Beef Industry History
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Transcript Beef Industry History
Industry History
Intro to the Beef Industry
Industry History and Background
Economic Factors
U.S. Imports and Exports
Beef Price Cycles
Beef Production in the U.S.
Industry History and Background
1400s
1500s
Cattle reach
Texas, California
from Mexico
Cattle industry
emerging in
Florida
1600s
1700s
Cattle reach
New England/
New York from
England,
Northern Europe
1800s
Late 1800s
Cattle business
thriving; focused west
Family owned/managed
Produce 4-5 yr. old
grass-fed steers;
shipped by live train
INDUSTRY HISTORY AND BACKGROUND
1800s
Chicago/Kansas City epicenter for sorting,
distributing cattle via rail
Packers/processors also at rail centers
Refrigerated rail cars
Invented by G.F. Swift
Larger packers operated regional
shipping/distribution
New York, Boston, Philadelphia
INDUSTRY HISTORY AND BACKGROUND
20th Century
Federal Meat Grading System, 1920s
Federal Interstate Highway System, 1950s
No longer dependent on railways
From Carcass to Primal Cuts
Boxed Beef
Led to vacuum packaging
Led to block-ready, boneless, case-ready
beef
INDUSTRY HISTORY AND BACKGROUND
Early 20th Century
Economic recession
Beef demand falls
Cattle numbers drop to historic levels
Cattle and beef prices reach record high levels
INDUSTRY HISTORY AND BACKGROUND
Late 20th Century
From producer-driven to consumer-driven
Beef demand in rapid decline
“War on Fat”, 1990
“Taste Fat” vs. “Waste Fat”
Revived interest in quality which helped
rebuild demand
ECONOMIC FACTORS
Variables Impacting Beef’s
Profitability
92.6
140,000+
U.S. Farmers and
Ranchers
Average
herd size
million
cattle
(Jan ‘11)
Beef
production
26.3
42
billion lbs.
Gross income
of cattle
$45.3 billion
$74 billion
total inventory value
Total consumer
expenditures
$100 billion
Economic Factors Affecting
Supply and Demand
Top exporters
of beef
Top US export
market
Top US beef
supplier
Imports
The U.S. has 8% of the world’s cattle and
produces 21% of the world’s beef
The U.S. remains the largest importer of beef
globally, buying 2.3 billion pounds in 2010
valued at $2.83 billion
80% of the beef imported into the U.S. comes
from Canada, Australia and New Zealand;
mainly lean grinding beef for fast food
hamburgers
Exports
The U.S. was the #3 exporter of beef in 2010,
behind Brazil (#1) and Australia (#2)
2010 exports were 2.3 billion pounds valued at
$3.53 billion
The U.S. currently exports 10-11% of
production
Top export markets include: Mexico, South
Korea, Japan and Canada (~70% of total beef
exports)
The U.S. exported beef to 146 countries in 2010
Typically peaks in spring and fall when middle
meat demand is strongest and cattle supplies
are lowest
Bulk of cows used for lean trimmings are
marketed in the fall, resulting in lower prices
Tighter supply + grilling demand support prices
in spring/summer
Best prices during colder winter months
(cooking methods)
Increase in price due to new steak cuts
(Flat Iron, Petite Tender, etc.)
Holiday celebrations and summer grilling
increase demand and price
Higher prices in spring result of limited supply,
especially for Choice
Similar to Chucks; peak during colder months
Prices decline in summer due to increased
supply + decreased demand
U.S. Beef Production
Family owned/operated industry
80% in same family for 25+ years
10% in same family for 100+ years
Cattle raised in all 50 states
Various cattle breed types and crossbred cattle
Adapt to various conditions
U.S. BEEF PRODUCTION
At the Ranch
Seedstock Producer, grassland based
“Purebred” segment
Genetic base for breeding stock
Cow/Calf Producer, grassland based
Combine genetic lines to best meet market demand
(crossbreeding)
Sells to stocker or feedlots
Stocker
Specialized segment
Use grasslands as natural resource
Sells to feedlots for grain-based finishing
Feedlot
Use higher energy diets to achieve rapid gains to create the
world's highest quality beef products
U.S. BEEF PRODUCTION
From Packer to Market to Table
Packers
Purveyors/
Processors
Foodservice
Operators/Retailers
Harvest finished
cattle
Fabricate
carcasses into
subprimal cuts
Sort and “box”
beef
Market to
purveyors,
processors
Fabricate boxes of
subprimal cuts
Sell to foodservice
operators, retailers
Present product
to consumer
LABELING CLAIMS
Natural Beef
Not more than “minimally processed”
Label must explain “natural”
i.e., no added colorings or artificial
ingredients
LABELING CLAIMS
Certified Organic
Cattle MUST:
Be raised separately
Have access to pasture, though many are feedlot
finished
Be fed 100% organically-grown feed (grains and
forage)
Be treated when sick
When treated with antibiotics, must be removed
from program
Cattle MAY:
Be provided certain vitamin and mineral supplements
Cattle MAY NOT:
Be given antibiotics or enhancers for any reason
(or must be removed from program)
LABELING CLAIMS
Certified Organic
Prohibited:
Synthetic pesticides on pastures
Sewage sludge for fertilization of feedstuffs
Irradiation on beef products
Producers must be certified through USDA’s
Agricultural Marketing Service (AMS)
LABELING CLAIMS
Grass-Finished Beef
Feeding regimen for livestock raised on
Grass, green or range pasture, forage
Shall be 80% or more of the primary energy
source throughout animal’s life
Beef Industry Summary
Single most sustainable, renewable form of agriculture
that produces an amazingly nutrient-dense source of
protein
American beef industry dates back to 1500s
Railroads, federal highways revolutionized industry
Federal regulation began in 1920s
Focus moved from producers to consumers in late 20th
century
Tough to manage supply and demand for beef
Industry is major contributor to U.S. economy
U.S. a top importer and exporter of beef
Beef cuts experience seasonal shifts in price/demand
Specialty beef requires special labeling