Friday, March 04, 2005

Where's The Beef

As previously noted, I have decided to take a quick stab (pun intended) at the beef iindustry and the mad cow disease situation in Canada. Of course, this is important to the Kansas and Missouri area because we are part of the big beef industry. Farmland has it's corporate offices and it's experimental coop farm in the KC area.

Kansas City holds the annual American Royal every year where stock owners from all over the country bring their animals to show. The "beef on the hoof" show being the largest, competing equally with the more showy horse competitions and rodeo.

Kansas City is still a "cow town".

With the continuing crash of the Canadian beef market, one can sincerely ask, "Where's the beef?"

On to the inner sanctum to find out.

Border To Remain closed to Canada Beef.

The story is out of Montana and starts out talking about the two new cases of Mad Cow Disease found, but, when you get down the story, you've got the real answer:

United Stockgrowers of America, based in Billings, had argued that the USDA plan would pose a risk to both consumers and U.S. cattle producers. The organization asked the judge to block the reopening until its lawsuit is heard.

If you followed up with their attorney's statement about the Mad Cow Disease risk and left it at that, you'd probably think they were just being "sensible" as they claim. Except, you would miss out on this pertinent piece of info:

Then, in December, the government announced plans to further expand trade, including allowing live cattle under 2 1/2 years old and certain other animals and beef products from Canada.

It's economics folks. Canadian beef, after the last mad cow scares, is cheap, cheap, cheap on the hoof although costing a fortune per processed pound.

The Canadian cattle industry has been devastated by the U.S. beef ban, with losses amounting to about $5.6 billion.

According to AGNET, the closing of the border not only meant less competition in the US, but, with the Mad Cow scare in Canada and the destruction of whole herds, it also meant exports to Canada were sky rocketing. Another issue here is that, with the growing demand of beef, many ranchers have skimped their herds down to a minimum and need to rebuild. High beef prices means more money in the pockets of US ranchers for building bigger and better herds.

This will also help them take advantage of growing markets over seas, particularly taking up the slack where bans on Canadian beef have left some openings for increased American exports.

At the height of the Canadian beef crisis, Cucchiara said he was having difficulty getting U.S. beef from the major packers.

"It was the first time in 35 years that I couldn't get enough beef from our processors because Canadian beef is a lot of our country's production," he said. "Processors get premium prices for U.S. beef exports and so the supply was limited."

The other issue is the fear of these live cattle, potentially infected, becoming part of the herds here in and causing the ranchers in the US the same pain of destroying entire herds and damaging their ability to export, ultimately causing the US beef industry to crash and burn. That is a legitimate concern.

I note this quote from the government:

An attorney for the government, Lisa Olson, argued that the plan was as safe as it possibly could be and was based on science. "There's no health risk here," Olson said.

And she said that because?

Then, in December, the government announced plans to further expand trade, including allowing live cattle under 2 1/2 years old and certain other animals and beef products from Canada.

You be the judge. I think I'll keep buying American beef a little while longer as much pain as I feel for our Canadian counter parts.

However, you ought to be aware of how the beef marketing program works, just so you understand that quality control checks haven't changed, you're just more aware of it:

And, he gave an example of how creative marketing has helped 38 Price Chopper stores in the Kansas City metro area sell more beef.

"They hired an advertising company to come up with a name for their beef line," he said. "They called it KC Pride Beef and ran ads in the media touting the new name and encouraging consumers to come in and try it." The ads promoted the wholesome characteristics of the line and that there were strict safety controls to the selection. In reality, the quality controls and requirements were the same as they'd always been, and the beef was under the same strict guidelines for safety and wholesomeness. The ads were just informing consumers about them. However, the company received 400 consumer calls within the first week of ads saying that the new line of beef tasted better. It was all about marketing, Cucchiara said.

"Consumers will believe what you tell them," he said. "That's why we need to do a better job of educating them. People are starving for nutrition information and cooking suggestions. Thank you for the Beef Checkoff dollars because they help us sell your beef. Maybe if we had processors matching those funds we could be even better educators."

But, what about that Canadian Mad Cow thing?

Food safety is a big concern to consumers, he said (Cucharria; Associated Wholesale Grocers).

"I believe the U.S. has the healthiest and safest food industry in the world," he said. "We are safe. We don't buy Canadian beef and we aren't going to either.

Let's hope so.

1 comment:

Cigarette Smoking Man from the X-Files said...

Mad Cow's not just a Canadian thing. Some American cases have been found, but they've been hushed up. Nowadays I only eat beef when I absolutely crave it to the point I'm willing to take the risk.