ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, July 10, 1996 TAG: 9607100043
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: OMAHA, NEB.
SOURCE: Associated Press
Angry and frustrated over the steady drop in U.S. beef sales, representatives of the $36billion cattle industry were told Tuesday they are being out-marketed by chicken and pork producers.
``You can couch it however you want, but it's the truth,'' said Randy Blach, marketing analysis director of the Denver-based Cattle Fax, a market information company. ``Our value is flat-out not stacking up to the competition.''
He participated in a panel discussion at the Beef States Summit, which attracted about 200 beef producers and industry officials looking for solutions for an industry in trouble.
Cattle prices are low. Producers blame market manipulation by meatpackers, who in turn blame oversupply from ranches and feedlots. Corn, the major feed for cattle, is at record-high prices, nearly twice the $2.75 per bushel of a year ago.
While there was hostility at different segments of the beef industry - one panelist accused meatpackers of ``owning producers'' - a bigger concern focused on beef's 15 percent decline of the U.S. market share in a decade.
That drop in market share is the equivalent of losing the entire populations of California, Idaho and Washington as customers. If that trend continues, beef will be no more than 25 percent of total U.S. meat production in 10 years - down from 52 percent a decade ago.
``We've had cycles before, but never have they severely affected cattlemen with the high grain prices and the big supply,'' said Larry Sitzman, Nebraska agriculture director. ``There is a lot of finger-pointing, a lot of false finger-pointing. Why has this one been so severe?''
Virginia beef producers are suffering as well as those in the Midwest. Bill McKinnon, a beef specialist at Virginia Tech, said he couldn't predict a turnaround for farmers before 1999.
Virginia farmers had total beef cattle sales of $294.4 million in 1994, the latest year for which figures are available, down 25 percent from $394.6 million in 1990. Farmers earned $70.30 per 100 pounds of beef sold in 1990, a figure that dropped by 15 percent to $59.70 per 100 pounds in 1994.
Augusta County is Virginia's largest producer of beef cattle with 35,000 head. Bedford County is second with 28,500. The state as a whole had 721,000 head on farms at the end of 1994.
McKinnon noted that beef production was up in Virginia this year even though consumers haven't increased their buying of beef in three years.
The ugly fact for beef producers is that Americans have turned to poultry and pork in the past 20 years.
The average American ate 89 pounds of beef in 1976, according to the U.S. Department of Agriculture Department. By last year, that fell to 64 pounds. The projection for this year is about 65 pounds.
The average American's poultry consumption has increased nearly 77 percent since 1976, to 63 pounds a year.
Health concerns over beef products have been an obstacle for the industry. While today's beef is leaner, some people still avoid red meat because of worries over fat, said Ann Grandjean, executive director of the Center for Human Nutrition in Omaha.
Pork has been riding the popularity of chicken by promoting its leaner cuts as ``The Other White Meat.''
The shift probably will force some cattle producers out of business, said Dick Clark, an agricultural economist at the University of Nebraska's research center near North Platte.
``We've got to figure out a way to come up with a cheaper final product at the store,'' Clark said. ``That doesn't mean we have to sell beef at the same price as poultry or pork, but the packaging could be different, the marketing could be different. We're behind those industries.''
So what to do?
Suggestions offered Tuesday included throwing out USDA's grading system for beef. The system classifies beef as ``Choice'' or ``Select,'' but panelists said it gets in the way of selling beef.
``The alternative is to leave it up to wholesalers to say this is a `Monfort steak,' for example,'' Clark said. ``Then if it's bad, the consumer doesn't buy Monfort again. You can bet Monfort would make sure their steaks were up to par, and the industry would gain more consistency.
``Think about it. People know `Hormel' hams and `Butterball' turkeys. Beef needs to catch up.''
Staff writer Greg Edwards contributed to this story.
LENGTH: Medium: 88 lines ILLUSTRATION: PHOTO: AP Cattle head to the scales Tuesday at the Omahaby CNBLivestock Exchange. Nearby, industry members urged better marketing
policies. color.