Do Well, Do Good

Word map: Pennsylvania State University Student Centered Farm

I have been asked to post my Winter 2016 Management Report, so here it is…

What is social responsibility? We hear that phrase all the time in the media—but what does it really mean? Is it charitable giving? Is it employee development? Is it just a bunch of hooey?

Whatever you think of the definition, it is the truth that everyone in this room practices social responsibility, pretty much every day.

And I would bet that nearly everyone in this room believes that as a citizen, of the U.S. and of the world, each one of us has some responsibility to protect, and indeed to improve, those things that matter to all, or that we all share, and over which she or he has influence—humanity, community, environment, society, government.

And truly, who in agriculture has a better social responsibility story to tell than you? You may have mixed feelings about some of the personalities involved, but knowledgeable environmentalists like Allan Savory have noted for decades — well-managed beef cattle operations offer holistic health to the land, efficiently producing nutrient-dense food for our society through improvement of soil, encouragement of diverse grasslands and wildlife, and carbon sequestration.

Like Tom’s Shoes “One for One” campaign, beef has “Tons for One” value. With beef, you’re not just giving your family a nutritious meal, you’re supporting open space, clean air and water. You’re ensuring the animal that feeds you, never has to worry where its next meal is coming from, and has room to wander, either on grass or in maintained pens. (As an aside, it puzzles me that operations raising chickens in pens receive admiration and a premium, while operations raising cattle in pens get attacked by media and arsonists alike.) You’re giving deer, moose, mouse and grouse room to ramble. When you buy beef, you support an actualization of sustainable, socially responsible concepts Americans value, but don’t intimately understand.

The checkoff-funded lifecycle assessment indicates that we have achieved a 3 percent reduction in water use, a 2 percent reduction in energy use, a 10 percent improvement in water quality. These are the result of innovative thinking, of our use of technology, of efficiency.

But I keep looking through the windshield, thinking of the challenges ahead. Aren’t real solutions about much more than telling your current story — or even looking in the rearview mirror to defend what has been? What really matters is your future story, and the stories of your children and grandchildren. Because you have the power to improve and shape those stories.

After all, beef, and food, isn’t just YOUR industry, it is a public cause. And among us in the beef “cause” there are public and industry “Galahads”—and public and industry “Don Quixotes”. Many, many people care about the beef “cause”. That simply is the truth of where we are today. I know that I feel challenged daily, and even frustrated sometimes, by the demands and expectations that surround the production of food today. And I know you share that frustration. Goodness knows the expectations, and real challenges in food production are many, and growing. And it often seems like our support from society-at-large is shrinking.

Yet I know that each of you feels a social responsibility with regard to food production, because I have talked to you about it, visited with you about the civic and social issues for which you feel individual responsibility. Healthy, strong rural communities. A wholesome, safe food supply. You care about feeding our country, and feeding the world, more than many do. For example, the issue of food security is a complex global issue linked to economics, health, development, and trade. You may think it is only an issue for developing countries, and while USDA’s Economic Research Service says 86 percent of US households were food secure throughout 2014, a whopping 14 percent, or 17.4 million households, in America, were food insecure. Larger food, environment and community health issues such as this are critically important to you, your consumers, society as a whole. You actively work to address those concerns, and these concerns are shared with the rest of your beef community—your customers that purchase and process your cattle, and your consumers, the folks that cook and eat your product.

So…I know that you do, that voodoo that you do, making grass into nutritious, delicious food, out of your passion for the work, the land, the animals, but also, out of a sense of social responsibility to America and the world at large. And I am here to tell you that your consumer, particularly your largest, most powerful group of consumers, the millennials, share a strong sense of social responsibility with you.

A national poll taken about a year ago found that 9 out of 10 Americans still believe that social responsibilities like reporting a crime, understanding the national language, and serving on a jury are “very important.” The research indicated that millennials believe we must care for those around us, particularly through volunteer community service. In fact, that belief is much stronger in those under 30 years old today than it was three decades ago, and much stronger in this age group than in those folks who are more than 50 years old. This sense of responsibility to society is especially pronounced among young people, when it comes to social well-being in disadvantaged populations for core human needs like food, shelter, basic medical care and clothing.

 “And so, my fellow Americans: ask not what your country can do for you, ask what you can do for your country.” –JFK

I ask you to take an introspective look at your assumptions and beliefs about social responsibility—because I believe this area offers tremendous opportunity for beef in particular—a unique opportunity even among other agricultural business due to the way we raise beef, and the positive impacts we have on environment and human nutrition.

Make no mistake, these opportunities translate into improved economic sustainability for us–shared social responsibility that makes great business sense.

Many organizations have learned that cutting-edge innovation and competitive advantage can result from weaving social and environmental considerations into business strategy from the beginning. I honestly believe that the winning companies of this century will be those who prove with their actions that they can be profitable and increase social value—those that both do well, and do good.” — Carly Fiorina, while at HP

A current Harvard Business Review article on what will make businesses successful into the near future, says businesses must ensure that they contribute positively to the system while receiving benefits sufficient to justify participation.

HBR warns: Companies that fail to create value for key stakeholders in the broader system will be marginalized

A robust business into the future, HBR says, must have leaders who ensure that the company is sufficiently diverse along three dimensions: people, ideas and endeavors.

Doing well and doing good. Well-executed social responsibility and sustainability efforts create economic value for businesses in ways that also create value for society.

Win-win situations.

Long-term, sustainable business operations.

Integrating social responsibility tenets within business decisions results in both economic value for the product or organization as well as increased value for society, and the individual consumers in it. But the incorporation of such elements, often means a completely transformed way of thinking about the business model, with an eye toward increased economic viability through betterment of social value.

Think of it this way: caring for the environment, the water, the grass, the air, and the animals, increasing production efficiency improving land and the larger environment, results in economic viability for your operations and fulfills the social requirements of the members of our food community on the eating side. Business decisions, in the checkoff and at home, that always consider the needs of both ends of the food community spectrum result in greater marketability and greater profitability.

This isn’t about a section of the budget that deals with responsible, sustainable decisions, it’s about a thought process that considers a responsible, sustainable future in every business decision. Social responsibility isn’t just a charitable act, or solely philanthropic. It is both self-interested and societally interested at the same time, assuring your own economic, social and environmental viability well into the future by way of assuring social sustainability. This may be a central shift in our way of thinking about some of the projects, some of the efforts, we fund.  But a shift that pays dividends—to your operations, to the beef community and to society as a whole.

Our founding fathers knew the value well. George Washington said, “I know of no pursuit in which more real and important services can be rendered to any country than by improving its agriculture, its breed of useful animals, and other branches of a husbandman’s cares.”

And Benjamin Franklin: “There seem to be but three ways for a nation to acquire wealth. The first is by war…The second by commerce…The third by agriculture, the only honest way, wherein man receives a real increase of the seed thrown into the ground, in a kind of continual miracle.”

The checkoff, and the industry, has made progress. We continue to get better at focusing our efforts holistically. We now have the Consumer Trust Committee dedicated to building the trust, and the bridges, between the producer of our beef and the eaters of our beef—to me, this committee represents a major checkoff program focus on the responsibility that we, and our society, share with regard to food. Our Long Range Plan mentions trust repeatedly. I mentioned our lifecycle assessment–our checkoff has been investing in sustainability research and benchmarking in the form of lifecycle assessment for several years now, to understand how we can become even better at fulfilling our end of the commitment we have to society. These are critical, and strategic, ways that the checkoff is moving into the future of responsible business as envisioned by both us, and our consumers. Social responsibility also includes things like consumer engagement and producer-level animal health and welfare standards and practices, including programs such as Beef Quality Assurance and extensive consumer education programs – with consumers directly, with restaurant and other foodservice operators, with butchers and retailers, with processors, with a full range of physicians and other health influencers. And we continue to grow our Masters of Beef Advocacy program, which helps prepare producers like each of you to meet social responsibilities through transparency and active listening to consumers, adapting where necessary, then sharing with those consumers how you help meet their needs, and the needs of their families and communities, including consumer and community health and safety. These are all pointed toward constant change and improvement of our management practices and our communications.

Last year I mentioned to you that I believed we needed to advance a fundamental change in our relationship with our customers. I said society has evolved, and consumers are seeking a more direct relationship with the way their food is produced and what they put into their bodies. We will not succeed into the future unless we continue to include them in our beef community. I believe we are doing a good job of engaging and telling, thereby better including our consumers. But I believe it is time for that next logical step toward a tighter relationship with consumers—and that step lies within our ability to learn, and change.

We know, from growing our touch points and engaging our community, that we share a passion with our consumers about food and social issues surrounding food.  The secret to our survival as a center-of-the-plate item in worldwide diets relies on our ability to answer critical questions. How can we focus more on creative and innovative solutions to challenges, and less on defending the way things are? How can we step out fearlessly to tackle sticky issues in our industry head-on? How can we enlarge the scope of factors we consider in our business decisions? How can we courageously embrace change, and the future, even if it means setting aside some of the ways we currently do business in favor of future gains? How can we turn information into improved strategic thinking, about future linkages between your business, the betterment of society and the desires of consumers? How can we embrace our own dedication to our economic sustainability, the viability of our environment for our children’s children and the responsibility we already feel to feed Americans and beyond, to make every decision, a sustainable, responsible, viable-into-the-future decision?

We must work to keep a holistic way of thinking on equitable footing with economic factors in every decision we make on behalf of the checkoff. This is the way of the future for businesses that hit targets on all three measures of sustainability—economic, social and environmental. Our ability to broaden our thinking will determine our level of success with our marketplace, and our success in passing our business, and our resources, along to the next generation.

So what is my call to action, for you today?

Be brave and thoughtful when faced with frightening challenges.

Don’t mistake disagreement, or even passionate, constructive discussion for combat.

Use your powers, of consideration, of dollars, of your critical role in society, for the good of all.

Consciously refrain from automatic “us against them” responses.

And most of all, remember that as checkoff leaders, you are a driving and influential force in the sustainable future of the beef industry.  You can effect change. You can make a difference.

Unlocking Value Through Innovation

Innovation Change Unlocks Value March Blog

Make no mistake, despite some vocal minority voices that say otherwise–people want to eat beef.  The latest beef demand numbers say plenty, with the All Fresh Beef Demand Index having increased an astounding 13 percent year-on-year during the fourth quarter of 2014. 13 percent – that’s the largest year-over-year increase in any quarter since 1990 – 25 years. Of course, the beef checkoff can’t take credit for the entire growth in beef demand – but our community is realizing this growth despite our tight supply in recent years, which points to growing consumer preference for our product and, according to economist Glynn Tonsor, “strong consumer loyalty to beef.” In fact, demand for beef has increased in 18 of the last 19 quarters through December 2014. And for the full year in 2014, beef demand increased 7 percent – the best growth we’ve since 2004 and the second-best since 1990.

Looking at one area where the beef checkoff focuses on innovation, the NPD Group – a global information company – reported recently that a total of 9 billion servings of burgers landed in U.S. restaurant and foodservice tables in 2014 – up 3 percent from 2013. This was in sharp contrast to overall sandwich servings for the year, which dipped by 2 percent – or 201 million servings. Burgers lead the sandwich segment, and that’s no accident. The checkoff worked closely with restaurant personnel nationwide to help create many of the burger options you see on restaurant menus today. Because we have asked consumers what they want – with market and product research at the base of every checkoff program – we may assist chefs and restaurant owners in understanding and fulfilling beef community desires. Because of this, today’s burger is much more than a bun-wrapped patty. Instead, beef burgers are a discriminating and purely individual selection from hundreds of creative options, including burger bars where folks can put their sandwich together just as they like it. Some people (like me) still want a simple, perfectly grilled beef patty, topped with Wisconsin cheddar, lettuce, tomato, onion, ketchup and mustard. But given the high price of beef, you can understand why many folks feel like their burger experience is more valuable when they get the exact combination of flavors that delight their palate. And we aim to please.

As I mentioned earlier, research forms the base of virtually all beef checkoff programs. That includes market research to keep in touch with our consumers’ demands and product innovation research to keep making improvements and changes to meet those demands. Let me give you a couple of examples of the important connection between research, product innovation, and a blended beef community. Think about breakfast – a meal that in which beef has been largely absent. Our market research tells us that consumers want beef at breakfast, too. So the checkoff’s Beef Innovations Group and culinary team worked through a coordinated product development initiative to help chefs and restaurateurs bring beef products to the breakfast table, developing recipes for breakfast beef burritos, beef and egg breakfast mugs, basic country beef breakfast sausage, beef bacon, steak and eggs breakfast tacos, and beef breakfast pizza, to name a few. Once perfected, we also distribute recipe innovations to consumers through the digital platforms where they say they want to receive their beef information. We rely heavily on partnerships where restaurant of retail partners invest as much as $60 to every checkoff dollar. It’s a win-win-win for farmers and ranchers, restaurants and retailers, and the customers who love beef–a.k.a. the beef community.

So can we celebrate the win? Absolutely. But what we cannot do, is rest.

We need to take a very thoughtful, disciplined approach to the future of the beef community, too.  We are in a unique position to offer a certain experiential value to our customers that separates us from other proteins. We have unmatched equity in the area of creating food experiences to meet our customers’ search for those experiences, not simply chow or belly fill. Serving up these experiences will require that we continue to nurture and grow the trust we have gained in our beef and agriculture community by providing truth, transparency and value. By pleasantly surprising and delighting our customers constantly. By pushing beyond the status quo and reinventing the beef experience, even when we are experiencing tremendous success in demand. Especially when we are experiencing tremendous success.

“Coming together is a beginning; keeping together is progress; working together is success.”  ~Henry Ford

Expanding Our Community

You will find truth more quickly through delight than gravity. Let out a little more string on your kite.

~Alan Cohen

I think it’s fair to say that the beef checkoff program has been in the thick of some dynamic debates recently. And while those discussions are important, we simply must stay focused on why we, as beef farmers and ranchers, are here: to make every beef meal a delightful one.

delighted woman 2 blog

Does the word “delightful” sound out of context here, to you? I have become increasingly dedicated lately to the concept of customer delight—an awesome, unexpectedly wonderful customer experience. We are part of a larger team that works each day to delight customers and feed people.

I know we have the skills, and the tools, to ensure a delightful customer experience. But the noise around us definitely is a barrier we have to overcome. Whether that noise is about us or peripheral to us, we must remain tightly focused on our beef community, especially our customers. We are the producers, and producers are a small subset of the eaters (yes, Virginia, we eat what we make!). Together, we are a broad community of food nutrition, health and enjoyment.

We must remember that delighting the customer involves listening and continuous innovation – not resting on what delighted yesterday or maintenance of status quo. Continuous innovation allows us to work toward enriching our customers’ lives with our product by bringing them into the beef community.

Just to be clear, when I say ‘beef community’ here, I’m summarizing a rapidly occurring (much-needed) change in our relationship with our customers. Society has evolved (or, we have returned to this relationship, I haven’t quite decided which one it is), to a place where consumers seek a more direct relationship with the way food is produced and what we put into our bodies. Some producers in our community may not like the thought that our community wants to know about our food. But truly, every eater has an intimate relationship with food. Food is nourishment, family, laughter, love. When we are sad, we turn to food for comfort. When we celebrate, we eat. A certain dish brings back memories of loved ones, whom we cannot touch or hug. The aroma of grilling steak makes our bellies rumble and our neighbors gather. Too many among us long for the simple chance to eat something, every day. Food is the fabric of who we are.

As a beef community, we will not thrive unless we include both producers and eaters. Make no mistake, consumers, “eaters”, are very much part of what we have so often referred to (and I cringe when I say it) as the beef “industry’ (what an ugly concept, and word, to describe the relationship we have with the environment, and food!)

“The secret of change is to focus all of your energy, not on fighting the old, but on building the new.” ~Socrates

Toward this end, we have to be very smart in our search to delight and include our customers in our beef experience. We have to innovate our animal care, environmental management, and product quality, form and usefulness with a careful eye toward the desires of our consumers – even if we don’t fully understand, or share, those desires.

At the same time, we must continue to educate consumers who are generations from a laying hen or the wonder-filled birth of a baby calf about how nature works, the sanctity and care involved in our work, and the symbiosis of the unique relationship between farmer and Earth.

To do this, we must think about beef’s total experience for today’s community. We have to do everything we can to demonstrate that we are adding value to the lives of people, here and elsewhere, through things we all care about – nutrition and health, interesting and attractive food experiences; taste that delights; and the demonstrable reassurance that beef is produced with careful stewardship of land, animal and environment.

“We need to reach that happy stage of our development when differences and diversity are not seen as sources of division and distrust, but of strength and inspiration.”

~Josefa Iloilo

3 2015 Food_connections_support

The Gift

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Many people think of Christmas as the season for giving, but the truth is, giving spans all seasons. American volunteers have an enormous impact on the health and well-being of communities worldwide, be they agricultural, faith, or your own hometown or neighborhood — to the tune of 7.9 billion hours of volunteer service that added $175 billion to the U.S. economy in 2012.

Still, farmers and ranchers, particularly those in the beef business, stand out when it comes to giving to others: While one in four Americans volunteers time to causes about which they are passionate, nearly 50 percent of cattlemen and women do. Knowing them as well as I do, that doesn’t surprise me, but reminds me again how blessed I am to have such dedicated folks on my Board and across agriculture. These givers help define the future of rural communities where they live by maintaining strong family ties, giving back through time and money, providing leadership and spurring economic growth.

cattlemencontribute 12 2014

Looking deeper into the general study of American volunteers, I notice that volunteer rates differ among age groups—and maybe not exactly as I would have expected. The volunteer rate of Generation Xers (that’s me!) has trended upward during the last 11 years, increasing nearly 5.5 percentage points. Volunteering among teenagers (ages 16-19) also has trended positively during recent years, up nearly 3 percentage points since 2007. When it comes to hours spent volunteering, volunteers ages 65 and older spent a median of 90 hours on volunteer activities in 2012, the highest among any age group, and far above the 50 median annual hours served by the general volunteer population.

And giving gives you back. A 2013 study found that volunteering may improve your mental health and help you live longer. Researchers found evidence that volunteers had lower levels of depression, increased life satisfaction and enhanced well-being (without pharmaceuticals….yay!!!).

Given all this, I cannot help but revisit a thought I’ve had several times over the past few years (and I know that others have the same question): beyond individual giving, what is the role of organizations and companies in giving, to improve communities and society? Individual efforts result in major personal returns. Do organizational efforts amplify those returns? And, like the mental health, satisfaction and engagement benefits individuals clearly enjoy, does a giving organization also grow stronger, healthier and more resilient to organizational stressors? I suspect so.

I recently read a blurb in the magazine Associations Now (the membership magazine of the American Society of Association Executives). In it, a highly successful CEO of a trade association in Washington, DC reflected back on many years of service, in preparation for her retirement. She mentioned that a program of volunteering for Habitat for Humanity, spearheaded and organized for many years by the association, was one of the primary sources of member engagement, and fulfillment–aside from the main purpose of the trade association itself. She credited that volunteering program with teamwork, a sense of accomplishment and dedication that bled into all other areas within the association.

For example, (I’m thinking out loud here, always dangerous in a public setting, but I’m feeling mellow) if the organization I manage began an opportunity to volunteer at local food banks twice a year in whatever town our Board meeting is held, what would that do for the organization and Board relationships and functionHominy 12 2014 blog? Would it bring us closer? Make us more effective? Help us communicate better? (Would I be standing there alone in a shelter in downtown San Antonio, holding a 3-year-old can of hominy in one hand and potted meat in the other, wondering what happened to everyone?)

I strongly believe that healthy organizations must not only be willing to change, but must seek out positive change. Stagnant organizations produce stagnant results–a strategy for organizational growth and change is a strategy for the future. We must be responsive to customers, we must accurately predict the market, we must grow our products responsibly and carefully. But my question centers on something different: inclusion of an element heretofore outside of the realm of a traditional business plan. The simple concept that giving, gives back.

(Slightly related author’s note: I highly recommend Adam Grant’s book Give and Take if you haven’t been picking up what I’m laying down so far…and you want to. If you’re bored by this post, enter “hominy” in your search engine and let me know exactly what it is, as I’ve always wondered if it’s a seed, bean, legume, starch or what? I usually whip up some beef posole at some point during the winter months, so any help would be appreciated.)

If you know of research on the effect of an organizational giving effort (and I don’t mean development, or cash gifts. I mean a program of service, spearheaded by an organization, apart from its governance structure), could you share that with me?

I’m clearly in reflective mode as this year closes (reflection is an excellent indoor activity, since the weather today is ‘freeze your boogers’ coldand if you don’t know what that means, you’ve never taken a deep breath at -10 degrees).

Only good comes from reflection. (Right?!?)

“Dreaming isn’t as simple as it sounds. On the contrary, it can be quite dangerous.” ~Paulo Coelho

Metrics Matter

Deming theories

Sometimes, I’m asked what is going on at the Beef Board (as in “Heeeeey, whassup?” Not as in “What in the h-e-double toothpicks is up?!?!?”—although that happens too. That’s another rant…er, I  mean blog…though.) Despite some of my more touchy-feely blog shares, when it comes to management, I believe big-time in metrics and measurement. After all, you can’t manage what you don’t measure.

W. Edwards Deming (another one of those darned brilliant Iowans…what’s in the water in that state?), is the granddaddy of modern “measure-to-manage” strategies. Those of you not familiar with Deming might have fun first clicking back and reading some of my earlier blogs on Japan and then researching this great man and his impact on Japanese business systems (and world wide systems as well, but the Japanese were the first to listen and adapt). In 1960, the Prime Minister of Japan, acting on behalf of the Emperor, awarded Deming Japan’s Order of the Sacred Treasure, Second Class. The citation on the medal recognizes Deming’s contributions to Japan’s industrial rebirth and its worldwide success. Historians say Deming was known for his kindness, compassion and humor (Salsburg, 2002). This great man passed away in 1993, the same year he founded the Deming Institute in Washington, DC.  And today, his name and famous 14 points are eponymous with modern, metrics-based management. Many of you have heard me drone on about continuous improvement without giving the Deming Cycle or Deming himself credit—a miss on my part (I cannot even say I am even a very good student of Deming, although I try).

Deming-Cycle-Graphic

Perhaps, in the future, I’ll tell you about some cool new evaluation projects we have going on at the Board this year. But for now, let’s talk about performance.

Metric 1: Producer Awareness and Approval

This bi-annual survey asks checkoff investors if they aware of, and if they approve of, the management of the checkoff program. Many years of data allow us to trend line both awareness and approval of the program. The results of our latest survey, completed in January, show:

  • At 91%, name awareness among producers of the beef checkoff program is on the rise and rated by the independent research firm as “very high”;
  • At 78%, the research found the highest level of producer approval of the program in 21 years;
  • 80% of producers believe the checkoff contributes positively to consumer demand for beef; and
  • 79% say the checkoff does a good job of representing their interests

Metric 2: CBB Management

Each year, the Beef Board undergoes an external, independent financial audit.  The external audit determines if our financial statements are fairly stated in all material aspects. Since the inception of the program, all external audit reports have resulted in “unqualified” or, in laymen terms, “clean” opinions. In no case has the external audit found any evidence that CBB was not in compliance with the Act & Order or the AMS Investment Policy. In fact, for the last four years, the auditors have not only issued unqualified opinions, but also have not had a single recommendation for improvement – such as changes in policies or procedures.

Last December, we received the results of a USDA Agricultural Marketing Services, or AMS, Management Review of the Beef Board—the first ever in the history of the Beef Board. The objective of the AMS Management review was to ensure the Board was in compliance with the Act & Order, the AMS Guidelines, the AMS Investment Policy, the CBB Bylaws and CBB’s internal policies and procedures. The review had no findings. At the conclusion of the review, AMS commended excellence of management and operations at the Cattlemen’s Beef Board.

While we’re talking about audit metrics, I’d like to address the Office of Inspector General “peer review” of its own report issued early in 2013. This review confirmed the initial conclusion of the 2013 OIG eport that found no audit issues or lack of compliance by AMS, the Beef Board, or Beef Board contractors was found.

Personally, I don’t know of any organization that has been more painstakingly audited that the Beef Board and Beef Checkoff Program have been in the last couple of years – but the above findings (or lack thereof) certainly provide a validated body of assurance.

Metric 3: Consumer Willingness to Pay and Beef Demand

The latest Oklahoma State Food Demand Survey data indicate that, in March 2014, consumer willingness to pay more for hamburger increased by 5.42 percent. Remember, though, that if consumers are continually willing to pay the high prices that supply has helped dictate in the current marketplace — it’s a strong litmus test as to the value they see in the beef and beef products they are finding in the meat case and enjoying in restaurants.

Due to the Board’s 2013 Beef Demand Determinant Study  and the checkoff’s ongoing market research, we know that price – along with demand drivers including food safety, product quality, health, nutrition, and social aspects and sustainability, play roles in consumers’ decisions about purchasing your end product.

It’s so important to understand the role of these drivers. Willingness to pay is an absolutely critical factor in beef’s success in the marketplace – in  maintaining and growing beef demand in 2014 and 2015.

When consumers see value in a product, they have a higher willingness to pay for it. In fact, checkoff market research indicates that we have seen a cutback in at-home eatings of beef, particularly in roasts and some in steak. To put this in perspective, our loss of in-home servings per capita is somewhere in the range of 5 to 6 percent as of February.   Per person, that is a reduction of three to four beef servings per year; across the nation, that is close to a million fewer servings of beef eaten in-home. This coordinates closely to our low supply situation.

The number of meals in-home still exceeds the number of foodservice beef meals. It might be easy for us to forget, however, about the fact that people can really stretch beef in-home, especially ground beef, in spaghetti sauce, tacos, and other ingredient recipes.  Actual volume (as opposed to number of eatings or meals) remains more matched between in-home and foodservice. But the truth is, beef maintains such strength in foodservice that Technomic data indicate since 2009, beef represents the largest pound increase of any protein despite a shrinking supply.

You can start to see, then, that with reduced supply and record prices, a reduced number of in-home beef meals isn’t necessarily an issue. On the other hand (warning, a short trip down a garden path approaches), the shift toward foodservice itself is intriguing and invites further study. With higher prices, I had expected that consumers might shift meals away from foodservice and toward the in-home experience. But John Lundeen, the beef checkoff’s market research guru at NCBA, suggests that a few things are combining for our current situation:

  1. Consumers can still get relatively inexpensive but still very tasty burgers at foodservice.
  2. Millennials particularly like the quality guarantee they get at a restaurant. They may say to themselves, “Better to have a chef make that pricey steak than me.”
  3. The celebratory nature of beef fits the foodservice environment very nicely.
  4. Has to do with modern lifestyles and smaller households: Roasts often are not seen as a fit with a small household, for example. And we also see less steak consumption in single-person households.

So, we know lower available supplies mean declining consumption (please, please remember—consumption isn’t the same as demand). Recently in the media, I saw a story saying that chicken consumption had overtaken beef consumption for the first time in 100 years—of course, because these days we simply do not make as much beef as we have in the past. We cannot eat what we don’t make, so obviously we see beef consumption dropping. That said, the continued strength of beef demand throughout last year and until today surprised even the savviest of market analysts.

As Kansas State ag economist Glynn Tonsor pointed out recently in a Twitter discussion, the entire industry must continue to work together to align beef offerings closely with the desires of those consumers willing and able to buy them.  In the end, this is what supports continued demand strength. (Here’s a great blog on why internal food fights are senseless, which makes this point much better than I ever could.)

If you do not know how to ask the right question, you discover nothing. ~W. Edwards Deming

It is not necessary to change. Survival is not mandatory. ~W. Edwards Deming

Subsidies and Food Security

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I’ve been to Australia. (That’s me hiding behind the woman in the blue top. No really, it is!)

Before I went, I thought Montana was “big country.” Not that Montana isn’t (incredibly beautiful) big country, but Australia redefines the meaning.

This trip was yet another opportunity offered to me by the Eisenhower Fellowship program. (If you know an outstanding farmer or rancher between the ages of 35 and 45, please tell them about the program. It’s a fantastic opportunity.) Because of my Fellowship, the Nuffield International Farming Scholars Program invited me to come down under and participate in the annual Contemporary Scholars Conference, held in Sydney and Canberra this year.

Big ideas for agriculture in a big country.

Surrounded by about 60 outstanding young farmers from all over the world (The Netherlands, India, UK, Ireland, France, Brazil, China, Indonesia to name a few), the richness of discussion (as you can imagine) humbled me (and, truthfully, made me realize just how ethnocentric I may be—a very good thing for my worldview). Poverty and hunger, efficiency and stewardship, a definition of sustainability, all these topics came up for debate.

You (all 12 of you that read this blog! Thanks Dad!) may be subjected to the residual thoughts from this experience for quite a while. That’s a fair disclaimer, I think.

Have you ever had two concepts that you previously believed lived independent lives suddenly crash together in your brain and form a connection completely new to you? (No? Well, that’s bit awkward for me, then. Ah well. Not the first time.) In one of my first posts to this site, I named it the Shiver of Coalescence. Well, guess what?! Oops, it happened again.

The two concepts bouncing around my brain, now linked with a flexible thought-wire, are subsidies (how’s that for a loaded word?) and food security.

Prior to March 1, I knew very little about EU subsidies for agriculture, other than the offhanded, sardonic comments from others (who, in retrospect, frankly knew about as much the topic as I did). I learned a LOT (but not nearly all there is to know—it is, as they say, complicated) about the EU’s Common Agricultural Policy, a policy undergoing fairly significant change as we speak. Don’t worry, I’m not going to try to explain (or defend, or for that matter, attack) it in this space. Not only am I too ignorant, I’m also too cowardly.

Learning more about debate on CAP, listening to various farmers from various EU member countries, and other countries, and thinking about my own friends in the US, set me to wondering (a dangerous pass time I try only to engage in on Saturdays).

What is the role of farmer supports in global food security, availability, affordability?

Quite a few people in my acquaintance aggressively ascribe to free markets. My trouble is, every time I ask them what that means, I get a different answer. Since I’m a big fan of precise communication (insofar as it exists) I’ve often dug further, trying to understand the concept.

Some people believe disaster relief for farmers fits rationally into free market agriculture, while some say natural disasters and the chaos they cause are all part of a free market. These ideologically pure folks might argue that a system shock such as hurricane Katrina or the devastating blizzard in the Dakotas comes as a natural part of free markets and the elimination of farms and farmers due to those shocks is just part of doing business in a free market. Others would argue that this may cause citizens to lose livelihoods, or even to go hungry, and this would not be acceptable. While some say grazing on public lands constitutes price supports, some get really, really red in the face when they hear that (like I’m-afraid-they’re-going-to-have-a-stroke-red-in-the-face.) And so on. (And on.)

I believe every government has certain responsibilities for feeding its citizens. Among these: food security, availability, and (in countries blessed enough to think about it) affordability. These responsibilities demand attention to resilience in the food system, including environmental, social, and economic factors.

Food comes from farming. Farming is an inherently risky business.

So what is the responsibility of governments, and the responsibility of private individuals or corporations, to assure this resiliency in our global food system? Or, to bring it close to home, what responsibility do we have to feed people–in our hometown, in our country, in our world? What is the right balance between independent, free markets and food security and sustainability?

Even though I’ve always considered myself a free market devotee, I’ve recently begun to think that while this creed may work in widgets, feeding people—whether in the food deserts of the U.S. or on a global scale—just isn’t that simple.

But while they prate of economic laws, men and women are starving. We must lay hold of the fact that economic laws are not made by nature. They are made by human beings.” ~Franklin D. Roosevelt

“You can’t have a world where 50 percent of the people are dieting, and 50 percent of the people are starving, if you want stability.” ~John Shelby Spong

For those who have been reading this space all along (bless your hearts), here are some beautiful Australian mangoes at the vegetable market in Sydney. Very good. But…remember the mangoes I had in Taiwan? I do. Mmmmm.

Culture of Acceptance

Today, I finish up my thoughts on diversity on our boards, as I shared them with folks at the USDA session on board diversity Wednesday night.

the little country church in the dell.

Acceptance. Encouragement. Support. Inspiration.

These words may describe a perfect utopia of creativity and growth. And, I believe, they could describe our agricultural organizations.

I believe as agriculture we simply must get better at nurturing a culture of acceptance to improve our future. And we must discourage closed-mindedness and exclusion.

Many years ago, practically everyone had a farm in the family. Because of this, most people had a common language, based on common experiences that they shared.

Today, the face of farming and ranching differs quite a bit from the past. Particularly in western states, farm workers become farm owners. Women play an increasingly substantial role in agriculture due to increased opportunity—be that on-the-ground production or agricultural business. The face of our consumer is changing as well.

This means that for agriculture to stay relevant, we must foster acceptance. We must listen. We must encourage. We must support. We must inspire all types of people.
Particularly when thinking about the future of our Beef Board, we must do these things to ensure that we have future visionaries to lead our organization forward.

On our boards, and truly in agriculture in general, we could benefit becoming more open-minded to those who are different from us and have diverse viewpoints. We could embrace new ideas with added enthusiasm.

My experience says that lack of acceptance may be a challenge for our new members. They may find it difficult to break into already-formed groups of old friends and colleagues. If we actively try to reach out to others, and encourage them, we grow stronger as an organization.

“As we let our light shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence actually liberates others.” ~Marianne Williamson