Billings, Mont. — Last week R-CALF USA launched the first-ever “Cattle Industry Long Range Plan” completed by its 13-member board of directors who themselves are working cattle farmers and ranchers from across the United States directly impacted by market conditions pervading the entire U.S. cattle industry.
The plan proposes a reset of the live cattle industry’s role in the United States’ multi-segmented beef supply chain.
“For decades live cattle producers subscribed to the theory that by exclusively focusing on building demand for beef harvested in the U.S., primarily by increasing beef exports, the competitive forces in the marketplace would properly allocate to them their competitive share of increased revenues,” said R-CALF USA CEO Bill Bullard.
But Bullard said recent market events, particularly those that occurred in 2018, proved that theory false.
In 2018, the U.S. Department of Agriculture reported the nation’s four largest packers, “Tyson, JBS, Cargill, and National all reported record earnings citing strong beef demand, export demand, and availability of cattle as factors in making the year profitable.
Indeed, the U.S. Meat Export Federation announced that beef exports “shattered” previous records in 2018, hitting all-time highs in both quantity and value. And, in late 2018 the Beef Checkoff Program’s Cattlemen’s Beef Board and the National Cattlemen’s Beef Association jointly announced that “beef demand is indeed strong,” with the 2018 retail demand index rising 15% above the level in January 2012.
“These indisputably favorable factors should have caused U.S. cattle producers to share in the packers’ increased revenues,” Bullard said adding, “But the opposite occurred: the 2018 price that U.S. cattle producers received for their fed cattle was over $4 per cwt lower than they were in 2017, and they fell even lower in 2019.”
R-CALF USA President Gerald Schreiber said it was this and other real-world shocks to their understanding of the marketplace that prompted the Board to draft a long-range plan that fundamentally shifts emphasis toward building demand specifically for their U.S. born and raised cattle, along with increasing demand for beef derived exclusively from their cattle that are born, raised, and harvested in the United States.
“The future of our U.S. cattle industry will depend on how well we, as actual working cattle producers, can work together to strengthen the cattle industry’s segment of the very profitable beef supply chain,” Schreiber said, adding “our new plan identifies the specific steps we must take to make that happen.”