The idea was to better focus the industry’s message and resources. The goal was to strengthen the U.S. beef industry by improving the competitiveness of beef producers and products, and thus better serve beef consumers.
Last month, five years later, that new organization was back in San Antonio. But, while the venue was the same, much else had changed.
The evidence was everywhere. It was evident in the upbeat mood of the 7,000 attendees. You could sense it in the discussion in meeting rooms and hallways. And, it hit you like an ice bath when you ambled through the trade show.
- Five years ago, the industry was still stuck in its 20-year tar ball of declining consumer demand for beef. The decline was halted in 1997, and the beef industry has now recorded seven consecutive quarters of demand growth.
- Five years ago, the main goal of the industry’s long-range plan was to stanch the flow of beef dollars flooding to other proteins, mostly poultry. With that downward trend stabilized in 1997 and the upturn of the last two years, the primary goal of the 2001 long-range plan is to grow beef demand by 6% by 2004.
- On the 2001 trade show floor, "beef quality" was the rallying cry of virtually every exhibitor hawking wares and services. Demos of new and convenient beef products were everywhere, as were displays of branded beef product lines and Internet-based data and marketing firms.
It’s an amazing transformation – one that basically came about because U.S. beef producers recognized that the consumer is boss. Along with that, they’ve recognized that the anonymity of a commodity industry – be it in beef, motor oil or toilet paper – doesn’t serve that focus on end-product quality.
Spurred by price signals, producers are looking to add value to their cattle and are seeking to be paid for it. Just a few years ago, 15% of fed cattle were trading away from cash and through forward contracts, formulas and grids based on quality measures. It’s almost 50% today, and some predict the figure will be more than 80% by the end of this decade.
Meanwhile, beef quality assurance programs have been implemented in 43 states. And, injection site lesions are now below 3%, down from an initial 23%.
In addition, the industry is doing a better job of realizing the value of the total beef carcass. The middle and end meats are still the bread and butter, but chuck prices are up more than 20% as a result of new processes and products that utilize this under-valued part of the carcass.
Credit for all this can’t be laid at the feet of the merger. The root goes back to the mid 1980s when forward-thinking beef producers voted for a national checkoff, which provided support for the research and promotion that resuscitated the industry.
The merger, however, did play a significant role. It focused the industry effort and helped put the U.S. beef industry in a position to compete in this stronger national economy.
But, the merger also provided its own savings benefits – to the tune of $14 million over the past five years, says NCBA’s CEO Chuck Schroeder. That comes from savings of $2.8 million/year by cutting meeting costs ($500,000/year), compensation savings ($1.5 million/year) and reduced administration costs ($800,000/year). Consolidating the two offices saves another $700,000/year.
By the way, another difference was very noticeable at the 2001 convention. No one in the hallway was grumbling about the merger. "I’m surprised," a producer friend from North Dakota told me. "Even the folks who were really against the merger are thinking that maybe it wasn’t such a bad idea."
Correction: The February edition of "The Consulting Nutritionist," incorrectly stated that cows should not be fed more than "3% of the total ration as grain." That figure should have been 3-4 lbs.