Change and Opportunity

Just recently a good friend from my college days at Ohio State University has moved to the Nashville area. He has been the head of the feed division for US Sugar in Florida. After completing the sale of the division to another company, he has taken a position as head of the Animal Nutrition Division for Tennessee Farmers Cooperative. Last weekend, he visited the farm to see our Devon herd. You might think a “feed man” and “total forage man” might mix like oil and water. However, our respect for each other kept the defensive guards down and the resultant conversation was very constructive.

Pat’s career has put him in relationship with a broad section of the livestock industry. It provides a panoramic view of what is transpiring in the rapidly changing environment domestically and abroad. One of our topics of conversation appeared noteworthy for just about anyone who “eats food” and especially to those who “produce it.” If you are in one of these groups, read on.

Pat related to me that for the first time in modern American history, the poultry industry is downsizing. The profitability has dwindled to the point the industry is shrinking as a response. A similar situation is occurring in the swine industry. Rising grain and fuel prices have rocked their world as well. Basic economics bears witness to the principle that when the supply decreases and the demand stays the same or increases, the price will ultimately increase. Under normal conditions, a waiting period should reward those who hold on to expand another day. A growing concern for some is that we are not in a time of normal conditions and cycles. The aforementioned waiting period could be prolonged due to a variety of factors. During this period of time, beef producers have a window of opportunity.

Shrinking poultry and hog output should position the beef industry to increase their market share of total meat consumed in the US. The ruminant’s ability to convert lower cost forages to protein than grain- dependent monogastric’s is their competitive advantage. Logically, the conventional commodity beef market should shift more to a stocker program and cause slaughter cattle to spend less time in the feedlot. The downsized poultry and swine scenario should especially provide a golden opportunity for the grass fed industry to make great strides as a household name in meat. It will hinge on our ability to keep cost down and quality of product and profits up. Increased demand at a profitable selling price always stimulates available supplies in a free market.

I trust that we as an industry can be proactive to make the most of the opportunity before us. A passion for excellence and a unified commitment to do things right will determine whether we go from niche to nationally known. The opportunity is upon us because truly, “the times they are a’changin!”