My View From The Country

Beef Demand, The Economy & The Checkoff

While the overall economy and some sectors languish, certain commodity businesses are doing relatively well – beef is one of them.

This week’s jobless claim figure was 388,000, a slight increase over last week’s figure of 386,000. While these figures may not be directly related to an industry like ours, which is doing quite well relatively speaking, they are an indicator of the overall economy and its impact on beef demand. Economists believe that the number needs to be below 350,000 to see the unemployment rate drop.

Increasingly, however, economists are discounting the unemployment rate as a solid measure of the current labor situation. That’s because the Department of Labor continues to remove from the figure those people what have quit trying to find a job and have essentially removed themselves from the marketplace.

There are, however, some bright spots in the economy. Besides agriculture, energy and other surging commodity markets, many company earnings have been improving as well. For example, Apple’s net income rose to $11.6 billion on quarterly sales that exceeded $35 billion, which drove the overall stock market higher.

Meanwhile, the European debt crisis virtually ensures tepid growth in that region. And, with America unable to serve its traditional role as the world’s economic engine, the globe’s growth is increasingly tied to China and the Asia Rim; which is why companies like Apple have been performing so well.

Even with a sluggish economy, the recent furor over lean finely textured beef and this week’s BSE case, to name a few events, beef demand continues to exceed low expectations domestically, while exceeding its lofty expectations for exports. Those results continue to have a big day-to-day impact on cattle prices and likely help explain why producer support for the checkoff is at an all-time high.

Certainly there are still fringe groups out there aligning themselves with the activist consumer groups working for the demise of conventional agriculture. They’re out to destroy the checkoff because of its demand-building potential, but it’s a tough sell to the vast majority of producers.

In fact, rather than criticizing the checkoff, the conversation among producers is increasingly turning to the notion that an increase in the assessment may be needed to bring the purchasing power of the program back into line with what is needed to grow the industry. It will, however, take a champion to create a mechanism where checkoff funding will be adequate for the future, and that champion hasn’t yet emerged. Perhaps it will just take a little more time to heal the rift that formed as a result of recent infighting over the checkoff.

Discuss this Blog Entry 1

Amy Patrick (not verified)
on Oct 18, 2013

The check-off has too many "managers" and not enough creativity and vision. We need to talk about nutrition/calorie balance and the benfits that have been scientifically proven, and not paid for by the beef industry. It must be independent research that shows the quality and safety of beef and the fats in the beef that are not harmful but useful. We are not going to convince the fringes and activists. But the ones who squeak the loudest is heard.

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What's My View From The Country?

As a fulltime rancher, opinion contributor 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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