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.
- Price volatility, both for inputs and end products. Volatile cost of production equals volatile profitability, he says.
- 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.