'New Reality' defined at Marketing Congress 'B4
SAN ANTONIO, Tx - There is a
“new reality” facing the livestock
and red meat industry, nearly 20
speakers, panelists . and
moderators agreed at the recent
Livestock Marketing Congress ‘B4,
held here.
Economists, a former U.S.
Secretary of Agriculture,
academicians, specialists in
consumer demand, and
spokesman representing all sec
tors of the industry brought this
annual leadership-level conference
a clear message: no matter where
you are in the chain that brings
meat from the pasture to the plate,
you must begin doing things dif
ferently in order to prosper.
Today’s livestock and meat
industry is being rocked by
economic, political and structural
influences, and must face up to
changing consumer demand and
needs to take a long look at its own
traditions and attitudes, speakers
at the first day of the two-day
conference emphasized.
They set the stage for the final
session, when seven top industry
spokesmen gathered for a three
hour panel session at the Hyatt
Regency Hotel.
With many of the industry’s
elected and executive officials
listening, Jack Maddux, an award
winning cattleman from Wauneta,
Neb., said he was optimistic about
the future, “because we are facing
our problems head-on. ’ ’
And, he said, “Some of the at
titudes of the 1920 s and ‘3os might
be coming back, and might be
appropriate today.” These he
identified as “some shunning and
reduction of debt.”
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Maddux, named 1984 Cattle
Businessman of the Year by the
National Cattlemen’s Association,
was critical of “Our .buy now, pay
later attitude.” He traced this
attitude back to the belief in the
1970 s that land prices “always (go)
higher.”
Higher prices for livestock “may
not in the long run solve all our
problems,” he said. What is
needed is “efficiency, innovation
and cost control,” along with
operations that are competitive.
John Saunders, Osborne, Mo., is
a former president of the National
Pork Producers Council. He traced
how pork producers are dealing
with “The New Reality” by looking
at the history of the pork industry
from the mid-1950s through the
present.
Over the last 25 years, “We’ve
taken 50 percent of the fat off
hogs,” and today “Pork is now a
food for the ‘Bos, and in tune with
today’s lifestyles,” he said.
But the 1980 s have also been “a
time of stress’ for pork producers
with overproduction problems, and
more competition for the protein
dollar with poultry, fish and beef.
Through extensive research, the
pork industry has “segmented our
markets,” Saunders said. This
research was undertaken because
today’s pork producer “demands
greater accountability” for his
national check-off dollars.
In the future, more specific types
of cattle will be bred and fed to
meet consumer demand, said Zay
Gilbreath, president and general
manager of Caprock Industries,
Gruver, Texas. The feeding in
dustry spokesman also predicted
more direct marketing of cattle
going into feedlots.
Traditional livestock markets
will not disappear, he said, but
there will be more use of various
forms of electronic marketing.
Gilbreath told the Congress
audience that there will be more
forward contracting of cattle, and
changes in the futures market,
“and don’t (you) be the last one to
find out” about those changes.
He also predicted that although
the problems created for the in
dustry by the sale of mortgaged
livestock are “severe,” Congress
will not change current laws
because of pressure from the
banking industry.
L. Stanley Schoelerman, a
marketing businessman from
Spencer, lowa, said those in the
industry will have “to become
businessmen. We’ve tended to
become sloppy, and let (rising)
inflation cover up our mistakes.”
Schoelerman predicted fewer
livestock dealers in the future,
more video marketing and said
producers will bear “more and
more the cost of marketing” their
livestock.
He also said large numbers of
livestock will continue to be owned
by people who get their primary
income elsewhere.
A debt-free agriculture isn’t an
ideal situation. Schoelerman said.
Noting statistics show that 50
percent of farmers have no debts,
he maintained, “They aren’t the
ones I want to build agriculture on,
(because) they’re elderly, they’re
not progressive, they’re not
leaders.”
He said that “The leaders of
agriculture tomorrow” are in
serious financial difficulty today.
The retail sector is “going to try
and do a better job of pleasing
customers,” said Charles E.
Hendryx, vice president of meat
marketing for the H.E. Butt
Grocery Co., Corpus Christi,
Texas. The firm has 148 super
markets in south and central
Texas.
“The customer is the boss,”
Hendryx said. “We want to
promote the convenience, the
nutritional and economic values of
beef.
“The new reality’ tells us it’s
time to examine the traditional
ways of merchandising and get in
step with today’s customers...it’s a
time when we need leaders, more
than managers.’’
Hendryx also said he was con
cerned about consumers’ concerns
related to the healthfulness of red
meat, and about the attitudes of
children “raised in homes where
eating meat is not the popular
thing to do.”
K. Bailey Nichols, vice president
for planning and corporate
development, Wilson Foods Corp.,
Oklahoma City, said he believes
the “price differential between red
meat and other meats” will be the
most important factor for the
industry.
He said world population growth
will not help demand for red meat,
since the demand will come from
people who can’t afford meat.
Nichols also predicted that
“producers will teamup with
processors” to produce meat for
changing consumer demand.
The packer spokesman said that
rising labor costs will bring about
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more pre-cutting of meat before it
reaches the retail store.
While he said pork has a “better
opportunity” in the future than
beef, he added, “Leadership will
determine who survives and
propsers during a period of
change.”
The food service industry “tries
to adapt to what consumers want.
We don’t do a good job of com
municating that back to
producers,” said Robet Reierson,
director of commodity analysis for
Saga Corporation, Menlo Park,
Cal. Saga provides food to schools,
hospitals and institutions, and
owns a variety of restaurant
chains.
Although the four leading items
Saga sells are beef, Reierson noted
that consumers are looking for
more diversified foods when they
eat away from home. Pork and
poultry products are increasing in
popularity, he said.
Reierson, who for several years
was corporate economist with
Monfort of Colorado, said he
believes that over 50 percent of all
beef ribs and loins are eaten away
from home, and the total may be as
high as two-thirds.
The future for the food service
industry is to go to more customer
service, he said.
Congress ‘B4, conducted June 13-
15, attracted approximately 350
registants to four program
sessions.