My View From The Country

The American Cattle Industry Is Far From Doomed

As an industry, we must embrace the concept of taking risk, and adapting to a rapidly changing world.

Listen to some of the pundits and you likely could be convinced that the American cattle industry is in trouble. First off, I’ll admit there are conditions that make it possible to paint a bleak picture, as essentially 30 years of falling demand have helped shrink, consolidate and contract the industry.

But the demagogues have always been out there, preaching that our problems are someone else’s fault, and outside forces are conspiring against us. They blame the economy, multi-national packers, corporate feeders, exports, the government, even capitalism. Such naysayers have been around since the first cow changed hands, and they seem to have grown to be a self-sustaining voice. The typical producer may not be a follower of these groups that actually need a declining industry to prosper, but we shoulder some of the responsibility for their existence.

In my office, I keep a big white board on which I keep my to-do list. The current list includes sorting calves, moving calves to the feedyard, getting feed purchased and delivered, prairie dog and weed control, lining up ultrasound, etc. I mention the list only because it illustrates that most of us are consumed with the daily tasks required to keep our operation going.

I understand how important the health of our industry is to my bottom line in the long term. And I understand that our silo mentality can be destructive to building demand and remaining competitive with the other proteins. However, necessity dictates that I spend most of my time working on my own operation’s success and survival.

But the industry does face threats, and given the trend lines of those threats, the industry does seem to lack urgency at addressing them, and it certainly lacks accountability. It seems like everyone has an excuse why falling beef demand or the lack of industry profitability isn’t their problem. And the internal bickering that’s escalated to a whole new level in the last couple of decades has created organizational chaos on the national level. The fragmented nature of our business means we have no plan and certainly no overriding strategy.

While it’s true the industry puts significant effort into formulating a long-range plan to guide decisions from the top down to the committee level, in reality, it isn’t something the industry wakes up and focuses on achieving on a daily basis. It’s far more likely to serve as a rallying point, similar to when the U.S. shouldered the challenge of putting a man on the moon. Part of the reason the industry’s long-range plan hasn’t had the impact it should is the limited funding. Thus, like most ag organizations, the focus is putting out the daily fires, rather than preventing the fires in the first place.

As an industry, we must embrace the concept of taking risk, and adapting to a rapidly changing world. We don’t have to accept plummeting demand and a shrinking industry.

I’m 100% confident that the U.S. cattle industry’s future is extremely bright, and I base it on the strength of the people involved in this industry. They’re some of the world’s most capable, and I’ll put the work ethic of the men and women in this industry up against anyone. They also have values, and enthusiasm and passion for what they do. The American cattle industry will prosper because of the strength of people involved in it. 

But we must confront some issues that have hindered our progress. For instance, we typically haven’t acted quickly or boldly enough when it comes to aggregate industry challenges and opportunities. Organizations have feared making mistakes or offending someone. And there’s a tendency to focus on things largely outside of our control – BSE, ethanol subsidies, the value of the dollar, trade barriers, even the practices or preferences of packers, retailers or consumers.

I believe we must eliminate the caretaker mentality so pervasive in our industry. Of course, we believe strongly in our role as caretakers of the land, our animals, and traditions and values – it’s fundamental to us. But outside of our industry, the word caretaker doesn’t have the positive connotation we ascribe to it.

 

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Our goal can’t be to maintain the status quo in a rapidly changing world. We must embrace change; that requires a non-caretaker type of mindset. If this industry is doing things the same way five years from now as we are today, then we should expect margins to be narrow, demand to decline, and the industry to continue to contract.

It’s not a question of whether the people in this industry have the intellect or fortitude to make dramatic changes, and it isn’t a question of whether we know the dramatic changes that need to be made to alter our path. It’s a question of how, as a fragmented, predatory, and hugely independent industry, we can unify around the causes and changes that are needed.

I have faith because the overwhelming majority of those involved in this industry understand that we must ensure that our industry will be better when our kids inherit it. They believe in what we’re doing, and understand what this industry contributes not just economically to our great country. When pulling together on the same team, we are a powerful positive force.

 

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Discuss this Blog Entry 3

Anonymous (not verified)
on Aug 24, 2013

Troy, It seems to me that nearly all industries have followed the same path of consolidation that leads to anti-competetive situations resulting in less customer service and higher prices (for the most part). It's the European Model that's taught in corporate MBA programs. I had all this explained to me in early1980 and. I thought it was preposterous, but the game plan has plalyed out exactly as described by one of then 2 survivors of the animal health distribution business. I would love to give you the other side of the story sometime --- it's not speculation --- it was predicted and happened exactly as predicfed. Capitalism? I don't think so!! Give my best to Lorna. Sincerely, Tommy Donnell.

W.E. (not verified)
on Aug 29, 2013

Cattle are not, at the grassroots level, an industry; the industry part is mass-marketing beef. Cattle producers should be leaders in the realm of caretaking. By the natural requirements that calves be born and raised to weaning in our pastures, we cannot be called industrialists. Poultry and pork producers have become largely industrial. Our strength is that we cattlemen are, rather, husbandmen: caretakers. Caretaking has always, since livestock were first domesticated, been essential to the nature of animal husbandry. Caretaking can in the 21st century become what differentiates our product from other proteins, winning back market share. The artifice of the present market system is the real problem. The feedlot marketing mentality held us back for decades. We once tried to participate in the beef industry, allowing it to tell us what to do, and we tried to do it according to their instructions. But the rules kept changing. When we were called upon to do anything at all to make a profit, we allowed our better judgment to submit to a hard-nosed economy that was both destructive and self-destructive, that did not promote or reward care of our animals, our land, or our family, let alone care for our neighbors. The industry actually recommended that we do harm. We were reminded of what is stated in Psalm 24:1, which brought us to understand over a decade ago that trucking our calves a thousand miles to join 10,000 other calves where they would be fed corn in a small space could not be called caretaking. We now produce all-natural all-grassfed beef that a growing number of people with health problems are hungry for, close to home. Grazing the cattle here improves our land, allows the cattle to live like cattle, benefits our neighbors and helps our family.

on Aug 29, 2013

I congratulate Troy on a thoughtful and honest assessment of where the industry stands and the importance of taking responsibility for the future of the industry. It always has bothered me when i see articles here and elsewhere where cattlemen whine about all of our woes and blame them on someone else (the animal rights people, environmentalists, etc.). The fact is times have changed and will continue to change. Methods our grandfathers practiced are not acceptable today and most of us would say don't make good economic sense anyway, at least not in today's environment. While a very small minority may wish the cattle industry would go away, they do not represent the vast majority of people who simply have a different attitude about red meat, diets and how animals are treated. There is no conspiracy guys, it's just the way the world has changed and we have to adapt to it and change accordingly. This is the message i take from Troy's article and i wholely concur. By the way, i take issue with Mr. Donnell's comment below. I am a student of one the MBA programs he refers to and i can assure you there is no "European Model" being promoted in these schools. Consolidation is a natural product of competition as firms seek competitive advantage and the natural end point, if left unchecked, is monopoly. We need to remember what the Teddy Roosevelt trust busting crusade a hundred years ago was all about and why we have anti-monopoly laws. We should give the Federal Govt a bit of credit when they intervene in mergers that will reduce competition, if anything i criticize the govt for being too lax on this front. Again, thanks Troy for a good article.

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What's My View From The Country?

As a fulltime rancher, opinion contribur Troy Marshall brings a unique perspective on how consumer and political trends affect livestock production.

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Troy Marshall

Troy Marshall is a multi-generational rancher who grew up in Wheatland, WY, and obtained an Equine Science/Animal Science degree from Colorado State University where he competed on both the livestock...

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