A42-Lancaster Farming, Saturday, July 9, 1994
VERNON ACHENBACH, JR.
Lancaster Farming Staff
NEW HOLLAND (Lancaster
Co.) A first-ever forum for
cattle feeders to talk directly to
packers about the industry, was
held Wednesday at Yoder’s Fami
ly Restaurant in New Holland.
Sponsored by the Pa. Cattle
Industry Development Commit
tee, a group organized through Pa.
Beef Council contacts and funded
with non-checkoff dollars pro
vided by Pennsylvania beef indus
try businesses, the program was
the first of its kind.
In the past, seminars have been
sponsored by the extension ser
vice, lending institutions, or
businesses with a vested interest in
providing certain information.
This meeting was different. This
was a meeting formed by the com
mittee with the purpose of analyz
ing and developing a future for the
beef cattle industry in
Pennsylvania.
The name of the forum, “Feed
lot Management Forum The
Pennsylvania Fecdlot industry:
Now and for the Future,” may have
been somewhat misleading.
The estimated 150 people who
attended the forum were mostly
producers and the rules of the for
um were simple: ask questions.
The panel of speakers included
Dr. Bill Henning, a Penn State
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Beef Industry Holds First Ever Forum
Extension meats specialist; Tom
Taylor, vice president of Taylor
Packing Co.; Mike Silverberg,
vice president of Moyer Packing
Co.; professor H. Louis Moore, a
PSU Extension livestock econom
ist; and Logan McClelland, a
Nebraska cattle feeder.
The program attempted to deal
with the realities of the industry as
far as from the packing companies’
perspective and from the produc
ers; and to analyze the future of
production.
Dave Ivan, executive director of
the Beef Council and staff liason fo
the Pa. Cattle Industry Develop
ment Committee, said the forum
was a crucial step to enhancing the
commonwealth’s cattle industry.
“This meeting brought together
the top cattle feeders within the
state to leam and discuss strategies
necessary to move the industry
foward. As a next step, the results
of the survey will be mailed to the
attendees, and workshops will be
planned which address factors
affecting profitability.”
Apparently there is a great dis
parity between the rhetoric of pro
ducing beef for market and what
concerns are real when it comes to
making a product to market.
According to the packers, the
situation is that 70 percent of the
beef cattle that get slaughtered and
cut for sale comes from out of
state, mainly because producers in
Pennsylvania don’t have the quan
tity matched to demand.
The biggest thing Pennsylvania
producers could do for themselves
and the packers is to raise cattle for
marketing all year around, rather
than continue the seasonal surp
luses and deficits of cattle
availability.
Silverberg told the group that
Pennsylvania producers hurt them
selves because they overproduce
cattle in the spring and underpro
duce for other times.
Especially with beef prices fall
ing, and the limited profit margins,
ignoring the supply-demand
swings and continuing to operate
status quo won’t bring the best
prices.
Dr. John Comerford, who per
formed a survey of those attending
at the start of the meeting, told the
group that those who intended to
continue operating as usual will
find themselves out of work.
Also, producers should slop
bringing overweight animals.
What the packers need is young,
well-muscled animals, Silverberg
said.
He said that the packer operates
on a very low margin, because of
fixed prices, such as labor and
facilities, and the flucuating prices
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of cattle.
The overhead for purchasing
cattle represents at least 90 percent
of the overhead in a packing opera
tion, while more than 7 percent of
the cost is fixed. That leaves about
3 percent maximum for profit mar
gin and that ranges with the price
of cattle and demand.
Too many cattle at the wrong
time means discounting prices on
otherwise quality meat.
Also, the packers said they
didn’t differeniate as to the breed
ing of animals, except for the spe
cialty markets.
There have been some signific
ant changes in marketing in the
past five years, according to
Silverberg. He said that five years
ago, Moyer Packing had no export
business. Today, 20 percent of the
product from Moyer Packing goes
to export. He said that Japan is the
biggest buyer and expects a high
quality, black-blood lined beef
that’s about 1,400 pounds
liveweight.
The rest of the product from
Moyer goes to chain stores through
the East.
That is why the different
weights of animals are needed.
The local market doesn’t want ani
mals that big. If they are, they
immediately get discounted.
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Further, keeping animals too
long on feed, how they are hand
led, marked, etc., can result in
reduced prices.
While the beef industry has long
suffered from a lack of consistency
in product, it doesn’t look like it
will disappear soon. There is no
industry-agreed test that can deter
mine meat quality, such as tender
ness, and the meat is sold more on
looks and market demand for cer
tain cuts.
With boxed beef cuts and
trimmed cuts going to chain mark
ets, there is less ability to identify
from what type of cattle the meat
came.
The bottom line is that packers
get paid for the meat they deliver,
as it looks and handles. Meal is
muscle.
What the packers get paid for is
the carcass and the co-products
(another name for byproducts),
such as the hide.
That’s where the value lies,
Henning told the group, in the val
ue of the byproducts.
The future of the beef cattle
industry is promising according to
the speakers. Not only does Pen
nsylvania have two major packing
companies, where other states
(Turn to Page A 43)
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