Hannah Johlman joined the Certified Angus Beef ® (CAB®) Industry Information team in May 2016 as a summer intern, writing features, news releases, columns and blogs on all who aim for the brand, from rancher to consumer. She began the summer term with a story tour of ranches and feedlots in Kansas and Colorado.
A lot can change in half a century. A lot can stay the same. U.S. feeder cattle illustrate that well, said Mark McCully, vice president of supply for the Certified Angus Beef ® (CAB®) brand, at the Indiana Beef Cattlemen’s Association annual meeting last month.
You have to eat it. That’s really the only way to know if a steak is going to be good or not. So it is with all “experience goods.” Wine and beauty products are other examples.
Not long ago, the news was sharply higher beef prices in a still-recovering economy. Industry insiders wondered how consumers would respond. Amid the talk of fewer retail features and penny-conscious shoppers, people still turned to beef. “Sometimes we all get more worried about those price points than maybe the consumer does,” said Randy Blach, CattleFax senior market analyst.
When the original Angus beef brand stands above 138 USDA-certified others and charts a ninth successive record year, people wonder how that can be. The recipe includes a dash of nostalgia, a large helping of credibility and a whole lot of relevance. Throw in its niche at the very top of quality and that certain “it factor,” and you have an all-but-guaranteed formula for longevity.
If you don’t believe the global factors affecting the U.S. cattle market are numerous and complicated, you probably haven’t heard Dan Basse, president of Ag Resource Company, give an economic outlook. By 2040, Japan’s population will drop by 25.3 million people. Today, the Black Sea region exports 34% of the world’s wheat. Brazil’s currency, the real, has been weak for several years versus the U.S. dollar.
In a cyclical business, when you’re riding the good times, it probably means you’re not far from the bad ones. So it is with the cattle business, said Dan Basse, president of Ag Resource Company, as he kicked off the Feeding Quality Forum in La Vista, Neb., and Garden City, Kan., this week. “It’s not like the mid-1980s, with land values collapsing. It’s more like a slow bleed,” Basse said of the general “downturn” in agricultural commodities. Ag equipment sales have slowed, land prices are going down and grain trade has softened as the dollar strengthened.
Moving your cattle along to meet the goals of everyone in the beef supply chain takes focus on the data-backed decisions to add and capture value. Without people like Kenny Montgomery, Ruth Ammon and Meg Groves, those dollars from down the chain might never make it back to the ranch. These are some of the people who keep the plan on course when your cattle enter the feedyard and packing plant. Montgomery is a cowboy in the classic sense. He’s tough, unassuming and resilient – maybe that’s why Pratt Feeders, Pratt, Kan., has made him a part of its team for so long.
The economics just didn’t add up. Median household net wealth decreased 27% between 2000 and 2010, according to the U.S. Consumer Price Index. Canadians were in the same financially leaky boat. “Research would show that during an economic downturn, people tend not to buy premium products, to a point where they will go to a private brand or a lower price competitor to save money,” University of Guelph (Ontario) business and economics professor Tanya Mark says. “For any premium brand, we would certainly expect sales to decrease.”
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