BEEF CATTLE MARKET UPDATES
Editor's Note: The U.S. beef market remains the largest revenue generator in the ag industry. Last year, over $49 billion of cattle and calves were sold, the total U.S. herd was 97.1 million head, and fed cattle prices averaged 87 cents/lb. — the highest average price received ever.
To get a feel for the major issues facing the beef industry, we invited a few of those in the know to provide information about the marketplace and some of the services they are providing agri-marketers.
Overview by Evan Slack, the Evan Slack Network
2005 was another really good year, particularly for the cow/calf producer and the yearling operator and on up the chain to a res-taurateur who saw steak sales sizzle.
This article is being written on my Mac at the National Cattlemen's Beef Association (NCBA) and the Cattlemen's Beef Board conventions in Denver, CO, (there are eight other U.S. cities named Denver) my base of operation for 47 years. What a pleasure it's been to say live on my satellite broadcasts during the morning and at noon that steer and heifer prices have skyrocked, while pocketing a few dollars from the cattle we run in Idaho and Nevada.
Randy Blach, executive vice president of Cattle Fax (a branch of the NCBA), observes that cow-calf producers responded to another year of record-high calf prices and continued to expand beef cow and replacement heifer numbers during 2005. Major beef markets remained closed to U.S. beef during 2005, however, both Japan and South Korea are expected to resume at least limited beef imports from the U.S. this year. Blach says, despite the limited beef exports and one of the largest net beef supplies on record, prices for fed cattle, feeder cattle and calves were record-high during 2005.
Cozad, Nebraska Cattlemen and Beef Board Chairman Al Savajgr says consumer demand for beef dipped slightly last year, but the Beef Demand Index remains up more than 20 percent since reversing its 20-year decline in l998. The long range plan calls for growing the demand another 10 percent by 2010.
The many, many cattlemen that we have visited with over the past four weeks (including 16 days at the National Western Stock Show) are generally upbeat, but they are concerned about opening and reopening trade with Japan, South Korea and other countries.
National Animal Identification, running livestock on public lands, and the dry weather were also topics of discussion.
Overview by Cliff Becker, Food360 division of Vance Publishing Corp.
Marketing to livestock producers is growing increasingly more complex as the market structure changes and it's important to look at the needs of each segment as well as the whole.
Knowing that the decision-making hierarchy is different for every operation, ensuring you have coverage of the "centers of influence" for the product or service you market is essential. Certainly, as these production units get larger, the need to market at greater depth within the organization becomes mandatory. Today, purchasing decisions are not always made at the owner level.
By choosing a mix of vehicles that deliver on these distinct information needs, you can "converge" your message onto these audiences and ensure your reach and frequency. With so much information available, producers are using a number of resources for news, management/production information and product selection. Your job is to know your target and choose the vehicles that best deliver on their distinct needs.
Print digital, data, radio, television and involvement marketing are all at your disposal and you need to select them carefully. By mixing the unique strengths and deliverables of these mediums, your marketing strategies have a much higher opportunity for success.
Overview by Greg Hains, Capital Press
California and the Pacific Northwest, Capital Press' coverage area, is one of the most productive farm regions in the U.S.
One of the most important farm enterprises in the region is beef production. The area has a wide range of grazing conditions from open, high-desert range, lush valleys to irrigated improved pastures. It is also one of the largest hay-producing regions, as well. So, feed supplies are plentiful.
This creates a lucrative market for animal health products, feed supplements, livestock handling
equipment, trucks and other related products. In the western part of the region, rainfall and high humidity
contribute to intensive parasite problems, including liver flukes.
Consequently, producers are heavy users of anti-parasitics.
Production practices are different than in many other parts of the country. Due to a wide variety of climate and grazing conditions, some operations calve in the spring while others calve in the fall.
Overview by Curt Lancaster, Texas/Georgia Network
Agriculture in the southern U.S. has one thing in common and that's cattle. From Texas to Georgia, cattle production is the common thread that ties each county in the state. In Texas all 254 counties and all of Georgia's 159 counties have farms that raise cattle.
Cattle producers are moving targets with operations of various sizes.
According to Agricultural Statistics Service personnel:
Texas has 150,000 operations that raise one or more head of cattle averaging 92 head per producer.
Georgia has 25,000 operations with one or more head of cattle averaging 50 head per producer.
How does this relate to farm broadcasting you ask? Because according to beef industry sources: "radio affords advertisers the most immediate way and the most frequent way to get a message directly to a cattle producer." The feedback we get from personal visits as well as talking to producers at meetings lets us know we are on target with our news and information.
My brother, who has been an agricultural producer for over 40 years, will tell you when asked: "Two of his best friends are the radio and his cell phone. ..." And he just won't talk to anybody.
Marketing to beef producers takes incredible patience and passion because as a rule cattlemen don't adapt to change quickly. Brand loyalty — and promoting brand awareness can be extremely important because beef producers are fiercely loyal — they will come back to you over and over if you stand by them. You need to be present with them year-round, at their meetings, sales, homes and community events.
Overview by Kathy McCleary, Northern Broadcasting Network
Selling to beef producers may be cyclical — they have their up and down economic times. Yet, if you market to them year-round, keeping a strong presence even when they are not in a direct buying season, or times are tough, then when times are good, like they are now, you will see tremendous success. Producers will buy your product because they are loyal, they learn to trust the brand that stood by them during tough times. Right now, with cattle numbers coming back and profitability the strongest its been in years — these are the times that increased sales effort pays off.