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“Through a combination of research,
technology development and innovation, the U.S. industry has
increased beef production per head of cattle by over 80 percent
in the last 50 years.”
That’s how Thomas Elam, president of Strategic Directions in
Carmel, Indiana and Rodney Preston, professor emeritus in the
Department of Animal and Food Sciences at Texas Tech University
summed up industry production gained through technology in their
2004 landmark analysis, Fifty Years of Pharmaceutical Technology
and its Impact on the Beef We Provide to Consumers.
But, increased production is only
part of the story. The two researchers went on to explain,
“Another major implication of the increase in beef industry
productivity has been a dramatic reduction in the industry’s
overall environmental impact. Had these productivity
improvements not occurred, we would need a much larger cattle
herd to produce a smaller total beef supply. Those extra cattle
would occupy significant amounts of land now needed for other
agricultural crops and land now in non-agricultural uses. In
addition, the impact of lower cattle productivity would also be
felt in the form of increased demand for alternative meats. The
primary benefits of increased productivity have accrued to the
cattle industry and to U.S. beef consumers. In 2004, we have a
more plentiful, less expensive and higher quality beef supply
than we did in 1955.”
Rather than a single watershed
technology, Elam and Preston pointed out it’s producers’ ongoing
willingness to exploit a combination of additive technologies
that has made the gargantuan leap forward possible.
“Pharmaceutical technology,
genetics, nutrition, pasture management, stocker management and
feedlot production have all played important roles. Increases in
grain (corn) yields and a reduction in the real prices of grains
have been pivotal in the growth of the feedlot industry, which
has enhanced the efficiency of beef production and improved the
consistency and quality of the end product,” explained Elam and
Preston. “The overall impact of these technologies has been to
keep beef cost-competitive in the consumer’s market basket while
simultaneously improving its quality. Pharmaceuticals have
greatly facilitated and enhanced the increased importance of
grain feeding in the U.S. beef production system.”
Yet some of the most powerful
technologies available to beef producers remain underutilized,
while some widely adopted ones are receiving increased public
scrutiny.
It Works, But…
In the under-utilized arena, consider artificial insemination.
It has been around the cattle industry since the 1930’s. Yet,
according to the last Beef Survey by the National Animal Health
Monitoring Service (NAHMS) in 1997, only about 10% of producers
utilize it, most of them in the seedstock industry. There are
plenty of reasons why there has been so little
adoption—convenience, chiefly—but it’s staggering to consider
how much genetic progress has been shelved in the name of static
management practices.
Likewise, crossbreeding is a
proven technology to add pounds, reduce costs and increase
production efficiency but it has never really captured the
hearts of commercial producers. There was plenty of
mongrelization early on when Continental breeds were introduced
to the U.S. in the 1960s and 1970’s, but true complimentary,
systematic crossbreeding—truly precise management of maternal
heterosis—remains much more of a novelty than a practice.
Certainly, convenience has something to do with this, too.
Still, even during its latest iteration this past decade, the
more convenient and goof-proof form of crossbreeding available
by using hybrids and composites has gained only intermittent
momentum. In fact, all indications are the national cowherd is
becoming more straight-bred than otherwise.
Other technologies taken for granted or ignored by lots of
producers revolve around management. For instance, according to
that NAHMS Survey: only 34% of herd’s routinely preg-check cows;
only 23% utilize Body Condition Score to evaluate and manage
nutrition; only about half the herds have a defined calving
season and only about half the herds use individual calf
identification.
Low-Cost High-Return
On the other side of the spectrum are technologies many use
because the results are immediate and easy to see, and the net
economic benefits are consistent.
As an example, growth promotant
hormones (implants) consistently provide net economic return,
increased performance efficiency and overall environmental
benefit. As such, 92% of all feedlots use them, and even about
14% of cow-calf producers use them on calves prior to weaning,
say John Lawrence and Maro A. Ibarburu of Iowa State University
(ISU) in, Economic Analysis of Pharmaceutical Technologies in
Modern Beef Production, a companion analysis to the one
mentioned earlier in this article.
Likewise, according to the
report:
Nearly 73% of the cow-calf operations dewormed cattle and 84
percent of the cows and 81% percent used some form of fly
control (Calf Health and Productivity Audit, 1997)
More than 99% of feedlots use dewormers and 99% also regularly
use some method of fly control (Health Management and
Biosecurity in U.S.Feedlots, 1999).
83% of the feedlots used some
antimicrobials in feed or water with the incidence of
antimicrobial use being higher for animals placed on feed at 700
lbs. or less (Health Management and Biosecurity in U.S.
Feedlots, 1999).
Approximately 98% of feedlot
operations vaccinate against respiratory diseases, and 86% of
operations vaccinate against clostridial diseases as part of the
initial processing of incoming cattle.
“Using 2005 prices and production
levels, the estimated direct cost savings to producers of the
five pharmaceutical technologies evaluated was over $360 per
head for the lifetime of the animal,” said Lawrence and Ibarburu.
Lawrence and Ibarburu go on to
explain, selling prices would have to increase 36% percent to
cover the increase in costs if the use of growth promotant
implants, parasite control, antimicrobial therapy, ionophores
and beta agonists were discontinued. Based on the Food and
Agricultural Policy Institute (FAPRI) Model of the U.S. beef
industry, the elimination of those five technologies alone—by
choice or regulation—would result in a smaller calf crop, less
U.S. beef production, more U.S. beef imports and higher consumer
retail beef prices.
Both studies were funded by a coalition of pharmaceutical firms
called The Growth Enhancement Technology Information Team.
In the FAPRI model, the ISU
researchers explain, “There would be fewer total cattle, fewer
cattle on feed and fewer cattle slaughtered. Beef production
would fall 18 percent or 4.5 billion pounds annually. Net
imports of beef would increase 180 percent or nearly 2.2 billion
pounds per year. Per-capita consumption would decline 8.5
percent while retail prices would increase 13 percent. Pork and
poultry would expand to fill this void in domestic and export
markets. Cattle prices would increase along with retail prices.
Nebraska fed-cattle prices would increase 20 percent,
approximately $17/cwt. Oklahoma City 600-650 pound steer prices
would increase 23 percent or more than $26/cwt and cull-cow
prices would increase as well, up $13/cwt.”
Unfortunately, net producer
opportunity would decline. According to Lawrence and Ibarbaru,
“The smaller beef industry would mean fewer cattle operations
and less employment in rural communities.”
Here’s the rub.
During the past decade, consumers have increasingly questioned
any proven or new technology involved in food production.
There was the fuss over GMO
(Genetically Modified Organism) grains when they were first
approved in the 1990’s. The initial consumer backlash was
stunning.
According to a report from USDA
last year, 52% of corn, 87% of soybeans and 79% of the cotton
produced in the U.S. in 2005 originated from GMO seed varieties.
Yet, GMO seeds were only planted on about 5.8% of the 3.8
billion global crop acres that year. Though Roundup Ready
varieties and Bt Corn are now the norm, an aura of tenuousness
continues to surround such production, with outcries from some
domestic consumers and international moratoriums on allowing
grain produced with the varieties.
BST (Bovine somatotropin) milk
serves as another prime example. Just as more consumer are
willing to pay more for beef that has never been implanted or
received an antibiotic, more are willing to pay for milk raised
without the added hormone, which the milk cow already produces
naturally. Go figure.
Discussions in the cattle
business are just now beginning to brew over new classes of beta
agonists, cloning and other DNA engineering.
If they’re not concerned with the
health aspects, technology opponents argue in the name of
product quality. Certainly, studies indicate that the management
of some implants and beta agonists can degrade USDA quality
grade. But other technologies like deworming and antibiotics
used to manage health ultimately contribute to increased beef
quality.
Have the Cake or Eat It
All the while, feed and food costs are going through the roof.
At the recent annual National
Cattlemen’s Beef Association, Stan Bevers of Texas A&M
University at Vernon said that based on Southwest SPA data, cow
carrying costs in his part of the world were $571.53 per
breeding female in 2006. Jim Mintert from Kansas State
University estimated annual cow costs in his neck of the woods
to be at around $670 per head currently.
Overall, the Economic Research
Service predicts the Consumer Price Index (CPI) for all food
will increase 3-4% this year, as retailers continue to pass on
higher commodity and energy costs to consumers in the form of
higher retail prices. The all-food CPI increased 4% percent
between 2006 and 2007, the highest annual increase since 1990.
“Some consumers are requesting
natural or organically produced beef and research suggests that
a portion of these consumers are willing to pay a premium for
such products,” say Lawrence and Ibarburu. However, they
emphasize, “If the use of pharmaceutical technologies were
discontinued in the U.S., cost of production would rise, forcing
some producers and resources out of the cattle industry. The
feedlot and beef packing sectors would be downsized because
there would be fewer calves produced and more beef would be
imported. The smaller supply of beef would result in higher
prices to all consumers, not just those willing to pay a premium
for natural and organic production practices.”
That’s the emerging paradox
between the need for cattle producers to embrace technology with
more relish than ever before, and consumers who believe food
produced with the least technology is equated to increased food
safety and healthfulness.
Considering the urban sprawl and
alternative land uses taking land away from agriculture in
general, the grain-based subsidies taking agricultural land away
from grazing, and escalating global populations and grain
demand, it’s hard to disbelieve the notion that technology will
be more important to the industry’s future than it has been in
the past.
Short of an explosion in global
demand for U.S. grain-fed beef—and it could happen—the U.S. beef
industry will continue to shrink in size and become more costly.
Ultimately, higher beef prices will lead to higher cattle
prices, though increased prices will subsequently place more
pressure on consumer demand.
The whole card beef producers
maintain is technology and embracing more of it. Hopefully,
playing that card will continue to be an available option. |
