraska Beef Board, has helped increase consumer demand for beef by more than 16 percent since 1998.
Then the bomb drops. R-CALF, a grassroots organization that claims to represent 9,000 cattlemen in the United States, called on the USDA to "take action to protect the beef-buying public and the U.S. cattle herd from bovine spongiform encephalopathy (BSE)." These actions include continuing the ban of beef imports from Canada until further scientific study and discussion is undertaken.
While this did not come as a surprise, what got everyone in a tizzy was R-CALF's co-conspirators. The group teamed up with three organizations that have repeatedly tried to scare consumers about the safety of beef. There have been many responses to R-CALF teaming up with anti-beef groups but I have yet to hear anybody ask the real question, "Why?" Why are so many grassroots cattlemen disgruntled in the best times in the beef industry?
The check-off is mandated, pure and simple. Anything mandated in this country will be challenged. No one can doubt the positive impact the $1 per head contribution has made, although the arrogance in which it has been administered has, in many cases, been like throwing salt into a wound.
R-CALF, representing one percent of the cattle owners in the United States, has grown a membership list by attacking the establishment. Whether it be the USDA or their other favorite target--the packers. They target packer control and too much consolidation in the industry. The irony is that we have had many niche markets develop and grow during the same period of time that they have been preaching against packer control. So who has been fueling this fire?
I have heard far too many cattlemen in the past two years say, "I don't produce beef, I raise cattle." Since people tend to believe what they hear most frequently, I think it would be wise for everyone in the industry to sit down and give some real thought to who the finger is really being pointed at. How much do we know about the cattle we produce? How much do we know about what the customer wants? Who can help us get a greater share of the food dollar?
The food business has truly become about information--the ability to generate data about the "right kind" of cattle and increase the number of these animals. As cattlemen, we all need to step back and ask, "Who is getting me the information I need to continue to produce what the real customer desires?" A perfect example is the information feedback from branded beef programs to the producer about what the consumer wants.
So why are so many grassroots cattlemen disgruntled with the current system? These are indeed hard working families that want no more than the ability to pass on their ranch to the next generation. It is just unfortunate that they have been so misled about who the customer is for our product. The real customer is the people who choose to put beef on their table!
