If you plan on beating another team, you should know how it plays the game. You also need to understand the changing rules of the game.
This is how industries can compete more equitably, says Jeff Firman, animal science professor and poultry specialist at the University of Missouri. He's preached this message to beef industry groups and students for years. Poultry isn't Firman's single loyalty. He's a beef producer, too.
Firman acknowledges fundamental differences between the two industries, yet he believes there are competitive advantages for both.
chicken vs. pork. He's selecting good-tasting, economical, easy-to-prepare food products," he says.
Quality isn't the only characteristic that consumers desire. Studies cite factors such as convenience, taste and consistency. Yet, Firman says these don't answer all concerns for beef or poultry.
"It becomes a mystery determining what consumers are searching for," Firman says. "Quality is an issue, but if all items in a category are good, other attributes become significant. Take items that come from broilers, for example - consistency has been a boon, complementing replicated characteristics that determine quality."
Firman admits the structure of the poultry industry has evolved to where it stamps out like products one after another, day in and day out. The lesson the beef industry can take home, he says, is to examine and continually refine production, marketing, processing and grading systems.
"The beef industry must determine some basic standards," he says. "Uniformity for one - none of us knows what the ideal uniform standard should be. And, what makes certain characteristics the right uniformity?
"Second, grading standards should be addressed. Consumers want lower fat content, yet the beef grading system grades better for higher fat. While palatability factors are involved, grading is still opposite of consumer demands."
This may grate against industry preferences, but Firman says the poultry industry has adapted its grading to reflect what consumers prefer. Skinless chicken breast or turkey breast by itself is dry and somewhat low on flavor, he admits. However, more breasts are sold at better prices than any other part of the bird. That's partly because consumers can create any flavor they desire with marinades, sauces and spices.
Start At The Top Hot-selling breast meat didn't come about overnight. The process began 30 years ago when poultry growers looked at the big picture.
"In our integrated business, we start at the top with primary breeders - those who control the genetics. From here, there has to be a goal. It's distressing to me that clear goals can't be established among beef producers. In a recent presentation with feeders, we couldn't determine what type of animal would make the best consumer product.
"A goal has to be defined clearly," Firman adds. "And, there's no problem having multiple goals. As an example, the laying chicken and broiler are the same species, yet wildly different creatures. There are broilers fed for breast meat yield and those fed for whole bird sales. Thus, with the same basic genetics, poultry hits three markets - eggs, breast and whole birds."
Understanding the end goal directs all processes in an integrated system.
Knowing genetics and defining targets quickly increases efficiencies, but Firman says he observes little movement by beef to reach these goals. While he doesn't necessarily advocate a beef production system like that of poultry, he notes several efficiencies an integrated system offers, including production, economics, genetics, reproduction, nutrition, production, processing, marketing and health concerns. Beef alliances are realizing some of these benefits.
What We Can Do The beef industry can enhance its position. For one, process meat further.
Park Waldroup, a poultry nutrition professor with the University of Arkansas, says further processing stabilized broiler prices, which for years were characterized by wild price swings. Just 10% of broilers are sold fresh today, the rest is pre-cut, packaged, cooked or otherwise partially prepared.
More readily at hand are steps that can be taken at the producer and feeding levels. By enhancing production strengths already in place, Waldroup and Firman say potential for beef remains good.
"We need to become a learning-based business," Firman says. "We should encourage implementation of technology as soon as it's economically feasible. Tools such as electronic identification must be useful and economical. At this point, not every new technology provides an economic payback.
"Sell food, not a commodity. We can do this by building business relationships with processors and purveyors. Problems processors encounter with variable carcass sizes can only be solved by producers, although the packer may use discounts or other means to encourage change," he adds.
"And, we need to market the food and back up the marketing. For example, if we advertise chicken nuggets, the consumer can buy them. If we advertise stir fry beef, the consumer can't always find it," Firman says.
Existing advantages can be enhanced. Beef is relatively easy to raise, can utilize marginal land and has a relatively low feed cost. Combined with rotational grazing, reducing fixed costs and a reduction in genetic variations, improvements can be initiated.
To help reduce genetic variability, Firman says to select for maternal and paternal genetics. Plus, seedstock producers should consider superovulating cows and contracting those genetics to cow/calf operators. He also says the industry should develop a strategy to enhance genetic potential similar to the way pork and poultry do.
"Along with being a learning-based business, we should make information-based decisions," Firman says. "This starts with good records, monitoring feed efficiency of breeder candidates, basing all decisions on economic projections and a willingness to pay for new information.
"Realize the producer, feeder and processor are linked. There's global competition for beef and good market potential for U.S. product. We've got to provide it efficiently and at a cost that's reasonable."
Admittedly, price may be a concern, he says. That's compounded by beef's average 60% carcass yield and higher processing costs compared to poultry's average yield of 80%.
But both specialists urge expediency in affecting beef industry change. The poultry industry took 30 years evolving to its current state. If the beef industry follows the same pace, it'll take 100 years to reach a similar level of efficiency.
Granny doesn't scatter corn on the ground to feed chickens anymore, nor are cattle fed out of five-gallon buckets. However, progress of both species has evolved to different points. Cost of gain is not the greatest dollar concern of poultry production, thanks to added value.
A shift to an industry emphasis on further processing has alleviated many cost-of-gain concerns. This, says Park Waldroup, University of Arkansas poultry nutrition professor, allows nutritionists to concentrate on the feeding program.
"Further processing drives the poultry industry now," he says. "That's where we make the money, so we can focus less on what it costs to grow the birds. The profit from processing helps smooth grain price swings and other variables. In some cases, a company may actually lose money growing the birds. But, that's made up with processing profits."
Half of all broilers are sold as further processed items, whether in prepared dishes, foodservice items or home meal replacements. Fresh, cut-up products, which include some frozen items, account for 35% of sales, and fresh, whole birds make up the remaining 15% (see Table 1).
"In a way, this situation can be great for a nutritionist because it lets him concentrate on developing a good feeding program without having to live or die by the bottom line," Waldroup says. "Consequently, nutritionists have established programs that are extremely consistent and efficient, resulting in the consistent birds we see."
The sheer volume of feed production drives the quality aspects of poultry feeding. A feed mill supplying growers in an average broiler complex may produce as much as 50-100 tons of feed per hour, compared to about 500 tons per day for a 40,000-head feedyard.
A complex typically includes a breeding facility, hatchery, growers, processor, rendering plant and a feed mill. A single grower produces an average of 500,000 birds per year.
Advantages/Disadvantages Waldroup says this integrated system lets companies put the feeding focus where it's needed most. First is feed quality.
"When you're dealing with this volume of feed, you can justify a great emphasis on quality," Waldroup says. "There's generally just one person in the company charged with purchasing the grain, soy meal and other ingredients."
This promotes consistency of feedstuffs. Coupled with a sole nutritionist formulating the ration for millions of birds, another factor of sameness is added.
Feed input quality is monitored in much the same manner as at many feedyards. Grain sampling is common, but infrared analysis is becoming the norm, allowing on-the-spot verification of grain quality. Quality control points vary, depending on feed ingredients, supplier reputation and grower location.
"The advantage to the grower is he's neither buying nor selling feed," Waldroup says. "It's solely the nutritionist's decision as to what the feed makeup is and there are differing philosophies. Some companies prefer to push the birds as hard as they can so they'll grow as fast as possible. Other companies want the best gain at the best cost, so they're willing to go with moderate gain. Both approaches work with negligible differences to the bottom line."
Waldroup admits poultry companies have advantages because they feed and grow for specific markets, a luxury not yet available to many feeders. And, it can adapt to the type of products the market needs at a specific time.
For example, four-week-old chickens turn into Cornish hens, six- to seven-week-old broilers head for fast food outlets, and eight-week-old broilers mainly turn into skinless, boneless breast meat. All this at a feed conversion ratio of 1.8 lbs. of feed to 1 lb. of gain.
It hasn't always been rosy for poultry companies and Waldroup's not saying it will always be. He points to similarities between beef and poultry such as h ousing and management improvements as attributes of both industries.