Cost control, consumer perception impacts viability in the beef industry
Chadron, Neb. – If producers can control their production costs, they may have a profitable future in the beef business, according to the recently retired University of Wyoming Department of Animal Science Head. Doug Hixon spoke of the future of the beef industry during an IRM meeting in Chadron in late June.
According to Hixon, Jerry Steiner, an executive vice president of Monsanto, spoke of an alarming increase in world population that would occur by 2050.
“The world population is expected to be 9.2 billion people, which means we will need to double the current food production to meet that demand,” Hixon said.
With limited access to more land and water that is currently used to produce food, Hixon said this increase needs to be met by developing better technology.
Hixon expressed concern about the public perception of technology.
“The public has a perception that technology is bad,” he said.
Hixon shared a story about someone he met recently who believed GMOs in products like corn were bad for her health.
“My question is, is perception reality?” he continued. “I believe it is, because if someone believes something, they don’t think they are wrong. But, if something isn’t true, it is up to us as an industry to educate the public about what the truth is.”
The beef industry has changed toward a more consumer-driven market in the last 30 years. Each segment of the industry, whether it is seedstock, backgrounding, feedlot or packer, makes decisions that will impact the consumer, Hixon explained.
“I think it is important to note that we are focusing more on things we can do to add value to the beef product,” he noted.
Hixon discussed the importance of the Beef Quality Assurance training that has taken place during the last several years and how the adoption of those practices has enhanced the final beef product.
Colorado State University conducted a study looking at carcasses where half the carcasses had injection sites behind the shoulder and the other half didn’t. The study found that if there was an injection site behind the shoulder, the integrity of the muscle was compromised, affecting the tenderness of the cut of meat. The study also found that the meat where an injection had been given was three to four times tougher. There was also a 50 percent increase in toughness up to three inches away from the site.
“It makes you wonder how much affect this has had on the consumer, as far as eating pleasure and tenderness,” Hixon stated.
While he was teaching animal science classes, Hixon said he liked to ask his students to describe their ideal beef animal in 11 words or less. Despite the variety of answers he has received over the years, Hixon said his own answer to this question has yet to be disputed.
“It is the animal that makes the most money and enhances consumer demand,” he said. “All cattle aren’t the same. They have to fit into the environment and make money.”
“Although there isn’t much we can control in our industry, one thing we can control is our costs. It is really important to know what they are,” he explained.
Hixon said beef producers can be a lot more successful in the beef industry if they are a business person first.
“Producers need to know their costs of production, how to control these costs, how to manage risks and develop a marketing plan,” he said.
Producers have also made strides in the development of genetics.
“I think producers need to develop a planned breeding program and stick with it,” he said. “They need to match their genetics to the environment and use the genetic selection tools available to them.”
Hixon also encouraged producers to look at their heifers as an additional profit center.
“If producers have the feed available, I encourage them to breed as many as possible so they can sell a value-added bred heifer,” he said.