Beef producers, as individuals, are unique. They don’t all wear big hats and boots! We are an accumulation of family and environmental influences. Though shaped by the past, we have multiple avenues on which to venture forward.
If we stay in the beef industry we become a part of one or more distinguishable segments of our industry: cow/calf, stocker, and feeder. The first segment is a year around activity, the other two may or may not be. Within each segment there is a complexity of activities that abound, requiring almost constant attention. Management, used in its broadest context, is critical; and usually determines the economic viability of the operation. It is the primary difference in beef cattle operations—not the color or breed of the cattle involved.
Staying involved within the cattle industry is not easy, even with the best of management. Challenges abound. There is an enormous amount of knowledge required to properly handle the administration of these operations. Good cowboys are good caretakers of the cattle. If good cowmen/managers are not in place, the operation will be besieged with challenges considerably above the norm. The myriad of knowledge areas required to manage these operations would greatly surprise those unacquainted with its complexities. It helps enormously to have grown up in one of these operations; yet that is still just a beginning. For obvious reasons most cattle operations are multi-generational.
Some producers who raised the cattle, also send them them to the feedyards for finishing (retained ownership). Many others will partner with the feedyard, splitting ownership (profit and losses) while being finished. Most will simply sell their calves to a stocker operation, sale barn, or directly to the feedyard, no longer maintaining any ownership of the calves involved. Every year seems different as to profitability. It’s rarely the case when all three segments of the industry make money the same year. One or the other seems to be in the optimal position in any given year.
At a recent meeting I attended, the speaker presented a slide depicting profitability over the last thirty years involving cattle at the feedyard–feeder cattle. According to the information on the slide (at the meeting) roughly 50% of the time (over this thirty-year period) involved, the finished cattle lost money. About 10% of the time it was near break-even; and about 40% of the time the cattle involved made money. The slide depicted a horizontal black line across the middle, left to right. Above the line, profitability was displayed in green, from $50 to $250 dollars per head profit. Below the line, in red, were the time periods when the cattle involved lost money, from $50 to $500 dollars per head. In recent times, some pens of cattle have lost upwards of $750 dollars per head. People who have fed cattle for many, many years, are pausing to ask themselves how much longer they will continue to feed cattle.
Up to this point we have talked of independent feed yards and individuals (known as feeder cattlemen) acting for themselves. Contrast this to the fact that the three largest packing companies own 70% of the feedyards, thus buying 70% of the calves available to be fed. They certainly impact if not seriously influence this feeder calf market. And, they buy all the cattle leaving the feedyards, regardless of where they are located. They have all the power. There is no room for negotiations when buying the finished cattle. You, the independent feedyard, take whatever they offer for your finished cattle. It seems to me that all of this is covertly designed to push the independent feedyards out of business.
Your elected politicians don’t seem to want to hear about the term monopoly. They hear a lot better when someone is putting money into their pockets. Check out www.rense.com, for some additional information.
While we are here let me list a few additional factors that negatively influence the beef cattle industry:
- Governmental intrusion such as taking land near waterways, the Red River in one instance, that had been privately deeded for generations. They actually drove off the mother cows, leaving behind any fresh born calves that could not keep up with their mothers.
- Governmental oversight in general, by people who have a very limited knowledge base concerning the subject matter
- Regulations and environmental impact statements based in misleading and even erroneous information
- Escalating prices for feed commodities and equipment
- Control exerted by those corporate entities who take our end product of fresh beef, and reap the rewards while producers settle for scraps. Producers have very limited means of marketing beef outside of directly to the packer. Packers have all the control.
- The development of giant, multinational companies is not by accident; it gives them control. Over the ensuing years approaching 2050 when the planet’s population peaks at 9.5 Billion, these giant companies will be in total control.
In 2009 I offered COSTCO an opportunity to market a branded beef product raised (from birth to harvest) under a new philosophical approach: “Genuine Care & Concern for the Individual, an extensive effort to support the calf’s sense of wellbeing throughout its life”. COSTCO was interested. The three big packers, who had actually sold them a billion dollars worth of beef the year before, said NO; “it would cost us money because we already have 17 lines of our own branded beef.” Their own branded product did not involve producers; it was simply a wrapper change suggested by the marketing department, that would stimulate an emotional consumer response, and increase sales.
The idea of building our own retail/producer owned packing house was short lived. Retailers were afraid of packer retaliation during the three to four years required for construction. Though they loved the idea, they knew they would have no business left after receiving “junk beef,” from the packers, for three years.
You get the picture; life is not easy as a beef producer. Some years you make decent money: most years they let you survive. They have to! Producing beef in well over 700,000 locations across America is not a challenge they want. Why should they? They can just wait until the finished cattle leave producer’s hands and steal them. At least that’s my opinion. I’m only a fourth generation cowman, university trained with an advanced degree, who has spent a lifetime involved with the cattle industry. But, it is just my opinion.
The greatest, most glaring deficiency affecting the beef cattle industry today, is that we have lost contact with you, today’s urban consumer. You don’t know us any more. You no longer have friends and family on the farm or ranch. You’ve no one to ask questions of. You don’t know where to go for answers regarding the beef cattle industry. Thus the development of a new book: “The Beef Cattle Industry, what they don’t tell you;” this website: “The Beef Industry;” and a developing monthly newsletter provided by BEEF PARTNERS, a (pending) non-profit organization whose sole purpose is consumer education.
In closing may I say that the people in the production side of the beef cattle industry like what they do. They’d like to keep doing it; but it gets harder each year. So, yes, we must ask ourselves where we are. Are we living in the past? What makes one happy in this industry is fairly easy to discern. Attaining success, in our own way, may well be the key to the kingdom. My success doesn’t have to be your success. If my heart is filled with that which makes me happy, I am successful. Many of us, within the beef cattle industry, would not be deemed successful by others; yet we would not trade our lives with any other. That is the nature of beef cattle producers.
The pivotal point might simply be that of not finding ourselves in the wrong place at the wrong time. I recently read a quote that said: “Where are you? In the past or in the future? It doesn’t matter, because if you are not in today, you are in the wrong place!” This could describe where the beef cattle industry finds itself today.
Aside from our internal challenges, you should be our primary focus. Your current uninformed status makes you vulnerable to misinformation. To become enlightened takes effort. I want to make that challenge easier for you by making available concise, honest, and factual information regarding this great American Heritage Beef Cattle Industry.
Would you believe that our industry began in Boston, Massachusetts in the year of 1655? It did. It’s all available. Please make the effort. The quality of your food future and the well being of some great people are in your hands.