The U.S. beef industry operates in a global market, and an array of socio-economic forces will drive changes in the production and marketing of beef cattle over the next two decades. Seedstock producer Lee Leachman, of Leachman Cattle of Colorado, recently shared his crystal-ball projections with an international group of beef producers and processors during Novus International’s Global Beef Roundtable.
Following are some of his predictions, as summarized by public relations consultant Kenna Rathai, of Kenna B. Rathai Communications:
- Increasing incomes – There will be 50 percent more people, they’ll have more money and they’re going to want to spend it on higher quality protein. Global food demand will at least double in the next 40 years.
- Energy and the environment – Climate change discussion will continue. Oil will exceed $100 per barrel. Nuclear energy will be a factor and 50 percent of global corn will continue to be used for ethanol.
- Higher commodity prices – If oil trades higher than $100, corn will trade higher than $6 per bushel. If the global economy is good, leading to high oil prices, we’ll have a global shortage of protein. The only way to increase protein is to feed more grain to cattle, chickens and hogs.
- Expensive steaks – By 2020, steaks will cost more than US $16 per pound, compared with the current average of more than $8 per pound. North Americans and Europeans will grill fewer steaks they become less affordable, and the wealthiest people will be the ones eating steak.
- World’s wealthiest people – In 2009, there were 3 million millionaires in the United States, India had 185,000 and China had 600,000. That number has not increased in the United States in a decade, but the numbers in the other countries are increasing by 20 percent every year. By 2020, India and China will have more than 6 million millionaires and they’ll be able to eat whatever they want.
- Global cattle numbers have peaked -- CattleFax estimates that global cattle production is down by 6 percent over the last decade. Grazing land prices have more than tripled in the last decade. High crop prices will also contribute to reduced availability of grazing land.
- Cattle as pets – More and more people think animals have rights like humans and we will not win this battle. The reality is we’ll have to alter our animal handling to satisfy the public. Livestock will be treated more and more like pets by 2020.
- High-tech meat – We will continue to use technology to increase volume of meat per head including beta agonists to increase carcass lean yield. We will develop ways to select for improved rumen efficiencies. DNA testing, selection indexes, sexed semen and more will aid genetic improvement. We’ll produce more meat per head, but we will have fewer animals and tighter supplies. We’ll have to push to get more meat out of animals because we won’t have more cattle, and packers will offer incentives to use all the technology possible to increase meat quantity.
- New value signals -- Market forces will lead to improved value signals because the technology is better and competing products make it mandatory. An increasing number of calves will be source verified and certified due to consumer-driven demands and more stringent markets.
- Feed efficiency becomes a new tool – This is a highly heritable trait and more and more cattlemen will seek more feed-efficient animals. With rising fuel and feed costs, feed efficiency is one of the most economically significant traits.