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Retailers offer views to TCFAThe 2009 annual convention of the Texas Cattle Feeders Association was held recently at Amarillo. About 500 persons in attendance heard from various speakers on several issues. Perhaps tops on the list was a discussion on the retail sector of beef sales. Managers from two top retailers joined Jim Henger, executive director of channel marketing for the National Cattlemen's Beef Association, for the panel. Cathy East, group director of perishables for Safeway, and Dave Weaber, economic analyst for Food Lion, were the participants. Both have extensive experience in dealing with the beef industry. Overall, beef consumption remains steady but the retail industry has seen an increase in its share of beef consumption, to more than $430 billion in sales. Fewer pounds of beef are being eaten away from home, as more people are eating at home to save money in this time of recession. "Beef, by far, is the biggest contributor to retail meat department sales," Henger said. "Retailers realize this, and that's why they promote that department and beef so heavily in their advertising, to help bring people into their stores." "One thing I think we're all doing is looking at lowest prices possible as a strategy," East said. "In my own experience, with three kids, I want convenience, so the time value means a lot. I'm sure it means a lot to others." How these two retailers try to lure shoppers to the beef case are similar, with Safeway's Ranchers Reserve line of beef perhaps the more prominent. The line, developed with Cargill, East said, is an assurance program so that consumers may purchase consistent product. "We also have to make sure we have the right products for the consumer in the right stores," East said. "An example (is) Fort Collins, Colo., where we have a lot of university traffic, with a high number of millenials (persons born from 1980 to 1984). We have to have a number of different products at different price points, giving them value-priced items in smaller packages. "No matter what we sell, it has to be a quality product." The quality issue One quality issue is tenderness, and Weaber told the attendees his chain still sees complaints about tenderness. "We have between one-third and one-half of our stores selling Select beef only," Weaber said. "We have a certain demographic in some stores. You put Choice and Select items in front of them and they'll pick Select every time because of price point. That doesn't mean that because you are buying less marbling, you can't have a tender product. We have to keep that balance in mind. "It's easier to mess up tenderness than it is to create it. All points in the chain need to be aware of it, whether it's cattle handling, slaughter techniques, store handling and how consumers handle it at home. Tenderness is still a big priority." East and Weaber both said beef products labeled "organic" or "natural" remain no more than niche products, due to factors such as cost and uncertainty about how those terms are defined. "Organic doesn't work for us as a price point," Weaber said. " Especially now, as people are more thrifty these days and I think will be for some time to come." Added East: "Food Network recipes look great on TV but simplicity works better. Simple just works for most people. Only 10 percent of people have real culinary skills. The other 90 percent want fast and easy." They also urged beef producers to develop more ready-to-eat and easy-to-cook products to meet the needs of today's consumers. "Men aren't good cooks but they're good assemblers," Weaber said. "Give them something that can be easy for the single guy to show he can ask a girl over to his place and prove he can cook. That assembly thing, with a fully prepared meal in one package, works real well for them." MCOOL costs The pair also agreed mandatory country-of-origin labeling (mCOOL) has increased their costs while providing no apparent benefit for consumers. East said COOL "adds a tremendous amount of cost in the form of labor, in the form of record keeping, in the form of the time it takes to spend with an auditor in your store." She noted that time spent complying with COOL is time taken "away from your customers." Weaber said grocery customers have not shown particular enthusiasm for the "paperwork nightmare" that he defined mCOOL. "I don't think our consumers are willing to pay for it (mCOOL), and I don't think they do pay for it today. I think it trickles back down through the system clear to the cow-calf level through margins." "If there was a reason for it (mCOOL), we would have done so long ago." Emissions reporting Also, the newly named CEO of NCBA made his first appearance before a TCFA convention. Forrest Roberts took over as the lead executive of NCBA last January. In his address to TCFA, Roberts said the livestock industry earned a win in Congress recently on the issue of emissions reporting. NCBA, TCFA and their allies on Capitol Hill helped persuade Congress to include two important amendments when it passed the fiscal year 2010 U.S. Department of Interior/Environmental Protection Agency Appropriations Bill, Roberts said. One amendment deletes EPA funding for the implementation of any rule requiring mandatory reporting of greenhouse gas (GHG) emissions from manure management systems. The other amendment prevents EPA from implementing regulation of GHG emissions under Title V of the Clean Air Act. The passage of this amendment ended any hope of the implementation by EPA of a so-called "cow tax" on confined animal feeding operations. The amendments will remain in effect for one year. Meanwhile, Roberts said, NCBA wants to make sure that the Obama administration is dealing with legitimate information as it contemplates future environmental regulation. He offered as an example the fact that EPA estimates show GHG emissions from all livestock operations in the country account for less than 1 percent of all GHG emissions and that beef production's share of the emissions total is even smaller--around .12 percent. That means EPA's data presents "a far different picture" than "what you see when you read the report from the UN--'Livestock's Long Shadow'--which reported that the estimate should be closer to 18 percent," Roberts said. The contrast in those numbers, said Roberts, "starts to set the stage" for the efforts by organizations like NCBA and TCFA to work with the administration. Roberts also told convention attendees that the EPA's own emissions data shows that the Obama administration's plans to require reporting of GHG emissions from manure management systems "will not provide any data that's useful in addressing what EPA's trying to do in terms of their long-term goal of addressing greenhouse gas emissions. "Rather, what it will do is put a significant financial and administrative burden on you as cattle producers and feedyard operators in this country." New leadership New TCFA officers and directors were elected at the convention. Mike Engler of Amarillo is the new chairman of the board; Bo Kizziar of Spearman is chairman-elect; and Jim Peters of Quemado is vice chairman. Elected to one-year terms on the board of directors are Scott Anderson of Guymon, David Baumann of Dawn, Mike Engler of Amarillo, Bill Roser of Watonga, Warren White of Hereford and Richard Winter of Amarillo. Directors chosen for two-year terms are Raymond Brown of Hereford, Sammy Brown of Friona, Dave Delaney of Kingsville, Robby Kirkland of Vega, Bo Kizziar of Spearman and Dale Smith of Amarillo. Elected to a three-year term as directors are Kevin Buse of Hereford, Chris Hitch of Guymon, Jim Peters of Quemado, Pat Schwab of Bovina, Mike Thoren of Greeley and Monty Wheeler of Pampa. Also serving on the TCFA board are the association's two immediate past chairmen: Monte Cluck of Boerne and Walter E. Lasley of Stratford. Larry Dreiling can be reached by phone at 785-628-1117, or by e-mail at ldreiling@aol.com.
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