In 1964, the American beef industry operated without computers; Continental breeds had not been largely imported into the U.S.; and “convenience” and branded beef products were nonexistent.
In the 40 years since, these are just a handful of the significant changes the beef industry has experienced. Many advocate that these have been advancements; others contend they are not.
Either way, producing beef is a vastly different business than it was 40 years ago, 10 years ago, and even six months ago, in some cases. To mark its 40th anniversary, BEEF magazine visited with notable names in the industry to gain their perspective on where we've been and what's to come.
Exotic breeds and EPDs
The introduction of Continental breeds such as Charolais, Limousin, Simmental and Gelbvieh into the U.S. in the late 1960s and early '70s was a major turning point impacting the evolution of the beef industry.
The arrival of the “exotics,” as they were called, extended the gene pool — allowing more opportunities for crossbreeding programs. Additionally, the promise of Continental breeds to produce earlier maturing, heavier calves prompted industry-wide performance testing to measure and compare growth traits, recalls Earl Peterson, former executive vice president for the American Simmental Association.
Artificial insemination was made available to the beef industry at about that same time, which Peterson says was the precursor that made it possible to test a sire and his progeny. This eventually allowed for the development of expected progeny differences (EPDs), he explains. And, through the years, sire summaries and evaluations followed, as did embryo transfer, collection of carcass data by ultrasound and now genome mapping.
“Each of these technologies has improved the selection process by giving producers more tools to evaluate,” Peterson says.
The resulting impact of performance testing has been widespread. John Crouch, current executive vice president of the American Angus Association (AAA), calls the adoption of the Angus Herd Improvement Record (AHIR) program in 1958 “one of the most significant things that has happened to the Angus breed.
“The evolution of that program over the years, en route to the more sophisticated performance testing programs of today, has helped track beef production economic traits to ultimately improve beef end-products for consumers,” Crouch says.
Angus breeder Ben Eggers, who manages Sydenstricker Genetics in Mexico, MO, believes the adoption of performance evaluation by seedstock and commercial breeders has also brought efficiency to the industry.
“The development of the EPD concept and the National Cattle Evaluation to more accurately describe the genetic contributions of seedstock animals has enabled the industry to actually increase beef production while maintaining a smaller national cow herd,” Eggers says.
Indeed. According to Cattle-Fax, the U.S. had its highest beef production level in history in 2002. That was despite a U.S. beef cow inventory that had shrunk from a high of 45.7 million head in 1975 to 33.1 million head in 2002.
The ability to meet consumer demands has been enhanced by performance testing as well, says Paul Bennett of Knoll Crest Farm, Red House, VA.
“Today, all segments of the beef industry are more closely aligned because they have embraced performance information and are sharing information to be more profitable, productive and consumer driven,” says Bennett, whose father James began collecting performance data for their family seedstock operation in 1963.
However, Kit Pharo of Pharo Cattle Co. in Cheyenne Wells, CO, disagrees that Continental breeds and performance testing have been largely beneficial to the beef industry, particularly for commercial producers. Pharo, who raises Angus, Red Angus, Hereford and composites and sells 500 to 600 bulls annually, says, “The new ideas, tools and technology are good, but the misuse of them has gotten many producers into trouble.”
Specifically, Pharo says the push toward increasing animal performance and production within the beef industry has also increased producers' expenses and cost of production.
“As the old saying goes, you can't get something for nothing,” he says. “We were led to believe that we could increase our profits simply by increasing our production. That couldn't be farther from the truth. Bigger is not always better.”
Instead, he advocates producing moderate-sized cattle that have been bred and selected for their ability to be profitable in a real-world environment. (See “A Counterpoint Perspective” on opposite page.)
Peterson admits there's been a learning curve for the industry in utilizing Continental breeds, but says, “I think the industry has gone through some trial and error. Along the way, we've learned that genetics is important, but environment and health are important, too. And, I believe we are now seeing more uniformity of size and scale among the use of Continentals.”
Better beef products
The ability to track performance and carcass traits has created another phenomenon in the industry — branded beef.
Crouch recalls that in 1976, USDA lowered the grading standards.
“In retrospect, that's been a good thing, because it gave rise to the development of the Certified Angus Beef (CAB) program,” he says. “CAB was the first branded beef program of its kind in the country. Since its inception, it has created consumer awareness for high-quality beef and opened the door for other branded programs.”
Eggers agrees. “The meteoric growth of CAB proved the willingness of the consumer to pay more for a consistent, quality product,” Eggers says, “and fueled the increase in branded beef we see today.”
Along with that, pre-packaged, pre-cooked beef products that offer consumers quality and convenience have been another relatively recent focus for the beef industry.
Lee Eaton, who has raised purebred Charolais since 1965 on a family operation at Lindsay, MT, calls the addition of all of these products a positive.
“This has added value and safety to our beef products and laid the foundation for source verification, which will do the same,” he says.
Another notable factor occurring over the last four decades is the advent of new technology afforded by computers. Craig Bieber, who is the next generation of the Bieber Red Angus operation established by his parents Ron and Lois near Leola, SD, in 1968, says, “Computers have affected every part of our operations in some way specifically making it possible to analyze data and help us make better decisions.
“I don't think we could have ever dreamed 40 years ago the role computer technology would play in providing information regarding genetics, marketing, production, finance and a whole host of other decision-making tools,” he adds. “At times, the application of technology has been rocky, but for the industry as a whole it has given us the tools to be much better at what we do.”
Eaton also counts computers as a major influence in allowing the industry to collect data and add efficiencies — especially at the feedlot. The Eatons' seedstock program includes buying calves back from customers, then feeding and carcass testing them at a Nebraska feedlot. They've been collecting actual progeny carcass data for 29 years, but Eaton says they could not do it on the scale they do today had it not been for computers.
Dealing with challenges
In addition to progress, the beef industry has had its share of negative factors to overcome during the past four decades. Times of drought and down cattle cycles, as well as issues such as animal activists, urban development and food safety, are more recent topics of concern for producers.
The strengthening of antagonistic groups within the agricultural community has interfered with the ability of the beef industry to get what it needs to be profitable, Bieber says.
He also points out that the BSE-positive cow identified in Washington state in 2003 is an event no U.S. beef producer will likely ever forget. Its ramifications in food safety and security “will continue to have a major impact on the beef industry,” Bieber says.
Eggers points out that the competition and cost of using land for agricultural purposes is another obstacle that has surfaced, and will likely continue to plague the beef industry.
Pharo adds, “I anticipate the time will come when confinement grain feeding in large feedlots will face some serious challenges due to social, economic and environmental issues.”
Forecasting the future
Given the many changes since 1964, what lies on the horizon for the next 40 years in the beef industry is anyone's guess. But these producers seem poised for any changes that come, and offer these predictions:
Genetic selection tools will likely continue to evolve. In the seedstock industry, Eggers says one of the main challenges ahead will be to develop measures for the ever-elusive fertility traits.
Peterson and Bennett anticipate genome mapping, and DNA technology will likely change the way we breed cattle in the future.
“Seedstock producers must work to blend EPDs and gene markers to make breeding decisions,” says Bennett, whose operation includes Angus, Gelbvieh, Polled Hereford and Red Angus.
Peterson also sees sex selection having an influence on tomorrow's beef sector and believes the ability to identify gene markers for disease prevention, such as BSE, may be something that occurs in the next decade.
All these leaders agree that beef industry segments will continue to integrate. Bieber says, “To survive one will have to be linked to the whole production chain — no matter what your operation size. And, I believe the seedstock operation will be a catalyst for the integration of the production chain.”
As an example, Bieber says his family operation will continue to work to add more value to their seedstock by helping customers market calves and understanding customer needs, as well as continuing to improve and breed seedstock that produce a consistently flavorful product.
Similarly, Eggers says, “We plan to continue to grow our seedstock operation slowly and steadily. We will try to stay aware of opportunities to work with other breeders, both large and small, to strengthen the cow/calf sector's position in the industry.”
Crouch adds, “The integration of the whole beef industry is something producers need to pay attention to.” He says the AAA has tried to prepare for this change by adopting recordkeeping systems that improve efficiency, as well as offer genetics and management and help producers in the selection and marketing process.
To that end, he adds, “Continual adoption of genetics that improve beef's end product, along with marketing programs like CAB, in turn improve consumer acceptance of beef.”
Bennett adds, “We'll be looking at a different industry in five to 10 years in many respects. National ID will create a change in our thought process to being accountable for all inputs into an animal, including genetics, health and feed. It will create a heightened awareness of how we must do things right.”
While Bennett believes continued beef industry integration is imminent, he doesn't think it will reach the full integration of the pork and poultry industries.
“The producer level will always enjoy some independence, simply because the beef industry has the unique ability to utilize natural resources that can't be used for anything else — and can do so in an environmentally beneficial way,” he says.
Keeping costs low will remain important. Lastly, and perhaps most importantly, these producers believe keeping costs low will be critical to survival — no matter the changes ahead.
The Eaton family operation has grown from just a few head in 1965 to a large purebred operation that today provides a livelihood for three brothers, three sons and several nephews.
“We've seen things we'd never envisioned,” says Eaton of the past 40 years. “But, we're still in business and have something for the next generation to continue building on.”
He credits their success to keeping costs minimal. “You can only get so much money for your product, so you have to keep inputs low and watch margins. That was our philosophy 40 years ago, and it's still a factor in being successful today,” Eaton says.
Pharo advises the same. “Most successful ranches will increase their profits by decreasing their expenses,” he says. “Becoming a low-cost producer will require some out-of-the-box thinking, including breaking away from the production-oriented way of thinking that has been so prevalent for the past 40 years.”
Additionally, Pharo believes niche markets will offer profit-making opportunities for those producers who develop the ability to become promoters and marketers. He also predicts that small family ranches that don't make the necessary changes to survive will be quickly bought out by those that have made the necessary changes.
“That's exactly the way it should be,” Pharo says. “I hope the government doesn't try to step in to subsidize the inefficient and unprofitable ranchers.”
That said, Pharo says he'll continue to breed and select for cattle with the ability to be profitable in a real-world environment, and work with producers to ensure the sustainability of the family ranch.
“Our main concern is getting ranchers to focus on profit instead of production, so they will have an operation they can turn over to the next generation,” Pharo says. “We will continue to do whatever we can to help prevent the family owned and operated ranch from becoming a thing of the past.”
Kindra Gordon is a freelance writer based in Spearfish, SD, and is a former BEEF managing editor.
A counterpoint perspective
Although the introduction of Continental breeds, performance testing and EPDs were intended to benefit the beef industry, seedstock producer Kit Pharo of Cheyenne Wells, CO, calls their collective impact over the years a negative one.
“The introduction of the larger Continental breeds provided the shortcut many ranchers had been looking for to help them immediately increase their average weaning weights by 100-200 lbs.,” he says.
But, the move started a chain of events that increased both the frame size of America's cow herd across all breeds and the cost of production, while reducing overall profitability.
“As a result, the typical rancher now has cows much bigger than 40 years ago, and his land won't support as many cows as it once did,” he says. “The cows now rely on much more purchased feed and inputs to stay in production. So, ironically, a lot of western ranches that were put together and paid for with 350-lb. calves are now struggling and going broke with 600-lb calves.”
Pharo allows that North American ranchers are more productive today. “Unfortunately, they seem to be less profitable than ever before,” he adds.
Pharo also believes many cow-calf producers are being persuaded to make business and genetic decisions based on what the feeding and packing industries are telling them.
“Feeders and packers are concerned about their own profits, not the rancher's profits,” he says.
To be viable in the future, Pharo advocates producers change their thinking that “bigger is better.”
“If today's ranchers are going to survive the upcoming downturn in the cattle cycle, they must stop focusing on increasing production and start focusing on increasing profits,” Pharo says. “The small family ranch will have to become much more efficient and profit-oriented to survive the next 10 years. They can effectively compete with the large corporate ranches, but only if they start treating the ranch as a business.”
Improved technology has and will continue to be one of the major influences shaping the beef industry. Lowell Catlett, a New Mexico State University professor in agricultural economics and business, and a well-known speaker and author on futuristic planning, shares some of the technology milestones he's noted.
Catlett believes widespread application of animal health via feed and medicine has impacted the beef industry the most in the last 40 years — leading to improved herd management and ultimately better beef for consumers.
He says, “Consumers have enjoyed the best selection of consistent, high-quality, wholesome beef more in the last four decades than in the previous 400 years.”
Catlett credits high-quality feed ingredients — scientifically balanced and coupled with improved genetics — with helping America produce the most consistent, high-quality beef product line ever. And, he adds that widespread application of health care for both ranging and confined animals has also resulted in a higher quality product going to market and a major increase in animal welfare.
Secondly, Catlett calls “compaction of the market channel” another industry-changing event. Specifically, he says, “Trading by description via teletypes (1960s-'70s), as well as video auctions (1980-today), and now by any electronic means, has produced billions of dollars of savings in transportation costs and shrink losses.”
Looking ahead, Catlett predicts technology will make it possible for the industry to produce what he calls “e-beef.” He explains that as the beef industry moves toward 100% traceability, the real benefit will be to link consumption and production in real time and have full “telemedicine” for animal welfare in real time, as well.
Baxter looks back
It's no surprise that well-known cowboy poet Baxter Black looks back on the past 40 years with a touch of humor. He says, “Personally, the three greatest modern-day inventions that affected my life were the insecticide ear tag, the baby beef esophageal feeder, and the lime squeezer.”
On a more serious note, this former large-animal veterinarian says the inclusion of “exotic” breeds of cattle such as Salers, Limousin and Charolais in mainstream cattle feeding to create a leaner carcass in the mid-'70s was an industry-changing event. “This stimulated a greater emphasis on carcass grade and less on color of the hide,” Black says.
Looking ahead, he anticipates the beef industry will see an increase in international trade and thus an ongoing concern with Zoonoses, bioterrorism, disease prevention and food safety, BSE, brucellosis, foot-and-mouth disease, scabies and tuberculosis. He says, “These will continue to be issues for a long time. The importance of regulatory veterinarians will increase accordingly.”
He adds this comment about BSE: “Any time humans begin tinkering with the basic blueprints of nature, we should be prepared for the consequences. Feeding meat by-products back to ruminants, for example. Plagues and famines aren't always just coincidental.”
Lastly, regarding his own future as a cowboy poet, Black says, “As long as people eat beef, there'll be cows, and as long as there are cows, there'll be some poor cowman out there getting bucked off, run over, gored, pounded, mashed, bit, stomped or humiliated on a regular basis. So, I guess I'll always have inspiration!”