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Taking Dead Aim At The US Cattle Business. AN OVER-VIEW OF THE USA CATTLE MARKET & FUTURE THREATS. Global Animal Products, Inc. (US Office) Ken Ridenour, M.S. TOPICS. The USA Feedlot – Current Cattle Industry Beef Checkoff Program Future Threats
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AN OVER-VIEW OF THE USA CATTLE MARKET & FUTURE THREATS Global Animal Products, Inc. (US Office) Ken Ridenour, M.S.
TOPICS • The USA Feedlot – Current Cattle Industry • Beef Checkoff Program • Future Threats • Personal Opinion – Direction That The World Cattle Market Could Take In The Future
TOTAL CATTLE IN THE USA97.1 million head (Jan. ’07)Average cow herd size – 35 head • 97.1 million • 3rd consecutive year of expansion • 33.3 million beef cows • Heifers held back 5.9 million • Calf crop estimated at 37.6 million head
ETHANOL • 110 Operating Plants • 8 of the above are expanding • 73 plants are under construction • 18.85 billion liters of ethanol were produced in 2006 • 42.987 billion liters are expected to be produced by 2009 • 49 to 57 billion liters of ethanol are expected by 2012
ETHANOL • 2006 ethanol production required 2.56 million hectares of corn – 20% of the US corn harvest • An estimated 4 to 6 million more hectares of corn will be planted in the 2007 crop year • For the first time in history over 50% of the corn produced in the USA will be used for something other than animal production
Beef Checkoff Program • Established as part of the 1985 Farm Bill • Totally funded by the beef producers and no Government funds are utilized • Funding is $1 USD per head on both domestic and imported beef • Fifty cents goes to the National Organization • Fifty cents goes to the State Organization
Mission Of The Beef Checkoff Program • Check program is dedicated; • To improving producer profitability • Expanding consumer demands • Strengthening Beef position in the market place • Research funding for all phases of the Beef Industry
Beef Checkoff Program Funding • Revenue 2006 -- $45,238,376 USD • Expenditures: • Promotion $24,800,185 • Research $6,233,497 • Consumer Information $5,637,074 • Foreign Marketing $3,997,592 • Producer Communications $2,029,143 • Industry Information $1,091,269 • Program Evaluation $226,538 • USDA Oversight $143,722 • Program Development $123,661 • Administration $1,547,899
Beef Checkoff Program Conclusion • Acts as a catalyst for Change. • Doesn’t own cattle or retail outlets. • Can’t single-handedly turn around a bad market. • Designed to stimulate others to sell more beef. • Stimulate consumers to buy more beef. • Initiatives are accomplished by consumer advertising, marketing partnerships, public relations, education, research, and new product development.
B.S.E.A Closer Look At Mad Cow Disease • New vCJD is reported in 200 people world wide
Study presented at Europe’s annual human reproductive conference Study design – 100 men consumed 6 pints of beer in 1hour Observations made in 100% of subjects • All gained weight • Talked excessively without making sense • Became overly emotional • Could not drive • Failed to think rationally • Refused to apologize when wrong • Could not preform sexually • Had to sit down while urinating
Conclusion of Study There has to be female hormones in beer
Bio – Terrorism Foot and Mouth Disease
MATURING FEEDLOT INDUSTRY • 3 Major Packers Cargill-Excel Swift (Monfort – ConAgra) Tyson (IBP) • Vertical Integration • Contract Growing for Packers
USA CATTLE INDUSTRY – LONG TERM • Suburban Sprawl • Land Price • Government Land • Environmental Impact and Regulations • Government Subsidies
SUMMARY • 30% of US feedlot head capacity is held in 10 companies • Three beef packers control slaughter and marketing • Maturing market for the feedlot industry – cattle business
CRYSTAL BALL PROJECTIONS • Feedlot – Cattle will decrease • More imports will be needed Australia South Africa Brazil • Consumption – Beef will follow Lamb
Global Animal Products South Africa Proud To Be Associated With The South Africa Feedlot Conference Beef It’s What’s For Dinner!