Value of Trust

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I’m fulfilling an Eisenhower Fellowship with the goal of helping beef producers better understand the customer in Japan and Taiwan, especially with regard to the reputation of the product branded U.S. beef, and also specific branded products offering added value built on the foundation of company names and reputations.

Heads up: To my beef industry colleagues and to the beef producers who are my bosses, my friends or my industry partners, I’m about to tell you something uncomfortable.

I believe that it is better to tell the truth than a lie. And I believe it is better to know than to be ignorant. ~H. L. Mencken

Consumers in Asia don’t trust us.

(I know, some experienced international marketers will say that this is not a news flash.)

Now, deep breath. I can feel the hair on the back of your neck rising from all the way over here. I can hear you saying, “If they don’t trust us, then it’s their problem!” But truly, it is our challenge–and our opportunity. We have the responsibility to earn and maintain their trust–just like we have the chance every day to earn and maintain domestic consumer trust. And, like domestic consumers, if we lose trust, we lose on many fronts. Freedom to operate. Market share. Flexibility. Profit potential (would you rather throw tongues in a waste bin or sell them for $8/lb? Your choice).

At home, when I’ve mentioned earning consumer trust by fair dealing and honesty. Some people (who are, I believe, trying to help me) tell me:

  • I’m naive and I need to be less “Polly-anna” (pun intended);
  • Consumers should feel lucky they have food on the table;
  • Asian consumers should feel lucky they get American beef;
  • “They” could never understand what we do–and
  • Further, we don’t have to explain it to them because we’re the experts;
  • “They” should take what we give them (and furthermore, and “they” need to learn to cook)

Stubbornly (and I pray daily to the good Lord to save me from my stubborn self), I’m once again telling folks: I haven’t changed my mind. I still believe in the importance of transparency and fair dealing with our consumers. As a matter of fact, I believe it even more strongly after seeing more of the world outside U.S. borders.  I believe straightforward honesty built American agriculture. I believe that’s how most farmers and ranchers operate on a daily basis. I still believe that’s the foundation of America.

I’ve met with several large importers in both Japan and Taiwan–these are customers of the major and minor U.S. packers.The Eisenhower Fellowship gave me the opportunity to listen to the chairmen of these import companies. Powerful men, who run billion-dollar companies, who purchase nearly every pound of beef entering Asia–from the U.S. or elsewhere.

The importers I visited say that the cultural divide between West and East makes business dealings a bit harder–but certainly not impossible. What muddies the water now, they say, is the lack of trust. Trust in what we tell each other as we continue long-term relationships with partners here, or begin new business relationships. Trust in the safety of U.S. beef, and the care producers have for animals, land, quality and safety.

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Is it possible for us to build trust in Asian consumers? I believe it is.

I, for one, am not worried about what will happen here when we offer consumers a choice of beef produced in different ways (natural, organic, never-ever, use of various production technologies)–and label it (and price it) accordingly. In Taiwan, U.S. beef is known as the best quality available. Taiwanese (especially young people) crave it–they want to buy it, it’s the buzz on the streets. At a fantastic dinner the other night hosted by my new friend and Taiwan EF Fellow (see Food and Heart, I had some of the best Top Cap I’ve ever eaten, U.S. beef of course), one of our group literally said a cheer for U.S. beef right in the middle of a toast (they toast a LOT here in Taiwan!)–seriously, a cheer for you, my friends in beef. Made me proud. The beef produced in Taiwan cannot hold a sputtering candle stub to the quality, consistency and taste U.S. producers offer. But the discussion about U.S. beef is almost always followed by a “but” … is it safe?

Without trust as the foundation of our relationships, with companies, with consumers, there are no workable talking points. We, and our business partners at home and in country, have to trust each other to make it work. It takes two (as Pearl Bailey said) to tango.

Tell the truth. Offer choices. Build trust. Sell beef.

It’s really that simple. At home, and abroad.

PS. Allow me a small space here to talk about U.S. packing companies. Producers, feeders, like it or not, they are the ones that put a face on your product once it leaves your farm and feedlot. They tell your story around the world to your international customers–through their business reputation, their brands, their actions, their people, their words. Packers represent you to customer-facing businesses like importers, retailers and foodservice. In a global marketplace, your profitability lives and dies with their ability to sell your product for the best price, worldwide.

Random Photos of the Day:

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Chiang Kai-shek Memorial in Taipei. That’s a guard standing by, even though he looks like a tin soldier. The memorial statue is huge.

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This dragon snuggled up to me at a street festival. Here, kitty, kitty…

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With the Dean of Ag and key agriculture and forestry faculty at National Taiwan University. From left, YuanTay Shyu, Dean, College of Bioresources and Agriculture, Randy and your faithful scribe, Ming-Ju Chen, chairman, Department of Animal Science and Technology and Biing T. Guan, chairman, School of Forestry & Resource Conservation.

 

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Sweet Serendipity

IMG_0790[1]Serendipity:

When you’re headed for an Agricultural Research Station, and find yourself in a town named Ever Spring (Hengchun), holding a juicy, perfectly ripe mango, standing on a stunningly beautiful tropical beach.

After all, what should I call it? Blessing. Fate. Karma. Never coincidence.

We headed south from Koahsiung, on our way to the Hengchun Agricultural Research Station. On the way out, we passed Wang’s Steakhouse (I kid you not, I suffered irrational chortle fits for 30 miles thinking about it) and two hours later, we arrived at the station, where they have some cattle, and a lot of goats. Truth is, they do fewer bovine research projects in Taiwan than they used to. Researchers Dr. James and Mr. Simon trained in Texas for a while, and now dedicate time to researching a short list of beef breeds in Taiwan, and preserving the native Taiwan Yellow beef breed for traditional dishes like hot pots and meat balls (ask me about the meat balls we had for supper last night sometime, or better yet, ask Randy). As I mentioned before, Taiwan folk eat quite a bit of pork and goat, and depend on imports to satisfy a rapidly growing hunger for beef. That’s serendipity too, for U.S. producers.

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They don’t look addicting, do they? I wish you could smell the sweet fragrance.

Our visit to another (much larger) Holstein feedlot proved fascinating.

But…
Honestly, I’m not sure the feedlot was quite as fascinating as seeing mangoes, bananas, pineapple and sweet apples on the tree, simply because that was all new to me. Especially the part where each luscious mango and beautiful banana bunch hides beneath a lovingly applied paper wrapper while finishing the ripening process–to protect the precious fruit from sun and insects. After harvest by hand, farmers place each mango in a mesh foam wrapper and stack them carefully for transport.

(Can you visualize me at this moment, trying to keep the mango juice running off my chin from dripping to my keyboard as I type? I’ve never tasted fruit like this. I’m totally addicted. I’m not alone, they’ve loved ’em in India for thousands of years, too. I think I will experience withdrawal when I get back to the States. Maybe my friend William at the Mango Board can hook me up. I hear they worship mangos in Key West…can they possibly grow them like this in Margaritaville?)

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Sleep tight, sweet mango, until you are perfectly ripe.

But I digress.

Thank you, thank you James and Simon. For the magnificent mangoes.Sigh.

…Oh, and for the wonderful information about agriculture in Taiwan, translating the technical stuff at the feedlot and your kindness. Here are some feedlot photos–mostly about the ration, because it was a great lesson in using what feedstuffs you have available to produce nutritious beef.

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Cassava byproducts, processed into pellets, fed to the steiners at the Sung Sing feedlot. What is cassava, you may ask? Cassava is an edible, woody shrub that is a dietary staple to nourish tropical Africa. Nearly every person in Africa eats around 80 kilograms of cassava per year. About 37% of dietary energy there comes from cassava. If prepared incorrectly, the cassava plant can produce cyanide, a deadly compound when consumed. Rich in rich in carbohydrates, calcium, vitamins B and C, and essential minerals, Americans may know it better as tapioca.

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The Sung Sing lot (certified by Taiwan Good Ag Practice or TGAF) feeds 15 metric tons of chopped fresh Napier grass and 40 metric tons of wet distiller’s every day.

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Soy sauce meal, a byproduct of soy sauce production, pressed into wafers at the manufacturer and sold as feed. The owner told me this provides potassium supplementation as well. Other feedstuffs in the ration include Pangola grass, soybean hulls, barley straw, and wet distillers’ grains, both corn and sorghum.

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Clean, modern feeding facility for older calves. Baby calves are housed in a climate controlled facility using “wet pads”–a sort of evaporative cooling system–to help combat heat stress.

 

Random photo of the day:

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Midnight snack, Taiwan style: Seaweed Sun Bites and a Taiwan Beer while watching Manny Ramirez play ball on TV.

Though Mountains Divide and Oceans Are Wide

I know the small world of agriculture in the U.S. resembles a family, with everyone seemingly linked by only two or three degrees of separation.

I didn’t know that intimacy applies all over the world.

The great folks at the American Institute in Taiwan took some time to visit with me yesterday. Basically, AIT is the American embassy in Taiwan. Why, you may ask, (I did) don’t we call it the American embassy in Taiwan, if that’s what it is? Welcome to the wide, wide world of diplomatic relations.

The American Institute in Taiwan (AIT) is a non-profit, private corporation established shortly after the United States Government changed its diplomatic recognition from Taipei to Beijing on January 1, 1979. The Taiwan Relations Act (PL 96-8) of April 10, 1979, authorized the continuation of “commercial, cultural and other relations between the people of the United States and the people on Taiwan.” It also provided that “any programs, transactions, or other relations conducted or carried out by the President or any Agency of the United States Government with respect to Taiwan shall, in the manner and to the extent directed by the President, be conducted and carried out by or through the American Institute in Taiwan.” The Department of State, through a contract with the Institute, provides a large part of AIT’s funding and guidance in its operations. Congress, in passing the Taiwan Relations Act, also assumed an oversight role with respect to the Institute’s operations. If you want to read more like this (I plagiarized this shamelessly–could you tell?), please visit AIT’s Website or do some additional research on China-Taiwan-U.S. relations. It’s frankly a fascinating topic, especially for history addicts.

While receiving a thorough briefing from AIT, I had the honor to meet the AIT Director Christopher Marut, a foreign service diplomat with extensive experience in U.S.-Asia relations. He is, basically, the U.S. ambassador to Taiwan (see above). He stopped by for a few minutes and our conversation centered on what consumers want in Taiwan, and if there are lessons here for marketing beef to U.S. consumers. We agreed that in some ways, Asian consumers light the path for marketing to U.S. consumers, with demands for transparency in production methods and safety procedures as well as convenience and attractive packaging trends.

Mr. Marut’s agriculture staff proved equally knowledgeable, making for an extremely productive meeting overall.

Why did this experience teach me about how small the world is? Emily Scott, AIT’s deputy chief of the agricultural sector, graduated from Colorado State University. And, like me, she has Dr. Tom Field to thank for a great education–he was her undergraduate adviser in the Animal Sciences program, and my master’s adviser as well. (Tom, does this mean you’re getting old?)

Taiwan depends on imported food. They currently have a 32 percent self-sufficiency rate for ag products. While the government works daily to increase that, it may never be much higher, due to challenges including limited arable land and urban encroachment. Agriculture makes up about 2 percent of Taiwan’s GDP and roughly 5 percent of the working population. Taiwan has a globally competitive manufacturing and tech sector and, with a land mass the size of Maryland and Delaware combined, is the sixteenth most densely populated country in the world. Since 2010, Taiwan’s population grew less than 0.2% and the fertility rate stands at 0.9, which is the lowest rate ever recorded here. Government estimates say the population will reach a maximum roughly 23.4 million between 2020 and 2025. Even with population expected to shrink in the future, the country will always depend on imported food for its people. It’s a win-win that we enjoy a booming trade relationship with Taiwan–the U.S. is Taiwan’s third largest export market for goods.

However, with this in mind, it may be especially difficult for the Taiwanese people to separate the issue of food self-sufficiency from food security. While any country strives for food self-sufficiency, in a country like Taiwan, food security may depend more on relationships with other countries than it does on local agricultural production–particularly in nutrient dense beef, which in Taiwan is really only a byproduct of dairy production.We all know that in a global economy, relationships matter–in Taiwan, that wisdom takes on critical meaning to the people.

I heard a lot from both AIT and the National Animal Industry Foundation folks about the situation regarding beef access and its relationship to local pork production and access issues. (A politically charged topic not for this time and place, but buy me a beer, or better yet, some sake, sometime and we’ll discuss it.)

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Thanks to the National Animal Industry Foundation for a productive meeting about Taiwan agricultural production. To my right, CEO Michael Chung-Ginn Lee and his staff.

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The Eisenhower Fellows of Taiwan (An extremely active and wonderful group! And I got my very own sign!) hosted supper last night and I heard (mainly from Mr. Sean Lee, an Eisenhower Fellow who hangs out with some crazy U.S. beef addicts who once ate three, 32-ounce monster steaks in a sitting! Hope I get to see this power eating in action while I’m here, I may find a new spokesman for U.S. producers!) how much Taiwan loves U.S. beef. Truth is, in three days here I have already heard that over and over. We have a committed market for our products over here, even if the access road challenges us sometimes. Heartfelt thanks to EF Association in ROC Chairman Mr. Shui-teh Hsu for hosting supper. At 82 years young, he had a long and distinguished career in public service, and now dedicates some of his time to Eisenhower Fellowships (when he’s not advising world leaders and winning at golf, that is!).

One more thing…

Meat Consumption in China and US

As you can imagine, Avian Flu concerns Taiwan greatly. Farmers produce quite a bit of poultry here (by “quite a bit” I mean about 355 million broilers a year), and in China (China’s population leads the world in meat consumption and while pork leads the way, poultry consumption grows annually). The H7N9 strain appears not only one of the most contagious, but also the most lethal to humans, ever. (Honest admission: Those who know me remember that my son underwent a life threatening infection in January. It wasn’t related to Avian Flu, of course, but since then I cannot wash my hands frequently enough, and I’m probably thinking about H7N9 more than I should now.) With H7N9 in China, you can imagine just how seriously the government of Taiwan takes the responsibility of detection and control here–as evidenced by an experience I had in the Taipei airport. There, all arriving passengers are screened for fever by an electronic heat monitoring system. Passengers walk toward a monitor, which shows elevated temperature as a red halo around the body image on-screen. I asked what would happen if a passenger appeared with a fever and they told me that they would be examined by a doctor and possibly quarantined for a week. (Geez, that would have cramped my Fellowship style! Is it just me, or did it suddenly get warm in here?)

 

Dive Deep, Swim Far

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The flag of Taiwan carries a natural element–the sun. This drew my attention from the moment we entered Taipei.

Because I found the Japanese people’s connection to the natural world fascinating (and refreshing), the meaning of this stylistic sun interested me. Turns out, each of the 12 points on the star represents a month of the year.

The colors on the flag represent the Three Principles of the People–an important concept in Taiwan’s history. Blue represents democracy. Red, nationalism. And white, the star, which we’ve already linked to the months of the year (an indirect reference to seasons?), represents the people’s livelihood.

The Three Principles of the People, a.k.a. The Three Great Principles, originated with the political ideology of Chinese Nationalist leader Sun Yat-sen. The fact that the flag links socialism with the year and the people’s livelihood is interesting to me, but probably a topic for someone smarter.

(Warning: editorial comment: If you are reading this and you live in the U.S., you may think you know what socialism is, but I submit that we’ve thrown the word around pretty liberally in the past few years. It is a simple, objective concept really. In the U.S., for example, the concept of public lands, public resources like libraries and museums, and certain roads and highways, have roots in socialism. While I am a capitalist, I thank goodness for the tenants of socialism when I drive, read or hike. My apologies to readers who are now scratching their heads wondering why I’m wasting space on this.)

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If you go to the Web site for Taiwan’s Council of Agriculture, located under the Executive Yuan, and click on agricultural products, you’ll see them arranged by season. Anyone who has been patient and forgiving enough to follow my blog so far may see the immediate connection I saw. A government Web site organized by agricultural and natural seasons? Reminds me of Japan! Or Japan reminds me of Taiwan! (It’s all in your POV, right?) Kumquat and jujube join this list of key agricultural products. (I don’t think I’ve ever eaten a kumquat, but the word makes me giggle. I’m certain that I’ve never had a jujube, but I found several waiting in my room, thanks to Davis Wu at USMEF Taiwan. Davis put lots of fruit and snacks in my room! Now that I’m writing this blog and adding photos, I know what the heck those little furry fruits on a stem are! They are so cute! Now, do I peel it like a kiwi, or…?)

Taiwan’s population currently rests at about 23.3 million. In comparison, Tokyo’s metro area boasts about 35 million, when you count it all together. GDP in Taiwan is $902 billion US. The official language is Mandarin Chinese (I can tell the difference between Japanese and Mandarin now that my ear seems tuned to it. I don’t know if I’ll be able to say this six months from now, but for now, the two sound very different to me, with Mandarin sounding much more guttural.)

Taiwan’s political system does not fit traditional models. The President of Taiwan leads the government as head of state, followed by the vice president–both positions must get the popular vote to serve, in elections held every four years. This sounds familiar, but from there it differs significantly. The President appoints his cabinet including a premier; the premier heads the Executive Yuan.  A Legislative Yuan also exists, with 113 seats. The President appoints the premier without needing approval by the Legislative Yuan, and the legislature can pass laws without regard for the President, as neither the President or the premier have veto power. Thus, negotiation between the two branches might not happen if the two are of opposing parties. Other yuan include judicial, control and examination.

I’m set to begin meetings on Monday–today I will tour the National Palace Museum, which holds many of China’s national treasures and the largest and finest collection of Chinese art in the world. The core of the art collection once formed the imperial collection in Beijing. The museum also holds a collection of Buddhist artifacts inherited from the Forbidden City. In fact, the vast collection requires constant rotation for public viewing. I heard last night the museum will be moved to a new, larger location in the future.

“Be not the slave of your own past … plunge into the sublime seas, dive deep, and swim far, so you shall come back with self-respect, with new power, with an advanced experience, that shall explain and overlook the old.” ~ Ralph Waldo Emerson

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Thank you Davis and MEF for the beautiful flowers upon arrival–and all the goodies, too!

 

Why the World Matters: A Rant

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I’m headed to Taiwan on Saturday for the last two weeks of my Eisenhower Fellowship experience. I’ve been blessed thus far by timing (UTM rule in February for Japan, export growth to Taiwan) and relationships (the EF network and the generous assistance of U.S. Meat Export Federation (USMEF).

I’ve had some questions about why I chose Japan and Taiwan for my Fellowship trip. USMEF reports that U.S. exports to Taiwan already show strong recovery in 2013, rebounding after a setback over beta agonist use in 2011 and 2012. Taiwan set an MRL (maximum residue limit) in September, 2012 for both domestic and imported beef, and that set this market up for growth. Through February exports to Taiwan were 16 percent higher than a year ago in volume (5,708 metric tons) and up nearly 40 percent in value ($42.6 million). This is the fastest pace ever for beef export value to Taiwan.

Beef Exports to Taiwan Showing Strong Recovery in 2013

Take the UTM (under thirty month) rule for Japan and the clear potential in Taiwan together, and, (because this is my blog and I can say what I want to), I offer you this: If you’re in the beef industry, and you don’t see the potential for increased profitability in U.S. producer pockets in these two countries, and indeed in international markets as a whole, I highly recommend an eye exam. U.S. producers have much to offer consumers around the globe.

For example, many Japanese consumers prefer higher quality domestic beef but I’m hearing experts (packers, importers, distributors, retailers, foodservice) recognize a definite gap in products available to Japanese consumers–and many want the U.S. to fill that gap. The gap nestles in below domestic product and above product we successfully provide to Japan for Gyudon rice bowls (short plate, for example). The gap includes valuable U.S. middle meats from the upper two-thirds Choice and Prime categories. Frankly, the Aussies may not be able to fill the gap effectively, because 1) even their long-fed beef is more unpredictable quality-wise than our branded programs with specs for quality grade in upper two-thirds Choice and Prime, and 2) they can’t meet Japanese demand for specific cuts in quantity. We have a wide open playing field here, should U.S. companies and producers choose to rise to the challenge.

Yes, international markets may fluctuate with trade access issues (there’s a slight chance of rain on a weekend you plan a camping trip–does this mean you give up and never plan a camping trip?!). Yes, our domestic consumers eat most of what we make and we cannot ignore them (Huge kudos to our checkoff contractors National Cattlemen’s Beef Association, American National CattleWomen, National Livestock Association and North American Meat Association. They do an excellent job of keeping our domestic marketing based on research, fresh, lively and effective.)

However, I strongly encourage U.S. producers to take a longer term view of our supply and demand situation, and our active role in beef demand. I’ve heard time and again how producers are price takers, not price makers (said with an enormous sigh when discussing prices, usually). I frankly get a little frustrated by this statement. Unless you’re an economist and you’re explaining market basics in a lecture, saying we are “price takers”  seems an excuse for lackadaisical behavior–a reason to sit back, take what’s given and ignore (or even argue against the checkoff’s stellar work on behalf of beef producers!) opportunities to increase our potential for profit. While we have a product shortage in the U.S. now, that won’t always be so–growing international markets means the industry could support increased production while maintaining a decent price for all segments of the industry as our supply grows.

“If you reject the food, ignore the customs, fear the religion and avoid the people, you might better stay at home.” ~ James A. Michener

The trick remains our ability to put aside our own opinions, desires, and frames of reference, and see each market as a separate culture, people and environment for our offerings. Our ability to understand consumers in other places as completely different from U.S. consumers, with different needs, will allow us to differentiate products, target effectively, and realize continued (and increased) success around the world.

Random Photo of the Day:

beer in vending machine

Yes, Randy, that’s beer in a vending machine. Vending machines are everywhere!

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We’ve had a little sake since we arrived! This one was really yummy. Think I can find it in the States, since I can’t read the label?

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Representing the beef checkoff in my vest at the Waygu feedlot.