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Members of the Kansas Livestock Association (KLA) Cattle Feeders Council recently were asked what changes the cattle feeding industry has seen and what to expect beyond the year 2000. Below is a summary of their responses. During the past few decades, the marketing of cattle moved from terminals to direct buying by fewer packers at the feedyard. A start-up beef packing company called Iowa Beef Processors helped make boxed beef the industry standard. The cattle feeding industry has consolidated, but not as rapidly as competing meat providers. Vertical integration has accelerated. The market has expanded beyond our borders to become more global. Consumer needs and wants have changed. Competition has become greater. Beef experienced negative media. Environment and food safety became critical issues. Technology has taken a more prominent role. There is more captive supply. Production has been volume driven as opposed to quality driven. Looking into the next century, council members viewed the future in much the same way. They saw it as a continuation of the past on issues such as the environment, consolidation and vertical integration. In fact, they believe consolidation and concentration will not only continue, but accelerate. Technology will play a more critical role and include Internet marketing. They see less genetic variation and more product uniformity. There will be fewer producers and more vertical cooperation between segments. There will be expansion of the feeding and packing industries outside the U.S. in areas like South America. It is hard to argue with these points even if you wish it weren't so. Consolidation and concentration are certainly not unique to agriculture. Practically every industry is becoming more concentrated and vertically aligned. The automobile, telecommunication, health care and banking industries are just a few examples of those going through the same changes as the cattle feeding industry. Society seems to be cramming more stuff into each day. In fact, I think you could argue the technology revolution has not given us more free time. It has simply led to a less patient society. Consumers want it right now. They are demanding ready-to-eat food, including pre-chopped salad and microwaveable meals. Consumers don't want to learn how to cook beef like their parents. This is not necessarily because consumers aren't as smart (anyone who can surf the Internet can surely operate a crock pot), they simply don't want to spend the time to prepare meals. The beef industry is adapting as more precooked, convenient beef meals are hitting the market. Agriculture's past success in producing a significant supply of food at a relatively low price also has created new challenges. Society is no longer concerned about whether there will be food to eat, but instead focuses on how it was produced. Was the animal treated humanely? Are any endangered species affected by production? Is the operation's odor acceptable? These and many other questions are being raised. New regulations must remain as reasonable as possible. If not, agriculture will simply move to other parts of the world. This article was reprinted from the Kansas Stockman, a publication of the Kansas Livestock Association. |
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