Marketing the positives that we have

Last month, I read the book 'The Meat Racket', which tells of the top and tail takeover of the American meat industry by processors. Starting with chicken, they moved into the pig sector, bankrupting farmers and raising customer prices, and are now muscling into the beef industry.

Farmers are screaming. According to Daniel Mushrush, a Kansas rancher, processor profits are higher for the brief period they own the animal than the total price received by the rancher with his long-term investment in the cow, the land she grazes and the variable costs of the calf. Charges are made of market collusion, insider trading and price rigging.

'The Meat Racket' related the history of the gigantic meat processing company, Tyson Foods. Its strategy is based on vertical integration. This starts by buying the firm’s suppliers.

In Tyson’s case, first the feed mill, then the slaughterhouse and then the hatchery. It also acquired the haulage company and after that, the processing plant where the raw meat is converted to ready meals.

It doesn’t own the farms, but controls them by insisting they buy their inputs from Tyson’s companies and they sell only to Tyson at Tyson’s price.

They started with chicken then did the same with pigs and some 90% of pig farms disappeared as shop prices rose when, at the same time, farm prices dropped. Fewer and fewer pigs were sold on the open market. Each 1% rise in the number of pigs sold under contract has resulted in a 0.88% drop in the price at independent auction.

Nowadays, Tyson and three other processing companies are increasingly dominating the beef industry. Cattle producers, aware of what has happened to chicken and pigs, are trying to stop the processors dominating the auction process by vertical integration with only mixed success.

Since 1996, 11,000 ranchers have ceased trading and 30% of feedlots have sold up. Four companies – Tyson, which is the biggest, Cargill, JBS Swift and National Beef – now process 85% of the nation’s cattle. Increasingly, they set the rules of the game.

At present, much discussion is about the recent trade deal with Australia with farming seen as Britain’s trade off. How significant the effect on our cattle and sheep prices will be in the short term is open to question, with suggestions that it may not affect us very much.

It is relevant that the Australian deal is the first and the UK trading position on agricultural products will have been noted by every other country hoping to deal with us in future.

At present, ABP controls 20% of the British beef kill and greatly influences the prices farmers receive. Maybe we aint seen nuthin’ yet.

A worry is that our government’s soft stance on agriculture could, in a future deal with USA, open the door for their big four processors. We would be in their sharp claws like the American ranchers are now.

For the last two months, I have been on the road more than for some years. It's noticeable that rotational grazing is being increasingly practised. Undoubtedly, improved electric fencing technology has helped this along.

At home we are splitting up more and more of our pastures. We certainly haven’t totally embraced best practice – our excuse is that, when bulls are with cows mob sizes are constantly changing and we don’t risk the bulls by putting them next door to each other.

We don’t even do the basic stuff like measuring pastures using beer cans, marks on wellies or sward sticks, far less a plate meter. I was intrigued by a service being trialled in New Zealand which measures pasture cover by satellite and beams the result to the farm office by e-mail. Could be a game changer!

Whatever deal we make with Australia and New Zealand, we will need to sharpen our act with the kind of sheep we breed.

The Australian Five Star Beef eating quality programme has featured in our farming press recently, however not so well known is that the Australians have been researching the eating quality of their lamb for many years, with a very positive effect on consumption.

Their sheep meat, which will increasingly compete with our own, is tasty stuff. In addition, like their Kiwi counterparts, they breed sheep which can lamb unsupervised.

Some years ago I lambed NZ Romneys. They were a revelation.

When I read Neil McGowan’s regular article and the recent feature in The SF about James Drummond, like Neil a Nuffield Scholar, I am greatly heartened. At least a few breeders are concentrating on what really matters in sheep production, when so many of our pedigree breeders still place so much emphasis on great ear set and black teardrop.

Indeed, some breeds of sheep (and cattle too) are, due to extreme muscularity, becoming more, rather than less labour intensive. Any fool can see that labour availability, not only in farming but many other industries, is already in short supply.

The arable sector has overcome this by using bigger and bigger machines, however this option doesn’t exist with extensive livestock production. Quite simply, we must now breed for a future when skilled personnel can be spread more thinly.

The performance movement in the sheep industry is at present where it was in the beef business 30 years ago. The challenge it faces, as it was for cattle then, is low profile.

Performance means regular weighing, tedious recording and accepting that the results aren’t always what you would like them to be. There’s no 100k tups, stockperson of the year award, or silver cups.

The answer must be to raise awareness by repeatedly highlighting the message and targeting how it is sold. Marketing has always fascinated me and still does.

As we sell almost very beef animal on farm, I devoured marketing books and listened to numerous cassettes and CDs on the subject. How good I ever was at it is questionable, but it kept us in business!