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The Numbers don't add up

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sw

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Rhetoric says a closed border equals prosperity, but…

These Numbers Don’t Add Up



By Mike John

Vice President, National Cattlemen’s Beef Association



These are prosperous times for many in the cattle industry – especially the ranchers in the cow-calf sector. Prices for all classes of cattle are strong. Weather finally appears to be on our side. Some of the areas of drought that led to herd reductions in the Western region of the country appear to have had some recent relief, so even more producers are going to have green grass and plentiful feed.



All of these factors, combined with terrific consumer demand for beef, make for an industry that is faring well. The Beef Demand Index increased by almost 8 percent in 2004 – the largest year-over-year surge in the history of the index. Per capita beef consumption also rose by about two pounds per person, and per capita spending on beef rose to an all-time high of $240 per year. Consumer confidence in the safety and quality of beef is also at record-high levels.



But some - who say they represent the cattle industry - would have you believe that tight beef supplies are driving up beef prices, and that our favorable market conditions are the result of the Canadian border closure.



They’re not coming clean with the facts. The hard facts will tell you that strong consumer demand is sustaining cattle prices – not tight supplies. In fact, in 2004, the U.S. beef industry had the second largest net supply of beef (production plus imports minus exports) in history at 27.7 billion pounds. The largest year of supply was 2002, at 27.9 billion pounds.



But American producers captured their smallest-ever share of the U.S. beef supply. The United States imported 1.1 billion pounds of Canadian boneless beef in 2004, and Cattle-Fax expects that figure to rise by 15 to 20 percent in 2005. The fact that it will arrive as boxed beef - rather than “on the hoof” – makes little difference to consumers or the price that they pay. But it does mean that cattle feeders, processors and others in the U.S. beef industry miss out on the opportunity to add value to these products.



At the same time, we are bringing in Mexican cattle by the truckload. In 2004, the United States imported as many feeder cattle from Mexico as it did from Mexico and Canada combined in 2002, the last normal year of trade.



Prior to our borders closing, the United States was a net exporter of beef products, representing a $1.4 billion net to cattle producers. Today, we are a net importer. In other words, cattlemen have lost at least $1.4 billion in value, reports the Livestock Marketing Information Center. Meanwhile, with economic signals strong, we are growing our domestic herd. How do we turn these numbers around, and regain our position as beef supplier to the world? Certainly not by disparaging the safety of our product. The tactics employed by activist groups within our industry do nothing but delay the re-entry of the U.S. cattle industry into key export markets, costing our cattle producers an estimated $175 per animal in the process. Regaining full access to markets such as Japan, Korea and even Mexico depends on normalization of trade based on reasonable, science-based regulations - not creating a hysterical, isolationist environment that wrecks consumer confidence, weakens demand and strangles international trade.



I urge cattle producers to fully commit to continuing to grow global beef demand and building a stronger and larger U.S. beef industry. The first step in this journey is to see through the empty rhetoric and misinformation that is being spread about our industry and our product. When we look at the facts, we know that science-based, fair trade policies are the only environment that will allow us to grow and thrive. Archaic, isolationist trade restrictions may have surface appeal, but they can only take us backward. Be wary of those who like to tell you they are looking out for “the little guy” or “the independent producer.” Crunch their numbers, and you will find they simply don’t add up.



Mike John is a cattle producer from Huntsville, Missouri, and vice president of the National Cattlemen’s Beef Association (NCBA).



NCBA is the largest organization representing America’s cattle industry. Initiated in 1898, NCBA is the industry leader in education, influencing public policy to improve producer profitability and in preserving the industry’s heritage and future. Efforts are made possible through membership contributions. To join, contact NCBA at 1-866-BEEF-USA or [email protected]

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Sandhusker

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"The tactics employed by activist groups within our industry do nothing but delay the re-entry of the U.S. cattle industry into key export markets, costing our cattle producers an estimated $175 per animal in the process."

What about the tactics employed by Swift, Tyson et al (and backed by the NCBA) that thwarted a testing plan that would of reopened those key export markets a year ago at little or no cost to the US producers?
 

sw

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sh,
WHAT EXACTLY ARE YOU TALKING ABOUT? Look at the real numbers, we are getting the same amount of beef from Canada that we were before BSE. It is in boxes, not on the hoof. I just wish you R-Laff followers would look at the real picture. And YOUR LEADERSHP IS SAYING THAT CANADIAN BEEF IS UNSAFE WHEN IT IS MIXED WITH OURS WHEN IT GETS HERE. DOES THAT NOT SAY EAT CHICKEN?
 

Chuckie

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i have to agree with you, sw. if canadian beef is so dangerous re: BSE, it's WAY TOO LATE to worry about it. consumers in the US have been munching on it for more years than some people can count.

considering the integration of the canadian/us beef herd, it seems to me that if we're gonna get it (BSE), we already have it. and as far as export markets go, i believe that Japan has made it clear that they consider the US/Canadian herd as essentially the same thing as far as the chances of exporting beef to them is concerned.

has everyone forgotten about the "cattle cycle"? it also feeds (no pun intended) into this whole market scenario.
 
A

Anonymous

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sw said:
sh,
WHAT EXACTLY ARE YOU TALKING ABOUT? Look at the real numbers, we are getting the same amount of beef from Canada that we were before BSE. It is in boxes, not on the hoof. I just wish you R-Laff followers would look at the real picture. And YOUR LEADERSHP IS SAYING THAT CANADIAN BEEF IS UNSAFE WHEN IT IS MIXED WITH OURS WHEN IT GETS HERE. DOES THAT NOT SAY EAT CHICKEN?

sw- How much old cow or bull meat has come down in the last 2 years?

When before did you ever get paid $70 hwt for old cows and $90 for old bulls?
 

Silver

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Oldtimer said:
sw- How much old cow or bull meat has come down in the last 2 years?

When before did you ever get paid $70 hwt for old cows and $90 for old bulls?


So... it is just about money for you. Food safety is really just a battle cry isn't it OT?
 

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