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Rabobank Report Calls for Structural Changes to Keep Beef Industry Competitive


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HANGING CONSUMER PREFERENCES AND A PRODUCTION MODEL tailored to the production of top-shelf steaks has


put the U.S. cattle industry in a position losing market share to competitive proteins, according to a new re- port from the Rabobank Food & Agribusiness Research (FAR) and Advisory group. The report, “Ground Beef Nation,” notes the industry needs to change the way beef is produced to remain competitive in the protein market. “Under the existing business model, the U.S. cattle


industry manages all fed beef as if it were destined for the center of the plate at a white tablecloth restau- rant,” notes Rabobank cattle economist Don Close. “The industry is, essentially, producing an extraordi- narily high-grade product for consumers who desire to purchase a commodity. More than 60 percent of U.S. beef consumption is ground product. If the U.S. cattle industry continues to produce ground beef in a struc- ture better suited to high-end cuts, the result will be continued erosion of market share.” The report goes on to explore the trend of changing


consumer preferences and the role pricing plays in the notable decline in beef consumption. The indus- tries that produce competitive proteins such as pork and chicken have grown and become more effi cient, making the products more readily available at com- petitive prices. ”The industry must change to a production model


that determines the best end use of an animal as early as possible in order to compete in a ground beef nation,” notes Close. “A new system for end-use categorization that infl uences calf selection, cattle management, pro- duction costs and feeding regimen throughout the life of the animal is vital to keeping beef competitive with other choices at the meat counter.” The full report is available exclusively to clients of


Rabobank, Rabobank, N.A. and Rabo AgriFinance. Media can obtain the full report by contacting Sarah Kolell, Sarah.Kolell@RaboAg.com, at Rabo AgriFi- nance or Jessup Wiley, Jessup.Wiley@rabobank.com, at Rabobank, N.A.


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