Beef producers must meet consumer demands

By MONETTE TAYLOR | South Central Texas Edition

August 15, 2002 -- There is no doubt the future of the beef cattle industry is facing many changes, and producers attending the 48th annual TAMU Beef Cattle Short Course were informed of various challenges regarding those changes.

A common point made by all speakers during the event was: The bottom line for cattle producers is the customer. If the public doesn't purchase beef, nothing they do will really matter.

Beef consumption over the past 20 years ago has declined, even though the price consumers pay has also gone down, noted Dave Nichols, owner of an Iowa seed-stock operation. Meanwhile, poultry has tripled in consumption (still at 1970's prices), and the pork industry has stayed level.

"I maintain that our problem in the beef industry (is we are) trying to sell a commodity product when all our competition is selling a 'value-added'", branded product.

"Certified Angus Beef was the fastest growing protein product from '90 to '98. Certified Angus Beef is nothing but an average, Choice animal that's black," he added.

Some of the "blame" falls on the move toward generic products, said Nichols, a situation that seems to have even affected the meat industry. Too, the old customer who would purchase a piece of wrapped meat, season and cook it from scratch, has almost disappeared. The new customer is more interested in "directions" on the back of a branded, prepackaged meat product ... not in recipes.

Not only do customers not have the time to cook, many who do choose to use that time to do something else, said Nichols.

He added he believes the future will depend largely on information data that is collected on individual cattle, and that very soon, "the only way we will sell cattle is on a grid."

Nichols warned that taking care of the animals, humanely, is what many people are wanting and watching for, and that producers need to be very aware of this when castrating and dehorning their cattle.

As far as forming alliances, Nichols offered they are "nothing more than being a good neighbor."

He believes customers are willing to pay for quality, so producers should listen to what they are asking for in meat products.

Along those lines, Dr. John Paterson of Montana State University was in agreement.

"Branded meat equals trust ... for the consumer; the number one concern is providing a variety of meat selection for the family," he said.

Paterson said certified beef is selling at a rate of one million pounds every five hours that a store is open. That's a lot of meat!

For the general public, branded or certified products equal beef safety, too. With the recent recalls and a possible death linked to the recalled meat, consumers are focused more than before about the safety of the meats they purchase.

He added he believes, in the next year, branded products will increase by at least 30 percent.

Many of today's beef cattle alliances offer a branded, or certified, product. "Nine percent of the producers own 50 percent of the cows in the United States," he said.

Many producers, around 90 percent, do not belong to alliances, yet, and Paterson believes this is because they are waiting to see if they actually add any profit to their ranches and products before joining.

Also, he said that there is not a "single solution," but that the markets and global needs will play a large part in decisions made in the future.

In closing, Peterson mentioned three areas of concern for producers: seizing new opportunities and markets in a global economy; industrialization of case ready products and watching for market signals; precision in consistency, packaging solutions, reliability and repeatable products and uniformity; and the importance of communication and information sharing between retail, producers and packers. Without customers, none of this matters.