The 2019 Cattle Industry Convention and NCBA Trade Show kicked off Jan. 30 in New Orleans, LA. Industry members and cattle enthusiasts gathered for three days of education, fellowship, business, and a little bit of fun.
Bill Cordingley, managing director and head of Wholesale Banking Chicago Office at Rabobank, opened the 26th annual Cattlemen’s College with an outlook over North America’s social, economic and political role in global beef dynamics.
[inline_image file=”fd72fe2083469ac0eb45faac2d15d5c7.jpg” caption=”Dr. Temple Grandin demonstrates proper live cattle handing techniques.”]
North America’s role in the beef industry
Cordingley said there were four main factors to consider for North America to stay a top contender in global beef trade. He expressed the use of technology as a challenge but a necessary opportunity for beef producers. Technology has rapidly accelerated the pace of change in any industry and is a vital tool to allow consumers and stakeholders to engage in the beef industry and with each other.
“Online, truth can look a lot like fiction,” Cordingley said, explaining why using technology as a platform to inform consumers is essential. He continued on to share how “science isn’t necessarily our savior in this setting.”
Consumers are looking for authenticity and personal stories from agriculturalists and want to feel good about what they are eating. Sharing a personal story rather than paragraphs of straight facts can help make the consumer feel more positive and influence their buying decisions at the grocery store.
There has been a secular trend over the last decade of consumers caring about where their food comes from. This has driven consumer behavior in a way we haven’t seen before, Cordingley said.
Another big influencer in the beef industry is trade. Cordingley conveyed the need for the U.S. to play to wealthy markets such as China, where there are an estimated 300 million “wealthy” consumers. Exports have accounted for 12 percent of total U.S. beef production and are on trend to hit 15 percent this year.
[inline_image file=”a62a8c362d55cb28a189c821e5a4e2eb.jpg” caption=”More than 10,000 people were in attendance at the NCBA Industry Convention and Trade Show in New Orleans, LA in 2019.”]
The U.S. beef industry has shown itself to come out on top for beef that is the highest quality at the lowest cost, but there are competing markets that have yet to develop into their full potential. Canada, Australia, Argentina, and Brazil have the capacity to improve and become stronger competitors against the U.S., Cordingley said.
He added that social capital is becoming a larger driver in beef consumption. Beef producers have a moral and legal obligation to utilize natural resources in a way that consumers see as acceptable. Producers must become better at telling a positive story to uphold the standard of moral principles consumers seek.
In order to improve the U.S. beef industry’s odds of success, Cordingley strongly stressed that producers need to strive to “do it right.” This includes a commitment to continuous improvement and striving to be more progressive. Technology must be embraced and trade must be prioritized. Producers need to educate and engage with the consumer more than ever.
Cordingley said producers must learn how to tell the positive side of the industry and that we “can’t apologize for beef.”
2019 industry outlook
In the second general session of the Cattle Industry Convention, the CattleFax team delved into an outlook of future trends and driving factors in the market.
Long term, the cattle cycle suggests a price risk continuing into the early 2020s, even with beef cow herd expansion mostly complete, a report by CattleFax read. On average, cattle producers will receive a smaller percentage of the retail beef dollar as price pressure increases across all beef industry segments.
A record high of beef production in 2019 and continuing into 2020 will “burden the supply chain to move additional volume.” However, improved grazing conditions and a larger 2018 calf crop have led to more cattle outside of feedyards. But with the supply chain limited by processing capacity, growing cattle supplies will “weaken bargaining position for cattle producers into the next decade,” the report read.
Retail beef prices are expected to see some inflation in 2019, but “larger beef, pork and poultry production will be price limiting,” CattleFax reported. Beef demand is expected to be positive with a strong job market and increasing wages in the U.S.
Global economic growth appears to be slowing in 2019, but beef export markets are expected to increase, and ratification of the United States-Mexico-Canada Agreement will be critical for U.S. protein exports, the report showed.
The big picture outlook for the industry is positive and shows added value and minimized costs into 2019 and beyond.
Weather trends
Dr. Art Douglas, professor emeritus at Creighton University, presented a weather outlook for the year of 2019. He shared that El Niсo conditions have most likely peaked and will show slow cooling into the summer and nearly neutral conditions by the late summer or early fall.
A high-pressure ridge will favor moisture in the Northwest and Southern Plains, and dry out Southwest deserts, as well as the eastern third of the country. A cooler February will lead into a relatively mild spring with a reduced threat of delayed planting, Dr. Douglas said.
Depending on how quickly El Niсo fades will determine summer weather conditions. The southern half of the U.S. will most likely have a wetter summer. La Niсa conditions are not expected to develop by mid-year, so dry areas are likely to persist. — Anna Miller, WLJ correspondent
