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The Term Of The Century

Clark Willingham didn't inherit a ranch or a feedyard. Nor did he grow up in rural America. He entered the cattle business because he wanted to. He believes in the industry and has proven it by leading several organizations. It's this desire, drive and determination combined with a clear vision for a better, more profitable industry that he believes prepares him to lead the National Cattlemen's Beef

Clark Willingham didn't inherit a ranch or a feedyard. Nor did he grow up in rural America. He entered the cattle business because he wanted to. He believes in the industry and has proven it by leading several organizations. It's this desire, drive and determination combined with a clear vision for a better, more profitable industry that he believes prepares him to lead the National Cattlemen's Beef Association (NCBA) into its next century.

BEEF talked with Willingham and he shared thoughts for the next century of beef production.

Some don't perceive you as a "born and bred" cattle producer. What makes your background, your career and your involvement in the cattle business right for the industry?

I'm in the beef industry by choice. My accounting and law degrees give me a business approach to the industry - one of the reasons I became involved with the Texas Cattle Feeders Association. I learned a lot about the industry from Ladd and Paul Hitch. They're farmers, cow/calf producers, feeders and at one time were involved in the meat packing business. They helped me learn industry traditions. I have a broad education on the segments of the industry. Every weekend I'm in Dallas, I try to go to my feedlot north of town. I've been blessed with family and partners that have allowed me time to spend for the industry.

What makes you qualified to be president of NCBA?

It's the experience I have on the dues and checkoff side of the industry. I was president of the Texas Cattle Feeders Association and the Texas Beef Council. I've also served on the board of the Beef Industry Council, National Live Stock and Meat Board and the U.S. Meat Export Federation. And, I served as president-elect of the National Cattlemen's Association prior to the merger and have done so again as president-elect of NCBA.

NCBA is experiencing some growing pains. What are your primary goals to remedy them? The primary goals for NCBA after the merger were to gain greater efficiency and focus. We've achieved both. All offices and the U.S. Meat Export Federation (MEF) are working in the same direction following the same long-range plan. This has allowed us greater efficiencies throughout the organization. We're more efficient on the support staff level, too. We're executing more programs than before because we've moved some people from administrative positions to program positions, primarily in accounting and meeting staffs. Now, we have one accounting staff, one communications staff and one meeting planning staff. Meetings are probably the biggest area where we're saving money because we don't have four organizations having four meetings. Plus, state organizations have saved money because there are fewer meetings that staffs and volunteers must attend.

What type of support is available for these goals?

The concept of greater focus and efficiency is one which anybody can buy into. Yet, it's also harder for people to see. Much of our improvement is in administrative functions that aren't highly visible. Duplicate administration has been cut. The merger wasn't about getting rid of any programs. It was about getting rid of duplication and getting the same personnel to do more programs. Allied industries are very supportive because we're operating the association with a businesslike approach.

What's the status of NCBA's operating income and expenses?

Membership numbers were down the first two years after the merger, but that was predicted. In 1997, membership dollars were up. We had a lot of naysayers when we first got into this, but that group is now saying the merger works. We're seeing more producer players come back to the organization because it's viable and can get things done for the industry.

Preliminary figures show a deficit on the dues side of $45,000 and a surplus of $2 million on the checkoff side. Overall, operations are very good. Revenue is better and we had some cost savings in overhead and program expenses. We've got a good system that allows us to adjust midstream and trim expenses if needed. Our financial goal is to break even. We're in the business of spending money for the industry and promoting it, not creating reserves.

How important are strategic alliances to the cow/calf producer, the feeder, the packer and the consumer?

Alliances continue to be very important. They're growing because the ones in existence have worked. Alliances are still the best way to get paid for value in cattle. If you sell them through a feedlot or auction barn, you're not going to get full value, especially if you've spent time and money improving your genetics. You need to get paid for your investment.

The customer determines value - the one who puts down cash for the meat. The only way for us to share in what the consumer pays is to have some sort of marketing system that's tied to what the consumer pays, not just live pounds per animal. I'm not in favor of integration, but we do need alliances to get the greatest value. We've got to find ways for the producer of better-quality cattle to get more money. If we all sell to the next segment on an average price, producers will never get the money due them.

Where do traditional marketing venues such as local auction barns fit into the future beef industry?

The auction barns are essential for the smaller producer to participate in value-based marketing. The livestock auction may become a facilitator for putting cattle together and sending them to the feedlot, but producers get carcass information, etc. The only way smaller producers can do this is if the auction barns put them into an alliance. If the auction barns don't do this, someone will. The Extension service and state cattle associations are doing this already in some cases. If you've got three head with good genetics, you should get paid for that. Alliances aren't just for big producers. Everyone needs to get paid for genetic improvement.

Where does NCBA stand on food safety issues, new policies, etc.?

Food safety must be priority number one for the entire industry. We're in a food safety coalition with USDA and other groups to create a character similar to Smokey Bear, called BAC. It's one component of an education program to educate people how to handle food properly. We have a coalition that grew out of the Hudson Foods situation, which Chuck Schroeder is chairing, that will try to find ways to prevent E.coli and pathogens in general from the farm through processing.

Discuss new product research in progress.

It's hard for an association to be the originator of new products. We try to be a catalyst to encourage private industry to develop them. As far as actual products are concerned, NCBA has invested money in the development of Beefeatas(tm), ROTISS-A-ROAST(tm) and RiteBite(tm) steak. We're in the process of getting different companies to market these products. We also have a $250,000 cash prize available for the best new beef product brought to market. We continue to partner with Sara Lee, Jimmy Dean and other food companies. New beef products are needed and we're doing everything we can to see they're delivered to consumers.

What's the status of the Brand-Like Initiative? How are members responding?

The membership in general is not in favor of the Brand-Like Initiative, but they're in favor of everything it stands for. It is new products, it is brand marketing. It hasn't sold, though I believe producers buy off on its individual programs. The idea of a brand-like initiative is thought of as moving too fast and we are moving extremely fast. The Brand-Like Initiative is simply going to be the catalyst to get private groups to do the things you'd do if your products were branded. There are a lot of programs in which producers are getting paid and these will continue to happen with or without NCBA.

Detail the results of the Beef. It's What You Want. consumer ad campaign?

Initial focus groups on It's What You Want are positive. Producer feedback is negative. I'm not sure where we go from here. We really don't have checkoff money to kick off a big advertising campaign. With the food safety issues we have today, we may refocus the advertising campaign and work on food safety until this issue is behind us. That decision will come from the annual NCBA meeting in Denver. My gut feeling is that we're going to prioritize more toward food safety, health and image rather than the current ad campaign.

What potential exists within export markets?

Food safety has a big impact on the export market. BSE (bovine spongiform encepthalopathy) and E.coli have affected this, but we are working to restore faith in the Japanese market. We'll have an increase in Mexico. Overall, we'll be down a little bit but the export potential is still huge. We must continue to work with MEF to take advantage of these markets. One of the keys is access and tariffs. Dues dollars are used to lobby to open markets as well as execute trade agreements. We have strong growth potential in the Korean market and most Asian markets. Mexico and Canada are our second and third export markets.

What primary items do you want NCBA to accomplish in 1998?

* We've got to get a handle on the food safety issue - that's number one.

* Second, is to enhance the positive image of beef from the nutrition angle. We want to educate consumers that beef tastes great and is also nutritious.

* Third, continue working on private property rights issues and tax relief.

* Finally, I'd like to see the industry move to value-based marketing. The big changes in product quality will only come when we get paid for what we produce. Those at the bottom end of the quality ladder will stop producing lower-quality beef and the overall quality of cattle will go up. Those producing better-than-average cattle will get more money and those producing lower-quality cattle will get paid less.

As the 100th anniversary of a national cattle producers' organization, 1998 is a milestone year. What's the national organization's most significant accomplishment of the past century?

If you look back at 1898, the problems sound the same as today. The reasoning in 1898 was that we can do more together than we could apart. It's working together for the common good - we've gotten rid of brucellosis and other health-related maladies. Consider the regulatory items we've accomplished or stopped in Washington. That's an example of what we can do as an association. We need a national association because we've got national issues.

What factor in today's industry gives you the most hope for a continued viable industry? What factor is the most discouraging?

It's encouraging that people like the great taste of beef. Can we improve it? Sure. We've got the people and the resources inthe industry to get it done. The naysayers are the ones not willing to get with it.

Our fierce independence is both our greatest strength and weakness. What's discouraging to me from the producer standpoint are the negative attitudes and the lack of willingness to try to change. The consumer is changing and we've got to meet these desires. Also, it's the bad press we get and the myths told about our product. It seems anti-meat groups have great relationships with consumer media throughout this country. We've got the programs to try and combat this and we're using them.

Environmental and anti-meat groups are using the courts more as a means of achieving their agendas. The cattle industry seems to lack effort and resources in this area. Is this important?

Litigation is definitely one of the tools we must use. That's why NCBA formed the CATL (Cattlemen Advocating Through Litigation) Fund. The industry as a whole hasn't supported that effort. Very little money has been contributed and most dollars have come from the association itself. This will continue to be a big priority for NCBA. I hope the industry sees the importance of this and contributes more. We've had some wins, including Iowa producer Wythe Willey's court victory regarding inspection inequities, but we need more.

If all power were concentrated in your hands, what would your first three decrees be for the industry?

* All producers would follow a quality assurance program.

* All finished cattle would be purchased by packers on a value-based system.

* All producers would be members of NCBA and their state associations. If we'd do that, we'd have the dollars and the clout to work on other industry issues.