From the Podium

This post, and the potential for future posts, dedicated to Joan and Father Justin, who reminded me (repeatedly–I am slow sometimes) that when God gives you a gift, He intends for you to (at least attempt) to give it away. 

Since yesterday at 10:00, I’ve had several folks contact me and ask me to publish the remarks I gave at #CIC14. I’ve attempted to remember just what I said, and so here is a version that I’ve edited a bit for length. Of course, I reserve the right to have edited anything that caused my inner self to say “GAK@(*$)*!!” when it came out of my mouth yesterday. You may not know that this happens fairly regularly, although not as much as it used to three years ago. Perhaps you’ve had this experience–if so, please let me know that others do it too. I’ll feel so much better. 

Cooperation. Working together toward the same end–for common, mutual, benefit. Sam Walton said the secret to success was ‘working together.’ Apparently Mr. Walton was both a minimalist and a dreamer. Alexander Graham Bell said: “Great discovering and improvements invariably involve the cooperation of many minds.” Indeed, we can find one successful leader after another reminding us that the key to bringing any organization or undertaking to improvement is cooperation.

So, while it seems a frivolous or fluffy thing to say (and it is easy to SAY and much harder to DO), for the beef industry and the Beef Checkoff Program, it’s a necessity and one that requires each of us to take a breath, give up on being right every time, and roll up our sleeves for the greater good.

By working together with beef councils, contractors, beef trade organizations and by coordinating our efforts with the entire chain of those who touch an animal or animal product, we get the best beef we are capable of. (Or for that matter, the best ideas, the best of anything, really).

Further, I submit that through the power of cooperation, we get results that are measurable.

My focus of the Cattlemen’s Beef Board and the Beef Checkoff Program is on key metrics associated with management. Those key metrics are what I would like to share with you. Today, I’ve chosen three key measures, out of several we use on a regular basis. But this year, right now, these three stand out as some of the most important ones we have.

1. Producer Approval and Awareness of the Beef Checkoff Program

The first of those metrics is producer awareness and approval of the checkoff program, which we measure bi-annually. Results of our latest Producer Attitude Survey, completed just a few weeks ago, suggest that we are on the right track. For example:

  • At 91% name awareness among producers of the beef checkoff program is very high and on the rise
  • AT 78% the beef checkoff program has the highest level of producer support in 21 years
  • 80% of producers believe the checkoff contributes positively to consumer demand for beef
  • 79% say the checkoff does a good job of representing their interests
2. Financial and Management 
Each year, the Beef Board undergoes an external, independent, financial audit. Since the beginning of the Beef Checkoff Program, no external audit has found any evidence that CBB was not in compliance with the Act & Order or the AMS Investment Policy. In fact, during the last four years, the auditors have not only issued unqualified opinions, but also have not  recommended any changes in CBB policies or procedures. We have made substantive and important changes on our own, in the quest for continual improvement.
In December, we received the results of a USDA AMS management review of the Beef Board–the first ever in our history. That comprehensive management review, which covered not only financial performance but also many other areas of our management, had no findings. In fact, at the conclusion of the review, AMS commended us for excellence in operations.
In early 2013, the Office of Inspector General at USDA published an audit report of AMS and the Beef Board. That review (sorry, can’t link to the original report, they’ve replaced it now for reasons you’ll soon learn) found no evidence of the complaints that spawned it and affirmed that the Beef Board was in complete compliance with the governing legislation. Then (just as we had finished our sigh of relief that the two-year ordeal was over and we could get back to 100% promotion, research and education), OIG announced that additional complaints had caused it to initiate an additional review of the first review under the Data Quality Act. The revised report, issued about a week ago, reinforced the results of the original report.
(Still with me?!? Amazing!)
All this to say that producer investors (remember, no federal tax dollars are used in the Beef Checkoff Program, only monies invested directly by beef farmers and ranchers) can be reassured by key metrics over the past two years and longer, including: 1) the OIG audit 2) the audit of the OIG audit 3) the AMS management review 4) CBB’s “clean” external audits and 5) our continued commitment to continuous improvement.
I don’t really know of another beef industry org that has been more painstakingly audited over the past two years than the Beef Board, but these repeated examinations and investigations provide a body of independent and collaborated evidence.
3. Consumer Willingness to Pay for Beef

January’s OSU Food Demand Survey data indicate that consumer willingness to pay more for steak increased 7.6%, and willingness to pay for burger remained stable. While we do see static in these data from month-to-month, this made me scratch my head, and then cheer. If consumers continue to be willing to pay higher prices that our low supply situation and their own preference for our product dictate, this is a strong demonstration of the value they see in beef–both in home and at the restaurant. Checkoff market research indicate that the supply situation has caused a pullback in meals eaten at home. Remember, in a low supply situation, we have to see the pullback somewhere.
But beef remains strong in foodservice. So strong, in fact, that current data indicate beef represents the largest volume increase of any protein at foodservice–despite a shrinking supply.
Frankly, I expected to see more of a shift away from beef with higher prices. But, consider the following:
  • Consumers still get relatively inexpensive burgers at foodservice.
  • Consumers like the “quality guarantee” they get at restaurants. “Better to have a chef prepare that high-priced steak.”
  • Consumers love to celebrate with beef–and that often happens at a restaurant.
Recently, I saw a story in the media with a headline about chicken consumption passing beef consumption for the first time in 100 years. Then, the author went on to explain it with myriad reasons for reductions in beef consumption like nutrition and fat and production and…Now, don’t get me wrong, the beef people must continue to improve on all aspects important to consumers like nutrition and fat and production and…In fact, in a recent Twitter discussion, Glynn Tonsor from K-State may have said it best–the entire beef community must continue to work together to align beef offerings closely with the desires of our consumers. In the end, this is cooperation and success.
But the truth is, we simply could not be seeing an increase in consumer consumption right now. It is impossible. We don’t have enough beef in the market — due to those factors farmers and ranchers know so well–drought being perhaps the most heart-wrenching of them. So that author of this article, I fear, just didn’t understand the marketplace well enough, and like the Greeks of old, made up an explanation for something s/he didn’t understand.
All of this to tell you that demand for beef increased 2% in 2013. Despite a lot of folks trying to make it so, consumers aren’t ashamed to love beef. And have the intelligence to separate facts from hype.
It is with innovation and creativity that we may bring tremendous opportunity for our organization and our businesses to fruition in 2014. These opportunities ripen and prosper when we incorporate a diversity of ideas and work together–from consumer to beef farmer families. Ninety percent of innovation is timing. I believe this organization and this program is ripe for innovation this year. Decision we make will affect our business and our stewardship for years to come. Imagination plus innovation equals goal realization.
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