The next five years will be a "prime determinant of the future of the beef and pork sectors." So says Wayne Purcell of the Virginia Tech Research Institute on Livestock Pricing (www.aaec.vt.edu/rilp).
Purcell says that over the next five years, the market will determine how buyers and sellers are able to do business. But, pending legislative proposals that would limit such practices as processors owning livestock will determine how alliances and other non-price coordination will evolve.
Purcell says the changes are coming "in response to a failed pricing system where the inability of public agencies to fix the grades and move us to high-tech descriptions blocked any possibility that the price-driven system would offer the vertical coordination and capacity for quality control so necessary to a consumer-driven marketplace." He adds that alliances and contract arrangements have been critical to the developing industry with its modernized product offerings.
He says some groups do not like the changes. Their reaction is to promote regulation of the marketplace to somehow protect the position of the independent producer.
"I wish the voices had been equally loud in encouraging developments in grades, in high-tech monitoring systems and in adequate budgets for market news so the price-based system would have had a chance to compete. But, the `big is bad' and the anti-corporate sentiments got in the way of the need to think through the issues, and we are where we are in mid 2000 - moving rapidly away from price-driven systems," he says.
A database of DNA fingerprints of bacteria that infect livestock and companion animals is in development. The Texas Veterinary Medical Diagnostic Laboratories (TVMDL) and BarCodes Inc., a Houston biotech company, are cooperating to develop the database that will allow the identification of bacteria with a high level of accuracy and in a fraction of the time of comparable methods.
The database, scheduled for completion in 2002, will be developed from bacterial samples already collected by TVMDL from animals submitted by veterinarians and animal health researchers around the world. Each bacterial substrain has a unique rep-PCR DNA fingerprint, a molecular version of the UPC barcodes used in grocery stores.
CAB goes north of the border. Certified Angus Beef (CAB) LLC, a subsidiary of the American Angus Association, recently licensed plants for both beef harvest and fabrication to produce CAB product in Canada. Licensees in Canada sold 14 million lbs. last year in Canada, ranking second only to Japan in overall sales. Some Canadian foodservice and retail licensees say they could double sales if CAB were processed in Canada. The total Canadian beef herd is about 10% of the U.S. beef herd, and about half of the Canadian herd is Angus or Angus-type.
Some type of mandatory nutrition labeling for beef is on its way. Mary Young, executive director of Nutrition Strategy and Research for the National Cattlemen's Beef Association (NCBA), says the proposed rule is currently being examined by the Office of Management and Budget, but it hasn't yet been published. She says the labeling may be placed on pack or at the point of purchase and would include fat, calories and cholesterol content. The cost to the retail industry is estimated between $45 million and $125 million to implement the mandatory program.
Increasing numbers of farmers and ranchers are doing business over the Internet. More than 600,000 U.S. farms and ranches accessed the Internet in 1999, with 15% conducting e-commerce transactions, new USDA Economic Research Service data indicates. Mitch Morehart (202/694-5581 or [email protected]) reports that of these farms, more than 40% reported purchasing crop inputs online in 1999, while a third reported purchasing livestock inputs, and a quarter reported selling livestock.
A lightning-caused blaze in southern Idaho's Magic Valley claimed 586 head of cattle on one operation alone, while more had to be destroyed later due to injuries sustained in the blaze. More than 20,000 acres were burned in the Aug. 19 fire that consumed an average of one square mile every six minutes. Human injury was avoided, but damages are estimated to be at least $500,000. An account to benefit the affected ranchers has been created at First Security Bank, P.O. Box 388, Gooding, ID 83330.
In addition, the Magic Valley Cattlemen's Association (MVCA) is also finalizing plans for a donation cattle drive later this fall. Interested ranchers will be able to donate heifers or cows to help the affected ranchers rebuild their herds. For additional details, contact MVCA president Bill Lickley at 208/324-7975 or Idaho Cattle Association board member Dan Danos at 208/934-5911.
McDonald's has ordered its egg producers to comply with strict guidelines for humane treatment of hens or be dropped as a supplier. Some think the guidelines could affect management practices industry wide and even the livestock industries. The guidelines specify a minimum space for each hen as well as an end to "debeaking" and the practice of withholding food and water as a way of promoting a hen's productivity. The egg industry has warned that the edict could lead to higher egg prices at retail.