Productivity: The pursuit of increased productivity in any industry is relentless (if you want to remain competitive). Relative to cows, my favorite recent example comes from a producer I work with. Over the winter, he purchased some new hay equipment including an 18’ cutter (trading in two 9’ cutters). One of his hay fields is 50 acres; before the equipment swap, mowing with a 9’ cutter required ~11 hours; the new 18’ cutter finished the job in less than four.
I’m guessing no one would trade their Power Stroke Super Duty for an older F250 powered by Ford’s 460 gas engine. That would also mean swapping out your 35’ flatbed trailer for something more like a 20-footer (more trips, lost productivity). And then there’s the hydraulic squeeze chute – just a half-day working cattle and you wonder how you’ve ever gotten along without it. More work, less time.
More With Less: With that in mind, perhaps one of the most surprising things about 2024 thus far is fed beef production – through May (and the first week of June) it’s outpacing 2023 and nearly on track with ’21 and ‘22. That’s somewhat counterintuitive given the industry keeps talking about inventory drawdowns.
But 2024 is just an extension of a longer-run trend. The first graph highlights the beef industry’s productivity gains since 1980. Producing more (beef) with fewer (cows) isn’t a new story – it’s an enduring (and favorable) trend.
More Better: But the story doesn’t end there. Along the way there’s also been a quality revolution that’s occurred. That’s best demonstrated through the National Beef Quality Audits (NBQA) over time as detailed in the table below.
Several items seemingly stick out. One, per the discussion above, cattle have become bigger / growthier over time. (Yes, there’s a biological limit to those efficiencies – but that’s another discussion for another day.). And two, perhaps most importantly, marbling has improved by nearly an entire score – the bulk of those gains have occurred in just the past ten years or so (more better beef, less cows).
(For the camera grading skeptics: all of the NBQA data is based on in-plant cooler assessments – not grading stand audits. And it matches the industry trend thereby further debunking any claim that camera grading is an industry “farce”.)
Any vs Every: The beef industry is no different than any other – the only way to survive, let alone advance, is to continually improve productivity (in every aspect of the business). But the permabears always sidestep the reality of the need to pursue continuous improvement.
Instead, they keep telling us about declining beef cow inventory as the mark of everything wrong the industry (NAFTA, packers, market, etc…). In their mind, shrinking cow numbers is the telltale sign of the industry’s demise.
Productivity gains are driving the industry’s competitive position – generating more dollars than ever. However, that doesn’t come without change. Business analyst Michael Hammer describes it best: “Increasing productivity does enable a company [or industry] to lower its costs while increasing its output and that ought to be good for any business. But what is good for any business, it turns out isn’t good for every business.”
And in the end, cow inventory, adjusted for carcass weight gains, has actually increased slightly since 1980 (see second graph). Productivity: more better with less.
Vintage Cows For Sale: Once someone experiences productivity gains, there’s no going back. The old cutter, the early-model pickup, the manual chute? “No thank you.” And in that same vein, I don’t think any serious producer really believes granddad’s cows were better - even if there were more of them.
But then again, maybe there’s an untapped market for heirloom cattle? Perhaps something like Larry David’s Spite Store – we’ll call it, “Vintage Cows For Sale”.
Nevil Speer is an independent consultant based in Bowling Green, KY. The views and opinions expressed herein do not reflect, nor are associated with in any manner, any client or business relationship. He can be reached at nevil.speer@turkeytrack.biz.
