Agriculture faces a monumental challenge in meeting the food needs of global populations over the next 40 years, and a diverse panel of stakeholders discussed strategies and challenges during this week’s joint convention of the Colorado Cattlemen’s Association and Colorado Livestock Association.
The panel featured Mark Gustafson, who manages international marketing for beef packer JBS, Tom Goding, president of Bank of Colorado, and Jason Clay, senior vice president for market transformation for the World Wildlife Fund (WWF).
Gustafson began the discussion, presenting the meat-packer’s perspective, and particularly the opportunities and challenges for f U.S. meat companies in international markets.
JBS is the world’s largest meat packer, with global capacity to slaughter 94,000 cattle, 48,500 hogs and 7.2 million chickens per day.
In the United States, the company operates eight beef plants, employs 16,000 people and holds a 21 percent market share among beef processors.
Gustafson presented a “SWOT” analysis of the U.S. beef industry’s strengths, weaknesses, opportunities and threats in international marketing.
Among the U.S. beef industry’s strengths, Gustafson listed Cost-effective production, grain feeding, consistent product, consistent supply, USDA grading and economies of scale.
Under weaknesses, he lists the lack of traceability, lingering BSE issues, political image overseas, and the industry’s slowness in responding to changes in consumer demand.
For opportunities, he lists growth in consumer trust, growth in demand for chilled beef, retail growth overseas and U.S. input costs increasing less than those for some international competitors.
Among threats, he lists the shrinking U.S. beef herd, higher input prices, food-safety concerns, competition from other proteins and effective marketing programs from export competitors such as Canada and Australia.
Gustafson also outlined how some importing countries continue to impose trade barriers, often based on food-safety issues not supported by scientific evidence.
These include rejecting technologies such as implants and beta agonists that improve production efficiency.
He says, however, that the greatest challenge to the U.S. beef industry is the decline in our cattle numbers during a time when global demand is growing.
Goding focused on roadblocks to feeding the world from the economic perspective of a bank officer. He listed two key issues that challenge U.S. livestock producers in providing protein to global markets.
Price volatility, both for inputs and end products. Volatile cost of production equals volatile profitability, he says.
Increased capital requirements. Due to the high value of feeder cattle, for example, a feeder today needs almost 50 percent more capital investment for the same equity position on a pen of steers.
Goding also discussed a variety of “unknowns,” or unpredictable issues that could hamper our ability to export meats.
These include unforeseen consumer issues such as the “pink-slime” fiasco, government regulations, the European Union’s economic crisis, federal monetary policy, interest rates and the federal debt.
Representing the World Wildlife Fund, an international environmental group, Clay questioned how agriculture will manage to feed upwards of nine billion people without destroying the earth in the process.
Already, Clay says, human consumption is 1.5 times the earth’s carrying capacity. “We are eating the planet,” he says.
By 2050, the earth’s population will grow by two to three billion people, and global incomes will increase by nearly threefold. Food consumption as a result will double.
About 70 percent of the earth’s people – equal to the number alive today – will live in cities and will be consumers, not producers of food.
Meanwhile, Clay claims agriculture is the number-one source of habitat loss, erosion, pollution and greenhouse gas emissions around the globe.
About one third of the earth’s land surface currently is in food production, and the percentage is growing rapidly. “We need to freeze the footprint of food,” he says.
To do so, Clay believes we need to intensify production, but do so sustainably.
He acknowledges that livestock producers in the United States have, through the use of production technologies, increased their output of meat and milk while reducing the amount of land, water and feed inputs and greenhouse gas emissions.
Globally, he says, the most efficient farmers are about 100 times more productive than the least efficient. We need, he adds, to shift the entire curve.
There is no single solution to this food challenge, Clay says...
Source: Argentine Beef Packers S.A.
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