The Future: How Do We Get There From Here?
Innovators find out what their customers want and supply it.


Innovators figure out what their consumers want and provide it, said Vern Pierce, University of Missouri, in Thursday morning's session.
BILLINGS, MONTANA (July 7, 2005) — According to University of Missouri Beef Economist Vern Pierce, the future promises to bring more change to the beef industry. However, Pierce said he believes one thing will remain constant. Beef retailers, wholesalers, processors and packers will continue to pay as little as possible for their inputs.

“Some beef producers may not like to hear it, but that is the way it should be,” Pierce stated. “That is how it should be for every business. That is the free-enterprise system.”

The same thing applies to beef producers, he added. They should pay no more than they have to for inputs and try to sell their products for the highest price that buyers are willing to give. However, Pierce said producers must recognize that customers need change. As that happens, it is the producer’s responsibility to adapt.

According to Pierce, the future of the beef industry is clear. It will be led by different people or, at least, people with different philosophies than are common today. He advised forward-thinking producers to recognize that they enjoy the closest thing there is to a free market. Some producers claim packers have too much power over the marketplace, but those producers might be using fear of market power as an excuse for their lack of entrepreneurship, he noted.

“Entrepreneurial producers have to wear a lot of hats,” Pierce said. “They can’t work in a vacuum. They need to understand all segments (of the beef industry), gather information and figure out how to get a bigger piece of the action.”

Pierce said the traditional commodity cattle business provided processors with a beef animal supply that is cyclical and inconsistent for quality. And while consumers have varying tastes and preferences, so quality takes on different meanings, all consumers appreciate consistency. They will pay for it. Consequently, retailers are learning that brand-name beef products offering quality and consistency attract consumers as repeat buyers.

To chart their course for the future, Pierce said, progressive producers are participating in vertically coordinated value-added systems attempting to capitalize on changing consumer demand. To capture their share of the “added value,” they are using information gleaned through partnerships to hone their production and marketing skills.

Pierce urged producers to determine what it will take to keep their cattle operations in business 10 years from now. Some will have to redefine how they do business in a changing market.

— by Troy Smith, field editor, Angus Productions Inc._© Copyright 2005 Angus Productions Inc.

Editor’s Note: This article was written under contract or by staff of Angus Productions Inc. (API), which claims copyright to this article. It may not be published or distributed without the express permission of Angus Productions Inc. To request reprint permission and guidelines, contact Shauna Rose Hermel, editor, at (816) 383-5270 or shermel@angusjournal.com.