'Predicting," baseball manager and philosopher Yogi Berra once said, "is tricky, especially about the future."
Old Yogi's observation is an obvious truth. But, it points up the challenge that faces all of us each day. What will it take to persevere as a producer in the decade ahead?
Overall, the high-income farm and ranch in 2010 will be leaner and more efficient, generating a minimum of $250,000 in gross annual sales. The managers of those operations will be more market savvy, Internet proficient, consumer-oriented, willing to embrace technological change and to seek outside expertise. Most say they'll be buying inputs electronically.
That's the profile that emerges of the agriculturist determined to thrive through the year 2010, according to an exclusive survey of high-income farmers and ranchers in all agriculture segments.
Commissioned by the Agribusiness Division of Intertec Publishing, the survey polled readers of the division's nine agricultural trade magazines, of which BEEF is one. These magazines represent every segment of U.S. agriculture and every region of the country.
What Beef Producers Say Most beef industry respondents expect to see more beef alliances in the coming decade, but almost 60% say they don't expect to build formal partnerships.
That's an indication, says North Dakota State University Extension economist Harlan Hughes, the beef industry could segment into two groups - quality-oriented producers and commodity producers.
Despite all the talk about vertical integration, 62% of survey respondents say they aren't currently involved in formal partnerships with suppliers or customers; 59% don't plan such partnerships.
"I think the future is bright for the group willing to build partnerships with alliances," Hughes says. Those who continue as commodity producers "don't want to change and don't realize the world's changing around them - they'll need to be low cost to survive."
Even if the industry segments, most producers are optimistic about beef a decade down the road.
Regardless of gross sales or age, over 40% of producers across all income levels have a good to excellent outlook for the future; 36% were neutral; 20% are leery.
Hughes says alliances and new product development are key factors in producer optimism for better times ahead.
A third of those surveyed believe development of new beef products will have the greatest impact on the future success of the industry in the next decade. (See "Minds, Microwaves And Marketing," page 22.)
What Concerns Them Low prices, environmental regulations and competitive markets top the list of producer concerns. Finding viable markets also concerns producers - 61% worry that the export market won't be able to handle excess beef if the domestic market keeps shrinking.
The U.S. Meat Export Federation's (MEF) Philip Seng believes otherwise. He points out that 96% of the world's population is outside the U.S. "The market is there," he says. In fact, MEF projections through 2005 put exports at 1.8 million metric tons (they hit 1 million for the first time in 1998).
"We've been laying the groundwork in opening markets," Seng says. "Buying power is there, trends are favorable, and consumption is increasing internationally. We need to be fishing where the fish are."
To corner that market will require more aggressiveness.
"We need more commitment to the international marketplace in both marketing and policy," Seng says. "Producers need to be more active in their respective associations and aggressively look at export markets."
Same Number Of Breeds Seventy percent of survey respondents expect the number of breeds to stay the same over the next 10 years; just over 20% expect fewer breeds.
Dave Nichols, Nichols Farms, Bridgewater, IA, concurs but expects to see fewer seedstock providers. By 2010 there will be but 100 seedstock providers, and only four in year 2020, says the Angus, Simmental and Salers breeder.
Of those, he expects more will be offering three- and four-breed composite lines. "Breeds in the composite lines will become secret and unique to the herds selling them," he says.
He bases his prediction on the corporate breeding structure he's seen evolve in the seed and swine industries, where a handful of corporations influence three-fourths of the genetics in the market.
"There's a tremendous merger mania going on," Nichols says. "It's naive to think that what's happening in other industries won't happen to beef."
This doesn't mean there won't be people raising bulls, he adds. He likens it to the seed corn business, where independent growers are under contract to produce products.
He also doesn't see it as a good trend - neither for the social structure of rural America, the seedstock industry nor Nichols Farms. He's uncertain whether this top-down corporate planning will even be good for the consumer. "But," Nichols adds, "to ignore the trend isn't going to make it not happen."
Even so, he's upbeat about the future. "I'm very optimistic about beef." One solution Nichols farms is implementing to make beef more viable and to compete with impending corporate breeding programs is selling franchise herds to independent producers who then sell Nichols genetics.
One reason beef hasn't gone to corporate breeding establishments, Nichols says, is because breed associations have done a good job of tracking EPDs and getting information back to producers. They'll need to continue to do that in the future, especially if technologies like cloning and transgenics become part of the industry, he says.
Embracing Technology The Internet could play an important role in the beef industry, respondents say. Less than one-third of respondents now utilize the Internet, but half expect to do so in the next decade - about an 18% increase.
Jim Gibb of eMerge Interactive, a Web-based company that provides information management, technology and e-commerce to the animal industry, says the Internet will become a common channel for distributing beef information and electronic commerce in the industry.
Gibb expects tremendous growth in technology that can capture information in real-time, analyze the data and return it quickly to producers. Some real-time systems are already available for feedyard managers, but he believes as cow/calf producers become more involved, real-time information will be utilized through the entire beef production chain.
"Agriculture is in an era of precision management. It's going to be extremely critical for producers to have daily information" to improve production efficiency, carcass information and consumer-defined palatability. "It allows producers to manage with binoculars instead of through the rear-view mirror," Gibb says.
Technologies survey respondents expect to be high in usage over the next decade include rotational grazing (75%), artificial insemination (50%), EPDs (50%), beef marketing alliances (50%) and retained ownership (60%).
Technologies they hope to be using that aren't common now include sexed semen (20%), electronic ID (25%), and embryo transfer (20%). Only 3% think cloning will be part of their operation in 2010.
The Beef Business No matter what direction the industry heads in the next 10 years, most respondents (71%) anticipate staying in the business.
Inadequate income and retirement were the two top reasons they would call it quits. The average age of respondents was 54. But beef producers under 35 were unanimous - 100% - that they'd be in the beef business 10 years from now.
A 40-year-old Alabama producer predicts: "Things will change more in the next 10 years than in the past 20 to 25 years. Those unable to change will have a hard time. The best educated and most informed will be on the cutting edge."
Beef's success in the next century depends on three things: branding, convenience and enhanced products.
So says Roger Blackwell, marketing professor at Ohio State University and author of "From Mind to Market: Reinventing the Retail Supply Chain." The book offers Blackwell's prescription for 21st century marketing success - knowing what consumers want and meeting their needs quickly.
"Beef is in trouble unless it gets branded," he says. "Premium prices will go to those who have a branded beef as successful as Tyson. No-brand beef at retail is not going to work."
All retail grocery products face a challenge, he says. Consumers are buying fewer items in grocery stores and beef has declined more than most because it relies on home preparation. More of the food dollar is also going to restaurants and home meal replacements.
"Any product that can't be microwaved will be challenged. Many in today's households can't operate a kitchen range - even boil-in-the-bag products are too much trouble."
There are new beef products, Blackwell admits, but he suggests beef push harder.
"Producers must get over any favoritism for pure beef and develop products enhanced with soy and other ingredients. These meet a protein and nutrition demand for customers in high-income and foodservice segments."
Foodservice holds more potential than retail because restaurants, like consumers, now depend on convenience, Blackwell says. Many already rely on centralized commissaries to prepare some dishes, cut labor costs, increase consistency and heighten quality.
To achieve marketplace success, Blackwell says producers must adopt a market approach rather than a sales approach. Marketers must get inside consumers' minds, look at consumption patterns and how they fit into everyday life. Then, plan back from that point through distribution channels and reorganize the supply chain into a demand chain.