Assuring beef quality and safety is the most important challenge facing beef producers over the next three years. That’s according to the 2004 Beef Challenges Research conducted by Vance Research Services for Drovers. The second-most important challenge facing producers is “consumer demand and perception.”
Drovers conducted the research during fall 2004 to measure beef producers’ perception of the challenges their beef business will face during the next three years, and to determine how those perceptions differ among producer segments.
A survey was mailed to 1,500 qualified Drovers subscribers. Four specific segments were identified and 375 surveys were sent to each segment. The specific segments include: cow-calf producers with 100 to 499 cows, cow-calf producers with more than 500 cows, stocker operators marketing more than 100 head, and feedyards marketing more than 1,000 head per year. Response rate for the survey was 46 percent.
To determine the significance of specific challenges to beef producers, those surveyed were asked: “How significant do you believe the following challenges will be to your beef operation in the next two to three years?” Respondents were asked to rank the challenges on a scale from 6 to 1 where 6 indicates extremely important and 1 indicates not at all important. Thirteen specific challenges were listed for respondents to rank. (See graph below.)
“Assuring beef quality and safety” scored a 6 by 372 respondents, and scored a 5 by 192 respondents for a “Top 2 box” score of 564 respondents, or nearly 85 percent of respondents. (“Top 2 box” scores include rankings of 5 and 6 on the scale.)
“Consumer demand and perception” earned a “Top 2 box” score by 81 percent of respondents. “Improved efficiency and profitability” earned a “Top 2 box” score by 78 percent of respondents.
While the top three challenges in the Drovers survey may not seem surprising, the challenges scoring near the bottom of the survey may raise some eyebrows. Such issues as industry consolidation, expansion and alliances have received a lot of ink from the trade press over the past several years, and you might expect them to be near the top of our challenges list, but producers working to position themselves for future success placed those issues near the bottom.
“Industry consolidation” earned a “Top 2 box” score from just 35 percent of respondents. Only 110 respondents ranked “industry consolidation” a 6, while 121 respondents gave it a 5, for a total “Top 2 box” score of 231.
“Expanding to succeed” scored only slightly higher than “industry consolidation,” earning a “Top 2 box” score from just 36 percent of respondents. And “working with alliances and supply chains” was a “Top 2 box” response from just 37 percent.
Other “Top 2 box” scores for challenges over the next two to three years are as follows: “Improved animal productivity” 68 percent, “Financial management” 67 percent, “Staying current with technology” 61 percent, “Market accessibility” 57 percent, “Governmental policy” 55 percent, “Environmental issues” 51 percent, and “competition with other protein sources” 38 percent.
Few differences were found in the rating of challenges between the beef industry’s three segments – cow-calf, stocker and feedyard. However, “assuring beef quality and safety” and “consumer demand and perception” scored slightly higher as challenges for feedyards than for cow-calf or stocker operators.
“Assuring beef quality and safety” earned a “Top 2 box” score of 89 percent from feedyards, and 84 percent and 83 percent from cow-calf operators and stocker operators, respectively.
“Consumer demand and perception” earned a “Top 2 box” score of 95 percent from feedyards, significantly higher than the 84 percent and 83 percent from cow-calf and stocker operators, respectively.
But while beef quality seems more important to feedyards, productivity and profitability seems more of a challenge to cow-calf and stocker operations. “Improved efficiency and profitability” earned a “Top 2 box” score of 82 percent and 81 percent as challenges for cow-calf and stocker operators respectively, but just 71 percent from feedyards. “Improved animal productivity” earned a “Top 2 box” score of 69 percent from both cow-calf and stocker respondents, but just 62 percent from feedyard respondents.
Among respondents to the Drovers Challenges Survey, 30 percent were between the ages of 45 and 54, and 31 percent have college degrees. Nineteen percent of respondents say they derive 100 percent of their income from their beef cattle operations, while 24 percent say they derive 81 percent to 99 percent of their income from their cattle operation. Another 20 percent derive 61 percent to 80 percent from their beef operation.