Let's stir it up some...

[Sandhusker]

Robin, "I like the cow business sandhusker. I'm a lifer. I am optimistic about the beef industry. I welcome VI by smithfield and think it'll change the industry like fencing the west did but I think it's going to prevent our business from going to south america."

I think saying it will change the industry is an understatement! It'll change it all right - but not for the better. It'll knock the economy of the Western 2/3 of my state on it's rear - all that wealth created by our cows leaving the state will be a staggering blow.

I, too, an concerned about South America. However, I don't see how grabbing a hot iron instead of a burning log is any gain. I think we can hold our own against South America. Domestically, I think we need to instill image and loyalty by using the checkoff to promote US beef only and COOL so they can pick it out. Marketing works, and we really haven't tried any marketing yet! We need to load the gun and take a few shots before we decide we can't hit the target.

I think we can also sell beef abroad by working the quality and service angle - something the USDA knows not a damn thing about and is working against us on. We need to keep our standards high and give customers what they want and we'll sell beef.

 

[Ben Roberts]

Does anyone on this thread know who Smithfield Foods is? They want and will make Tyson/IBP look like boy scouts. Tyson, like some of the rest of us saw this coming in 1999, when Smithfield made an offer for IBP, at the time Smithfield already owned around 12% of IBP stock, then with their buyout of Packerland it was inevitable that Swift would be their next target, after Swift sold their cow and bull plants in Omaha,Nebraska and Nampa, Idaho to XL Foods, a packer from Calgary Alberta, Canada.

Thats why Paul Engler's Cactus Feeders went to Argentina in 1999 and built a feedlot, then in Febuary of 2007 Gene Leman joined the Board of Directors for Cactus Feeders, Leman was with IBP as President of their fresh meats division for 20 plus years and later with Tyson, and credited for creating the case-ready program for Wal-Mart, soon after Leman's appointment to the board of Cactus Feeders, Tyson joined into a joint-venture with Castus feeders. Tyson is now in Argentina one step ahead of Smithfield Foods.

Smithfield Foods, in 2005 became the largest cattle feeder in the US (over 800,000 head capacity) with their Five Rivers Ranch Cattle Feeding joint-venture operation with ContiGroup.

Argentina, already has the quality of beef that we have in the USA and Canada and if you are looking for the USDA or M-COOL to keep our market in place with quality and service, you would be badly mistaken. Do you really believe that the consumers will pay more for US or Canadian beef, with $3.00 plus gasoline and the rising cost of living, Wal-Mart is betting they won't, and I will place my bet that Wal-Mart knows.

In the next three to five years, you will not recognize the cattle industry in this country or Canada, as we know it today.

Best Regards
Ben Roberts

 

[Red Robin]

I've said that smithfield would prefer to VI the beef industry here than deal with 3rd world govts. I could be wrong but that's my guess. I think they would be correct in doing so.

 

[Ben Roberts]

I've said that smithfield would prefer to VI the beef industry here than deal with 3rd world govts. I could be wrong but that's my guess. I think they would be correct in doing so.

Red Robin, Smithfield deals with 3rd world governments, everyday!

Best Regards
Ben Roberts

 

[Sandhusker]

Rev. Ben, " Do you really believe that the consumers will pay more for US or Canadian beef, with $3.00 plus gasoline and the rising cost of living, Wal-Mart is betting they won't, and I will place my bet that Wal-Mart knows."

I'm not so sure, Ben. If lowest cost is the only issue, why does Coke outsell Shasta? Why does Budweiser oursell PBR, Schlitz, Oly, etc.... I think you're underestimating the power of marketing.

 

[DiamondSCattleCo]

I'm not so sure, Ben. If lowest cost is the only issue, why does Coke outsell Shasta? Why does Budweiser oursell PBR, Schlitz, Oly, etc.... I think you're underestimating the power of marketing.

I don't think he is Sandhusker. In your examples, there is a genuine taste and/or quality difference. In order for marketing to work, the marketers must have something to latch onto that makes it "more pleasurable" for the consumer to consume that product.

You take your examples and switch them to beef. Argentina has some pretty good genetics floating around. They should, because they bought them from us (us being Can-Am). You take that beef, raise it soully on grass and then compare it against beef raised soully on grass in the US or Canada, you're going to be hard pressed to tell the difference once it hits your plate. Same with grain fed. Argentina is doing a fair bit of that now too, and you'll be hard pressed again to tell any difference between that beef and Can-Am beef.

Now move that beef to a cost-conscience North American consumer. In effect you have two products that are virtually identical in taste and texture, so no place for marketing to grab ahold except to appeal to patriotism. All you have is a price difference, and a pretty large price difference. Even though our local consumers are going to prefer to buy "made in America" or "made in Canada", they aren't going to spend an extra couple bucks a pound for it. Not when their bank accounts are low, the car needs repairs, the kid wants an iPod for Christmas, etc etc etc.

The future is going to get alot worse. Mongolia is going to be next big cattle production country. And Cargill/Tyson/et al are going to happily sell them our genetics, knowing full well they will be able to buy hanging sides for pennies per pound. The consumer won't be able to tell the difference between a grass fed Mongolian hamburger or a grass fed US hamburger. The lower income people in our respective countries have alot of buying power. Imagine what will happen if they can buy Walmart burgers for 49 cents/lb. They aren't going to care where it came from, especially if the eating experience is the same. All they're going to care about is that now they can make rent more easily this month or afford to fix the car. So we'll be left with an oversupply of low end beef, and you know what happens when supply outstrips demand.

We've got to face reality in North America. We need a product that can be differentianted by taste and quality, and its going to need to be desirable enough that people will be willing to spend the money on it. Then your marketing can take effect.

Rod

 

[andybob]

I've said that smithfield would prefer to VI the beef industry here than deal with 3rd world govts. I could be wrong but that's my guess. I think they would be correct in doing so.

Red Robin, Smithfield deals with 3rd world governments, everyday!

Best Regards
Ben Roberts

There is an increasing amount of business by Smithfields in Brazil, initially it was corn purchasing, but cattle invetment is now high on the agenda.
The advantage Smithfields has in the United States is that they already own underutilised acreage, and have all the market infrastructure in place.
An interesting link relevent to this topic; http://thebeefsite.com/news/17253/packer-ownership-ban-would-hinder-marketing-system

 

[RobertMac]

Have you looked at the news lately to see the food supply this low cost, high volume, low margin food industry has given us???????????? Not to mention the fact that they have blessed the beef industry with a BSE problem by recycling their by-products in the name of efficiency!!!!!!!!!!!!!
My biggest selling point is that I am in total control of my product from conception to the consumer except when it goes to the processor. The segment of the consuming public WITH MONEY will pay for a product with INTEGRITY! Why do you think beef has lost market share and has not been able to regain it? Beef is a high end product...the people with money aren't going to buy from a food industry that sells a product that may make them sick...AT ANY PRICE!!!!!!!!!!!! We have committed 90% of our product, BEEF, to corporations that are not trusted by the people that can afford to pay for our product. These same people trust producers. The high-end market is there for us to take. Let Tyson, Cargill, Smithfield... have the low-end, low-cost Wal-Mart market...we will need some place to sell out culls. The problem is processing...our so-called cattlemen's organizations sat on their butts and did nothing while the Federal government let these large packers buy up and shut down the independents in the packing industry and imposed burdensome regulations that facilitated the process. Making a deal with these large processors to process our beef is not an option because 1. they are the problem and 2. they're not going to help us anyway! If cattle producers don't change their attitude, you can expect an increase in N.A. beef supply from cheap beef sources from around the world by the multi-nationals to depress USA live cattle prices and if you can't survive on the new low prices, you will be out of business.

Thank you NCBA for telling producers that our future is with these multi-nationals!

 

[Ben Roberts]

Texan, I want to thank you for starting this thread, it is turning out to be one of the most informational threads, on this board. I only wish ~SH~ would respond, he really does have alot of insight into the cattle industry.

Its been about twelve years ago now, when I made this statement to my wife "The day will come when American beef will not be a marketable product in the United States." I also made that same statement to Charlie Jennings in 2001. For those of you who don't know Charlie Jennings, he is the past President and lobbist for the American Stockyards Association (that no longer exist) in Washington, DC, Charlie was the last administrator we had for the Packers & Stockyards Administration (before the P&S became GIPSA) he later retired from IBP as their Public Relations Director, Charlie agreed with me, and said that the reason he believed that it would happen, is because the production cost for cattle producers in the United States and Canada would be to high to compete in the world market.

We are now there! So what do we do about it. As producers we need to think like a corporation, and cut our production cost, or take the control of our industry back from the multi-national corporation that are controling it now! I've looked at cutting production cost, and don't see where I can cut very much, anymore than I already have, so I believe we now need to take back the control of our industry, and become cattle producers that the world would be proud to do business with.

Best Regards
Ben Roberts

 

[Ben Roberts]

Rev. Ben, " Do you really believe that the consumers will pay more for US or Canadian beef, with $3.00 plus gasoline and the rising cost of living, Wal-Mart is betting they won't, and I will place my bet that Wal-Mart knows."

I'm not so sure, Ben. If lowest cost is the only issue, why does Coke outsell Shasta? Why does Budweiser oursell PBR, Schlitz, Oly, etc.... I think you're underestimating the power of marketing.

Sandhusker, I do understand the power of marketing,example, The WEED WEASEL a few years ago marketing sold thousands of them for $29.95, today you see them in yard sales for $1.00, and they don't sell.

We need more than marketing for our product. We need an organizaition with integrity, creditably and responsibility, that will take on the issues facing the producers and consumers and quit relying on governments to do it for us.

Best Regards
Ben Roberts

 

[Sandhusker]

Rod, there's a lot of truth in what you say. However, I'm thinking the pendulum is starting to swing away from "cheap". Certain things always hold true, and "you can't get something for nothing" is one of them. If you're getting ground on price, you have to be giving ground on quality, safety, something, and I think consumers are beginning to see that. We need to make sure they do.

I think we all agree that we can't win the price game, so part of our efforts need to be aimed at discounting "cheap" imported beef. We need to let consumers know what they're NOT getting at that cheap price. On the other side, we had better be providing that. We need to be doing that NOW to get a jump on the amigos.

 

[Sandhusker]

Rev. Ben, " Do you really believe that the consumers will pay more for US or Canadian beef, with $3.00 plus gasoline and the rising cost of living, Wal-Mart is betting they won't, and I will place my bet that Wal-Mart knows."

I'm not so sure, Ben. If lowest cost is the only issue, why does Coke outsell Shasta? Why does Budweiser oursell PBR, Schlitz, Oly, etc.... I think you're underestimating the power of marketing.

Sandhusker, I do understand the power of marketing,example, The WEED WEASEL a few years ago marketing sold thousands of them for $29.95, today you see them in yard sales for $1.00, and they don't sell.

We need more than marketing for our product. We need an organizaition with integrity, creditably and responsibility, that will take on the issues facing the producers and consumers and quit relying on governments to do it for us.

Best Regards
Ben Roberts

You're right, Ben. However, I still think we need to be in Washington's ears. We need to address all our problems directly, and Washington is a problem. I'm not asking them for any favors, just for them to do what is right.

 

[RobertMac]

You're right, Ben. However, I still think we need to be in Washington's ears. We need to address all our problems directly, and Washington is a problem. I'm not asking them for any favors, just for them to do what is right.

I agree...that's why I may be sending a check to USCA.

 

[Ben Roberts]

Sandhusker, a producer organization working for consumers, making profits for the producer and growing stronger everyday, I can guarantee you we will be in Washington's ears, without going to Washington, sooner than anything else!

Best Regards
Ben Roberts

 

[Ben Roberts]

Sandhusker- "I'm not asking them for any favors, just for them to do what is right."

Thats asking too much, of a favor! You need money for that kind of favor.

Best Regards
Ben Roberts

 

[Econ101]

I don't think hiring Bill Hawks is going to do it for the USCA. He didn't do his job when he was in office, why would anyone think he could influence someone else to do theirs? Funny how he makes a living off his government "connections" now but couldn't oversee JoAnn Waterfield et al.

We need a voice in D.C., but it should come from the home states. Hold politicians accountable and educate the voters in the state they are in, not in D.C. They will soon come and ask you what you want, not the other way around. I really think everything is backwards now.


RM, you hit the nail on the head with your post on the situation in the cattle biz; laid it out as it is.

 

[Texan]

A producer owned beef company:

http://www.uspremiumbeef.com/

4th or 5th largest in the USA.

Have you joined up with these folks Robin?

I checked out USPB a couple of years ago, Mike. I found it to be a really interesting idea. I didn't have a problem with the membership, but I guess the thing that turned me off at the time was the price per share for delivery rights.

It just seemed to me that figuring in the share price, it would be a long-term commitment. That was a commitment that I wasn't really ready to make so soon after the Future Beef flop. I'm still not completely against the idea - I'm still watching them to see what happens. I might check into leasing some shares when the calf and yearling market gets bad in a year or two. (If I'm still here, Ben. :wink

 

[DiamondSCattleCo]

Rod, there's a lot of truth in what you say. However, I'm thinking the pendulum is starting to swing away from "cheap". Certain things always hold true, and "you can't get something for nothing" is one of them. If you're getting ground on price, you have to be giving ground on quality, safety, something, and I think consumers are beginning to see that. We need to make sure they do.

Unfortunately Sandhusker, in the case of South American beef, where they 'give' is on input costs not quality or safety. Some may even say the SA beef is safer due to it being grass fed with no ruminant by-products.

Ditto the Asian markets at least insofar as input costs. Workers wages are measured in cents or dollars per week. Its impossible to compete with markets like that when our workers wages are measured in dollars/hour.

I've always been a huge supporter of free trade, but only between countries whose workers' wages/living conditions were at least somewhat close to being at par. Unfortunately our respective governments don't see it that way.

Rod

 

[Sandhusker]

Sandhusker- "I'm not asking them for any favors, just for them to do what is right."

Thats asking too much, of a favor! You need money for that kind of favor.

Best Regards
Ben Roberts

Unfortunately, you are right. Maybe I have too much faith that my fellow man will have a conscience.

 

[RobertMac]

If cattle producers don't change their attitude, you can expect an increase in N.A. beef supply from cheap beef sources from around the world by the multi-nationals to depress USA live cattle prices and if you can't survive on the new low prices, you will be out of business.

This was in Kit Pharo's email update...gives you an idea of the competition we will face. And the packers will try to buy as cheap as they can from them, just like they do with us!

Locally, we have had over a year of increased and stable cattle prices, which I have not experienced before. We get paid by carcass weight, which is now about 82 US cents per pound. Live weight prices for weaned calves are about 45 US cents per pound, which is really high.


E K -- Paraguay