SOUND POLICY, INNOVATIVE MARKETING KEY TO CATTLE PRODUCERS’ LIVELIHOOD

WASHINGTON D.C. (Sept. 21, 2000) - The key to continued prosperity in the cattle industry is strong oversight of mergers and acquisitions, favorable government policy and cattle producers’ commitment to innovative marketing practices, the National Cattlemen’s Beef Association (NCBA) said today.

This was the message in testimony NCBA president George Hall gave before officials from the U.S. Department of Agriculture at a Thursday hearing in Denver on industry concentration issues affecting the beef industry.

“It’s clear the cattle industry is changing,” Hall said. “We’re seeing an increased amount of our product going overseas. Even the way we market our product to consumers is changing.

“To ensure cattle producers have a fair shake in this changing market place, the government can implement policy that will help foster a business environment in which cattle producers can flourish,” Hall said.

NCBA has worked with grassroots producers to develop and urge Congress to pass policies that will improve profitability for cattle producers. The following are some of these issues:

•  Beef labeling – The cattle industry and retailers recently came to a consensus on labeling and submitted a petition to USDA outlining a voluntary program that would allow beef from cattle that fall under designated criteria to be labeled Beef: Made in the U.S.A.

•  Permanent Normal Trade Relations for China – This long-awaited legislation passed in the Senate earlier this week and the House earlier this year. It will give cattle producers access to the world’s largest consumer market.

• Interstate Shipment of State-Inspected Meat – This legislation was introduced in the Senate earlier this year. It would allow plants evaluated by state inspectors to ship their products outside state lines and into other countries.

• Carousel Retaliation – NCBA is urging the Office of the U.S. Trade Representative to release a revised list of products that would face tariffs in the EU trade dispute. Once in effect, carousel retaliation could help move the EU to comply with international trade rules, opening their markets to U.S. beef.

• Grade Rescission – Cattle producers have asked the USDA to stop putting U.S. quality grades on foreign beef products. The practice can mislead consumers by falsely indicating the beef products they are consuming were raised in the United States.

• Mandatory Price Reporting – It’s been nearly a year since Congress passed this legislation that would provide more market transparency. USDA published and received comments on a proposed rule earlier this year. The final rule is expected sometime this year.

“We consider government acts such as this as the more practical option to ensuring fairness and competition in the cattle industry,” Hall said. “More regulation and oversight could create a bigger problem.”

Alliances between ranchers, feeders and packers through contracts and marketing agreements is a growing trend, allowing cattlemen and women to produce a more consistent product that consumers are demanding. Alliances have the ability to give producers more chance to gain a greater share of the consumer dollar, Hall said.

“These types of business arrangements are new to the industry,” Hall added. “They are innovative, and they offer producers many options to improve profitability, animal quality and their bottom line.”

Current data show that changes in the beef industry are for the better. After years of steady decline, beef demand has been rebounding for the last two years. In fact, consumer spending on beef set a new record during the first half of 2000, according to CattleFax data.

Beef’s share of total meat spending is expected to grow in 2000 by about 0.5 percent to 40.3 percent -- the largest share since 1997. Total beef spending in 2000 is expected to grow by more than $2.6 billion and total a record $52 billion, about $6.5 billion larger than 1997.

“True, increase in consumer demand is partially due to our industry’s marketing efforts that have helped change consumers perception of beef and given them a reason to choose beef whether they purchase it in the grocery store or go out to eat,” Hall said. “But we must have favorable policy to maintain the financial health of the beef industry.

“If we encourage government policy that creates a positive business and regulatory environment, we will have a greater opportunity to continue to increase demand,” Hall said.

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Producer-directed and consumer-focused, the National Cattlemen's Beef Association is the  trade association of America’s cattle farmers and ranchers, and the marketing organization for the largest segment of the nation’s food and fiber industry.