vestock
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SAN ANTONIO, Texas To get
where you want to go, you have to
know where you are. To consultant
and analyst William C. Hale, the
livestock and meat industry is
probably located in the late stages
of growth or an “early maturity”
phase.
What that means, Hale said at
the recent Livestock Marketing
Congress ‘B4, is that the industry
must begin a renewal process to
avoid entering into the final phase
of an industry’s normal life cycle
decline.
Hale, who specializes in market
research and management con
sulting for agribusiness and the
food industry, outlines how in
dustries in general evolve. He then
shred stalks with a
Ford rotary cutter.
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Speakers address Livestock Marketing Congress
ndustry must beg
took a closer look at the livestock
industry’s development during
Session Two of this year’s
Congress, conducted by the
Livestock Merchandising In
stitute, Kansas City, Mo.
Hale was followed to the podium
by Donald M. Senechal, senior vice
president of the nation’s largest
agribusiness consulting firm,
Agribusiness Associates Inc.,
Wellesley Hills, Mass.
Senechal focused on the struc
ture of the livestock industry. He
warned his leadership-level
audience that the “more
productive” broiler industry is the
major threat to beef and pork for
consumer dollars
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livestock industry will continue to
face competition from poultry,
“technology is in your favor in the
battle with chicken,” he said.
Hale and Senechal were part of a
roster of nearly 20 speakers,
panelists and moderators par
ticipating in Congress ‘B4, whose
theme was “The New Reality.”
Speakers throughout the four
program sessions painted a picture
of an industry that not only is
changing, but must continue to
change to keep and expand its
market share.
Hale, the principal associate
with Technomic Consultants Inc.,
Boston, described the four phases
of an industry’s life cycle. They are
development, growth, maturity
“fragmented”
Imgtl
icrougl
wersed
n renewal
and decline.
He stressed that his analysis of
the livestock industry could benefit
from further study. But saying the
industry was somewhere between
late growth and early maturity
was not negative, he noted, since
“it is possible to renew an industry
in a mature phase.”
To do that, several areas must be
considered. These include
analyzing the needs of the “new
consumer;” studying the
development of new products, and
making sure the industry is being
operated efficiently.
Participants in the industry
must also ask, “Has your
management focus shifted from
operations to marketing?” Hale
said. He defined marketing as
understanding and segmenting
demand, and “approaching it in
new ways.”
The next steps for industry
renewal, he said, include
“recognizing your situation,”
instead of denying it; developing
“an appropriate industry
response;” formulating individual
competitive strategies, and taking
control “of your destiny, and
moving ahead.”
Two crucial factors affecting the
livestock industry’s structure and
performance, Senechal said, are
consumer preferences and the cost
of its products relative to those of
its competitors.
Concerning price, the cost of
broilers has dropped 20 to 25
percent over the past 30 years
because of increased production.
For cattle and pork, “there’s no
clear, discernible price trend,” he
noted.
That means the broiler industry,
in general, “is more productive in
what they do” than cattle or pork
producers.
As a result, Senechal said, the
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broiler industry “looks like a real
industry,” compared to the
“fragmented” livestock business.
Senechal also stressed that price
is the major reason for increased
broiler sales, and not because
consumers necessarily prefer
chicken over beef or pork.
He pointed to several factors as
evidence of a structural change
occurring within the livestock
industry. These include a
decreasing number of packers,
geographical shifts in production
and feeding patterns, and a loss of
market share.
The bright spot on the horizon for
the industry is technology, he
noted, particularly in the area of
growth enhancers will “greatly
increase” feed efficiency. These
will be on the market in the next
few years, he said.
The use of hormones must be
accompanied with educating
consumers about their safety, he
said, adding there are also
possibilities for greater breeding
advances through
“biotechnology.”
“The alert businesses who
recognize change and new
technology will capitalize on it,”
Senechal said.
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