today.” He also predicts more cow-calf operations will be run on leased land than in the past. “We’re seeing a lot more people retire, sell their cows and lease their land to let someone else expand their operation and keep the land in cattle.”
Marketing channels Seven percent of beef producers own 52 percent of
the calves in the U.S. “That means 93 percent of the producers own the other 48 percent of the calves,” Mies points out. Ranchers will continue to need the livestock auction market system to assemble their cattle into workable groups and move them into the market. How- ever, livestock markets are closing and the ownership of those staying in business is consolidating. Mies says the success of branded beef products will
continue to support cooperative marketing arrange- ments between ranchers, feedlots and packers. There are up to 55 brands of beef being sold in retail stores today, he says. “Those brands all say something about the product, genetics, and how the beef was raised. The brand has to source the cattle matching those descrip- tors. They have to create a supply chain back through the packer. That draw-through in the system will keep
these kinds of marketing programs going.” Beef marketers certainly face a challenge in predict-
ing how beef will be consumed in 2025. Mies says 60 percent of the beef produced today is consumed in the form of ground beef. Although he expects this percent- age to increase, he asks, “Will the hamburger generation drive us in a different direction? We don’t know yet.”
Overbuilt Given the size of the national cow herd, the feedyard
segment is overbuilt by about 25 percent, Mies says. “We have pens that will hold calves from about 130 million cows instead of the 89 million we own today”. “The packing industry is about 8 to 10 percent over-
built,” Mies says, “and they will probably always be overbuilt to some degree to handle natural fl uctuations in the supply.” A comment from Smith’s review serves as an appro-
priate summary to the presentation from the 2 scientists. “In less than a quarter century, those in the beef industry have made remarkable progress in improving the effi - ciency with which they produce beef, and the industry is poised to become more effi cient when the market signals indicate that it is time to change again.”
tscra.org
September 2014 The Cattleman 91
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