Use less, produce more

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Agriculture faces a monumental challenge in meeting the food needs of global populations over the next 40 years, and a diverse panel of stakeholders discussed strategies and challenges during this week’s joint convention of the Colorado Cattlemen’s Association and Colorado Livestock Association.

The panel featured Mark Gustafson, who manages international marketing for beef packer JBS, Tom Goding, president of Bank of Colorado, and Jason Clay, senior vice president for market transformation for the World Wildlife Fund (WWF).

Gustafson began the discussion, presenting the meat-packer’s perspective, and particularly the opportunities and challenges for f U.S. meat companies in international markets. JBS is the world’s largest meat packer, with global capacity to slaughter 94,000 cattle, 48,500 hogs and 7.2 million chickens per day. In the United States, the company's beef division operates eight beef plants and Five Rivers Cattle Feeding. The beef plants and feedyards employ about 18,000 people and the packer holds a 21 percent market share among beef processors.

Gustafson presented a “SWOT” analysis of the U.S. beef industry’s strengths, weaknesses, opportunities and threats in international marketing.

  • Among the U.S. beef industry’s strengths, Gustafson listed Cost-effective production, grain feeding, consistent product, consistent supply, USDA grading and economies of scale.
  • Under weaknesses, he lists the lack of traceability, lingering BSE issues, political image overseas, and the industry’s slowness in responding to changes in consumer demand.
  • For opportunities, he lists growth in consumer trust, growth in demand for chilled beef, retail growth overseas and U.S. input costs increasing less than those for some international competitors.
  • Among threats, he lists the shrinking U.S. beef herd, higher input prices, food-safety concerns, competition from other proteins and effective marketing programs from export competitors such as Canada and Australia.

Gustafson also outlined how some importing countries continue to impose trade barriers, often based on food-safety issues not supported by scientific evidence. These include rejecting technologies such as implants and beta agonists that improve production efficiency. He says, however, that the greatest challenge to the U.S. beef industry is the decline in our cattle numbers during a time when global demand is growing.

Goding focused on roadblocks to feeding the world from the economic perspective of a bank officer. He listed two key issues that challenge U.S. livestock producers in providing protein to global markets.

  1. Price volatility, both for inputs and end products. Volatile cost of production equals volatile profitability, he says.
  2. Increased capital requirements. Due to the high value of feeder cattle, for example, a feeder today needs almost 50 percent more capital investment for the same equity position on a pen of steers.

Goding also discussed a variety of “unknowns,” or unpredictable issues that could hamper our ability to export meats. These include unforeseen consumer issues such as the “pink-slime” fiasco, government regulations, the European Union’s economic crisis, federal monetary policy, interest rates and the federal debt.

Representing the World Wildlife Fund, an international environmental group, Clay questioned how agriculture will manage to feed upwards of nine billion people without destroying the earth in the process. Already, Clay says, human consumption is 1.5 times the earth’s carrying capacity. “We are eating the planet,” he says.

By 2050, the earth’s population will grow by two to three billion people, and global incomes will increase by nearly threefold. Food consumption as a result will double.  About 70 percent of the earth’s people – equal to the number alive today – will live in cities and will be consumers, not producers of food.

Meanwhile, Clay claims agriculture is the number-one source of habitat loss, erosion, pollution and greenhouse gas emissions around the globe. About one third of the earth’s land surface currently is in food production, and the percentage is growing rapidly. “We need to freeze the footprint of food,” he says.

To do so, Clay believes we need to intensify production, but do so sustainably. He acknowledges that livestock producers in the United States have, through the use of production technologies, increased their output of meat and milk while reducing the amount of land, water and feed inputs and greenhouse gas emissions. Globally, he says, the most efficient farmers are about 100 times more productive than the least efficient. We need, he adds, to shift the entire curve.

There is no single solution to this food challenge, Clay says. He provides a long list of areas for improvement. Food waste, for example, now accounts for about one-third of all calories produced. Improvements in crop and animal genetics have brought agriculture to where it is today, and further progress is critical to improve production efficiency. Genetic improvements, along with crop selection and better management practices could reduce water, fertilizer and pest-control requirements of crops, he says. Rather than focusing on maximizing one output such as yield, agriculture needs to optimize all of its outcomes.

To push agriculture toward more sustainable practices, the WWF has a clear strategy. Clay says the group recognizes they cannot reach seven billion consumers, nor can they work with 1.5 billion farmers worldwide. They can, however, reach and collaborate with the 300 to 500 companies that control about 70 percent of the world’s food. Toward that end, the organization has formed partnerships with global food companies including McDonalds’s, Wal-Mart and Coca-Cola, gaining agreements these companies will source products from companies employing sustainable practices. Unilever, for example, is a global giant in food, home and personal-care products that has committed to work toward 100 percent sustainable sources for over 3,000 ingredients they use in their products.


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buddy adams    
ga  |  June, 14, 2012 at 09:05 AM

good agricultural land must be protected from development and abuse in order to feed the world in the future. young generation must be given reason and education to continue to farm

Sam Pakan    
Texas Panhandle  |  June, 14, 2012 at 10:50 AM

As other land owners in Texas will tell you, the greatest threat to ag lands, especially grazing lands, is wind energy and power line development. Wind energy has proven to be totally unworkable requiring conventional power plants to run 24/7 behind wind farms saving NO fossil fuels, yet the government continues to provide political contributors with eminent domain so that can confiscate and destroy more and more grazing land.

Cindy    
Colorado  |  June, 14, 2012 at 09:38 AM

Well managed cattle grazing is one of the best ways to restore land health, sequester carbon, improve biodiversity, enhance water cycles and etc. Removing animals from the land is one of the worst mistakes we can make. We need to educate consumers on the importance of protecting agricultural lands and water resources from uban development. Farmers and ranchers, when paid a fair price, can do far more to improve land health and reduce effects of climate change. Also we do not need corn to raise beef! They do just fine on grass.

Gary    
Missouri  |  June, 14, 2012 at 10:36 AM

But they don't taste as good, and world demand proves that.

David    
South Dakota  |  June, 14, 2012 at 11:16 PM

I have to agree with Cindy. Locally produced foods are more sustainably and Grass Finished Beef will stand up to any taste and tenderness test. Healthy land, Healthy food.


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