I recently read an article titled “Economics of Animal Agriculture Production, Processing and Marketing” by Michael J. Boehlje. My marketing professor posted the article to blackboard for us to read. I found the article to be very interesting; it discussed a lot of important agriculture topics. I thought I would share with you all my thoughts on the main points of the article.
Along with higher energy costs comes an increase in costs of livestock production. Agriculture production is greatly affected by changes in energy prices due to energy consumed directly or by energy-based inputs such as fertilizer. High energy production costs will raise prices of agricultural products, reduce overall farm income, and lower agricultural output. Ethanol production is a huge factor in the livestock industry. The demand for corn for ethanol production has been the instigator behind the high feed costs. In my opinion, if ethanol production continues to increase, this creates a risk for animal agriculture as a whole. This affects the demand for higher values meat products, which then affects the overall profitability of animal agriculture.
I do not have a full understanding of how agri-food trade works, but from my knowledge, I think cross border flows are important for U.S. agriculture. Since the value of agricultural exports has risen, profits have also increased. Cross border trade has the potential to generate economic growth as well as reducing poverty among foreign households. In the long run, this product movement would increase U.S. production, productivity, and profitability in the agriculture industry.
The article focused a lot on comparing larger firms to smaller firms. Regulations cost smaller businesses more than larger businesses. I think this will eventually push several smaller businesses off the market, creating a monopoly. Those small businesses will not have the resources to stay in business. This leads me to question the agriculture growth potential and market conditions of the industry.
I believe the advantages of U.S. animal agriculture outweigh the disadvantages. The biggest strength that first comes to mind is our current market. Cattle are currently at record high prices; futures are not showing any sign of decreases anytime soon. Our beef exports have a strong performance with Japan and Mexico being our biggest buyers. We also have a high quality of meat, such as certified Angus beef, especially when selling on a carcass merit basis. Our pork exports are currently facing some challenges such as access restrictions in Russia as well as strong competition in the Japan market. Another weakness would be the fact that we import low grade beef. Finally, packer collusion is a factor in U.S. animal agriculture. Meat packers try to maintain dominance by controlling the meat market prices. This affects the market as a whole.
You can view this article online at http://www.choicesmagazine.org/2006-3/animal/2006-3-08.htm
Tyson Foods, Inc. is one of the world’s largest meat processors and marketers of beef,pork, and chicken. I recently read several articles online stating that Tyson will no longer be purchasing Canadian cattle for the U.S. beef plants. The company announced that the change was due to the U.S. country-of-origin labeling rules which require labels to be placed on packages that indicate where the animal was born, raised, and slaughtered. However, Tyson will continue to buy Canadian-born animals sent to U.S. feedlots.
Since Tyson will no longer be purchasing Canadian cattle, the company will experience a decrease in costs. The new rules would have increased costs because they entail additional requirements such as product codes and production breaks. Also, a Tyson spokesperson said that they do not have enough warehouse space to separate, categorize, and label products accordingly to the COOL requirements. The rule is designed to help the consumer during their purchasing decision.
Canada and Mexico are currently challenging the country-of-origin labeling rules before the World Trade Organization. They are claiming that it is a U.S. trade barrier.
Tyson is the third-largest buyer of Canadian cattle. Weekly, Tyson purchases roughly 3,000 cattle from Canada. What does this mean for our nation’s exports? Analysts predict that our nation’s exports will most likely decline more than 150,000 head a year
This decision will come into effect starting November 1st. I believe this will have a chain effect on everyone from consumers to cow-calf producers, not to mention the direct effect on the Canadian beef industry. What are your thoughts and opinions on this topic? How is this going to affect you personally?
Recently, the Food Dialogues were held in Columbia, Missouri. It was sponsored by Missouri Farmers Care and U.S. Farmers & Ranchers Alliance. I watched the discussion on Missouri Farmers Care’s Facebook page. The first discussion was regarding animal welfare and livestock. The second discussion focused on biotechnology- conventional and organic. Each discussion had a different set of panelist who had a background and expertise in a certain agriculture field. For myself, I have a strong background dealing with livestock so I had a more of an interest in the second panel than the first because I felt that I could relate my story and opinions to theirs.
One of the experts on the panel, Travis Tucker, who is the owner of Bleu Restaurant in Columbia, Missouri, is originally from my hometown of Thayer, Missouri. This made me have a special interest due to the fact that I actually knew someone on the panel.
I was pleased with the overall message that was given during the Food Dialogue. There were several current controversial topics that were discussed. One topic was regarding labels on food and the confusion that comes along with them. I think Chris Chinn, the owner of Chinn Hog Farm, made an excellent point regarding this topic. She stated that when people see the word “organic” they are lead to believe that the product is healthier than its counter product- when in reality the nutritional value is the same. Organic just pertains to the method of how the object was produced. Of course the infamous Chipotle video was brought up. I agreed with the panelist; I believe that the video was just a way for them to market their product and to beat their competitors. However, the video is a complete misrepresentation of the agriculture industry.
I personally think this is the best way to educate the public. In order to educate others we must tell our story and pass our knowledge onto others who are indecisive or have an uneducated view about an issue. We must educate people that have misconceptions because the agriculture industry is a vital part to our economy and country. These issues are highly concentrated on today and I believe they will continue to be that way.
I think anyone can learn something by watching the Food Dialogues. I learned that Missouri is ranked 3rd in the country for our cow-calf operations. Also, I learned that our country’s beef herd is the lowest it has been in 60 years.
If you have not watched the Food Dialogue video I strongly encourage you to do so on Facebook at https://www.facebook.com/MoFarmersCare or on their YouTube channel.
Photo provided by brownfieldagnews.com