DENVER (B)--Beef production is likely to decline in the next few years, according to cattle industry experts attending the recent National Cattlemen's Beef Association mid-year conference here.
The prediction came on the heels of another record year of production, at nearly 27 billion pounds, and a $2.6 billion increase in consumer spending on beef.
Randy Blach, chief operating officer for Cattle-Fax, said cow-calf producers have lost $1.45 per head since 1980. During the same period, Blach said the average fed cattle price was $67.84 per cwt, only $0.03 above the break-even point for cattle feeders.
"I'm sick and tired of being sick and tired," said Blach, reflecting the mentality of those who'll decide to cut back.
Industry leaders said what's needed is a more consumer-oriented focus and the formation of partnerships involving traditionally competing interests.
Steve Hunt is chief executive officer of U.S. Premium Beef, an alliance of about 1,200 cattle producers in 28 states. Its mission is to "profitably sell meat and meals instead of cattle" through value-based pricing and sharing of carcass information.
"The only way we could realize the full value of our product, for our cattle and for our selling of meat and meals was to own the processing company that sold it," Hunt said.
The results, according to Hunt, have been $1.5 billion in sales and $28 million in earnings since the initiative was established in 1997.
Colorado-based Ranchers Renaissance took cooperation one step further by creating "vertical coordination" among various segments of the industry. Ranchers, stockers, feedlot operators, packers and processors linked together in what chief operating officer John Butler described as a "drastic change in the paradigm." He said formerly rival entities now know how the other is performing.
"We're pulling the wagon in the same direction," Butler said.
The arrangement, he said, offered quicker response to consumer preferences, spurred development of branded products and boosted its ability to compete in the global marketplace.