Challenges and Opportunities As We Move Ahead

Click here for photo of Jim McAdams

By Jim McAdams, NCBA president

All of us want to extend this profitable period we’ve been experiencing for as long as we can and smooth out the valley in the cycle as much as possible. Success will depend upon how effective we are in continuing to build demand. Only by growing demand faster than we grow supplies will we be able to flatten the boom and bust cycle.

Building beef demand and enhancing our business climate is exactly what NCBA was created to do.

 Focusing on building demand has been the single best decision that we as an industry have made in the last 20 years. It only worked because the majority of us in all segments participated. Together, we have increased demand by 25 percent since 1998.

 Some are concerned about whether we can compete in the international market. The fear is that we cannot produce beef as cheaply as countries such as Brazil. This is not dissimilar to the fear we had regarding poultry in the past. When we first started losing demand to poultry, we concentrated on increasing our efficiency. Being as efficient as possible is vital in a competitive market, but producing a desirable product efficiently is paramount.

The United States produces the highest quality, grain-fed beef more efficiently than anyone in the world. That is our competitive advantage and we must always maintain and enhance that advantage. That means that our goal isn’t to produce a protein that is as cheap as poultry or as cheap as other countries’ beef. Our goal is to produce the protein that has the highest value in the world the most efficiently.

But we must be able to sell it to the world’s consumers in order to achieve the highest value for our products. Our delicacy might be prime rib, while in other parts of the world it is tongue, brains, or cuts we don’t even think about. We need international trade so our industry can reach its full potential.

A strong domestic and global marketplace for our beef is critical to our ability to grow our profits and to grow our ranches and feedyards so that our sons and daughters can have a future in this business. We need to embrace our ability to compete globally and work to strengthen the competitive advantages with which we are blessed. We are the world’s strongest economy. We have a strong infrastructure, fertile soils, superior climate, highly educated and motivated producers and superior research and technology capabilities. 

Some confuse NCBA’s faith in our ability to compete globally with a belief that we support unfettered access to our domestic market. That is not the case. NCBA has been and will continue to be ever vigilant in ensuring that whatever enters this country is safe, that our cattle are protected and that America’s cattle producers are never placed at a competitive disadvantage. Trade must be fair, whether it is here at home or anywhere else in the world.

NCBA values are the values that made this country great and made our industry successful. We believe in capitalism and free markets. We believe in the democratic process and majority rule. We believe in limited government and the entrepreneurial spirit.

This means the role of government is not to tell us how to run our businesses and market our cattle, but rather to create rules that allow for fair business practices and to see that they are fairly enforced. We fully expect and will hold the government accountable for creating and enforcing fair trade agreements, but we must be very cautious regarding government encroachment into who can own cattle and how we market our cattle.

We are seeing a loss of trust in international trade because countries have not acted with integrity. That is why I’m so proud of the actions of the National Cattlemen’s Beef Association. The actions we took came from directions from our members through their affiliates. It would have been easy to stay out of the court case that blocked the opening of the Canadian border. But we knew the rule for opening that border was based on sound science. To slander the science was to slander our own practices and would have created an environment for distrust. We did the right thing — rather than the easy thing — and I’m convinced we are better off for it. The border is open, the market absorbed the opening in good fashion, and consumer confidence in beef is higher than ever.

But we have chaos in international beef and cattle trade today. To continue moving forward we have to restore integrity.  To do that, we have to have rules that are followed. Two of the major economies of the world are using international rules to violate the spirit of agreements — Europe and Japan. We can’t support trade agreements until we can trust both the rules and the spirit of agreements will be followed.  Free trade must be fair trade as well.

That is why NCBA is working with our government to develop the most effective measures necessary, including sanctions, to ensure we are treated fairly. We are not asking for abusive retaliation, but we must take the measures necessary to achieve fair trade.

We followed a blueprint that allowed us to turn beef demand around. In the coming days, the Beef Industry Long Range Planning Committee will unveil the next phase of a continuing long range plan. It will be the proposed blueprint for the next five years. Selected by the officers of NCBA and the Cattlemen’s Beef Board, this group comprises some of the best thinkers this industry has to offer, from every segment of the cattle/beef chain. It will be submitted to all cattle and beef industry stakeholders for review and input.

It is a good plan, but it will be up to each of us to decide if it becomes the plan. After being reviewed over the next few months it will be considered for approval at the Industry Annual Convention in Denver in February. The plan calls for the industry to mobilize around these objectives — building beef demand, increasing beef’s market share in the protein market, increasing the value of what we produce and setting standards for managing fair international trade.

Success will depend upon how well we support and follow this plan. We are going to continue to meet consumer expectations and produce the safe, healthy product that they desire. We are going to find countries that are willing to trade with us to create win/win scenarios just like we are continuing to find companies and organizations and coalitions here at home that are willing to work with us to grow our industry. We are going to operate with integrity and earn the trust of those we work for and those we work with.  We are going to beat the competition because we do it right and we do it better.