I was speaking to one of the driving forces behind a major branded product this week and he mentioned that sales to restaurants were down dramatically with the recession. Still, he said it appeared that 2009 would end up being a growth rear, with exports and retail sales making up for the losses on the HRI side.
It seems while people might be foregoing the $50 steak dinner at a restaurant, they still want to put a darn good steak on the grill when they stay home with family or entertain friends.
We've been looking for a new "used" truck and they’re actually pretty tough to find, and they go fast. Amazingly, auction results indicate that the prices on used pickups have been rising. It seems that people may not be willing to spend $50,000 on a new truck, but they are willing to spend $30,000 on a late model, low mileage one.
I'm simply amazed at the number of examples of how people have altered how they spend their hard-earned dollars. Most importantly, it’s striking how we have altered our perspective. A well-managed livestock association I'm a member of was recently discussing how to invest its reserves. You wouldn't think that feedyard operators, dairy farmers or pig growers would fall into a group you would classify as risk-averse, but they all sat back in their chairs when the question about shifting some money from CDs to equities was mentioned.
This change in mindset seems particularly acute in the livestock industry. In addition to the general economy, we have had BSE, ethanol subsidies, genetic defects, and a whole host of things on the regulatory, marketing and environmental fronts that have been extremely difficult for producers to plan for or anticipate. Not only has the perception of potential reward been reduced, but the potential risk associated with our industry has been magnified.
Every recession or difficult time is magnified by a collapse of confidence in the future. It’s more than a little disconcerting when I speak to so many of my contemporaries who were so excited about the future of our business just a few years ago but now seem resigned to the idea that there simply isn't going to be much profit in their chosen career. Still, many are determined to keep plugging away at it, not because they feel it’s the right thing to do for their families but because they simply aren't sure what else they would do.
The demand for protein is only going to grow, and we are among the most efficient producers of it in the world. I'm hesitant to say that this industry simply needs more faith and hope, but what we probably need is a clearer vision of the future and a strategy to implement it.
Talk to a dairy producer and learn his time horizon has gotten narrower and narrower. Today, most of them are only concerned about the next three months; it’s simply about survival for them.
Survival and prosperity are a lot like security and freedom/opportunity; focusing on the first probably means less of the second.