Bill Helming to Speak at Grassfed Exchange

The 2013 Grass Fed Exchange Conference, to be held in Bismarck, ND on August 20-22, will feature Bill Helming as one of our keynote speakers.  Bill has been forecasting U.S. and global macroeconomic trends for more than 40 years and is highly respected in the agricultural industry.  He was the first Chief Economist for the National Cattlemen’s Beef Association (NCBA) and the Founder and General Manager of “CattleFax”, a highly respected national database, market outlook, and research analysis organization.  Bill is now the Principle of Bill Helming Consulting Services, and as a farm and livestock economist, produces quarterly Ag Sector outlook reports titled, “As I See It”.    Bill recently authored a book on the U.S. economy titled, “What Goes Up Eventually Comes Down”. 

This week I sat down with Bill and talked with him about the current status of the U.S. Beef industry, developing economic trends, and his planned presentation at the Grass Fed Exchange Conference.  He shared some excerpts from his analysis of the protein sector, pointing out some basic beef fundamentals.  Bill stated that from the 1970’s to 2012, per capita beef consumption has declined almost 33% or 28 pounds per person.  According to his statistics, “If we look at 1970, ground beef made up 40% of all beef consumed.  In 2012, ground beef made up 58% of all beef consumed in the U.S.  That is a 45% increase in ground beef consumption by the consumer.  As a comparison, per capita chicken consumption has increased more than 126% over the same time period with each person consuming 45 pounds more chicken annually.  Chicken and ground beef are the only two proteins that have per capita increases over that time period.”  He went on to say that the primary reason consumers are purchasing more ground beef is because of price or affordability. 

Currently, 25% of all ground beef consumed in the U.S. comes from cull cows and bulls, 15% from imported trim, and the remaining 60% from fed cattle.  Bill stated that, “…the U.S. Beef Industry is a one trick pony and needs to do a much better job of paying attention to what consumers want”.  He said that the industry needs to be at least a “three trick pony”, developing distinct production and finishing models that more accurately reflect and meet consumer demand.  This would involve moving the industry in three or more directions.  The first would be moving the status quo feedlot industry towards exclusive production of high quality beef centered on the primal market.  Secondly, to take advantage of the fact that current feedlot capacity is averaging 60-65%, feeders could start finishing some cattle on high roughage rations using predominantly silages, Dried Distillers Grains (DDGs), Triticale, and similar feedstuffs, to a relatively lean endpoint and target the ground beef market with this lower cost product.  Third, producers could finish cattle exclusively on forages and stored forages to produce a 100% grass fed beef that targets both the consumer looking for a “differentiated beef product” and the consumer looking for affordable lean ground beef. 

Bill also said that the current USDA Beef Quality Grading system is severely outdated and has led our industry down the wrong path.  He said, “The current grading system has set the tone and rules for every animal going through the system and we need to let the market determine what type of beef we need to produce instead of blindly conforming to some artificial system”.  He went on to say that he will present the details of his “three trick pony” beef industry model at the upcoming Grass Fed Exchange Conference. 

I asked Bill about trends in cattle size and efficiency and he stated that the industry is still fixated on cattle that are predominantly frame score 6.0 or larger.  He stated that, “Today, 90% of all cattle going through the feedlot are a frame score of 6.0 or greater and have average Dry Matter (DM) conversions of 8.5 pounds of feed consumed per every 1.0 pound of gain.  However, for the 10% of cattle that are frame score 5.0 or less, Dry Matter conversions are averaging 5.0 pounds of feed consumed to 1.0 pound of gain”.  Bill pointed out that this one simple change in cattle selection could significantly lower the beef industry costs of gain (COG) and total cost of production (COP).  He said that, “Beef producers are famous for locking themselves into high costs of production and I will be quoting Kit Pharo often in my presentation”. 

In summary, I asked Bill why someone should attend the 2013 Grass Fed Exchange Annual Conference?  He stated that, “If you are in the beef production business and are interested in the future of that business, this will be a great opportunity to learn how the industry can move forward and how you can be not only a survivor, but a winner in the new, evolving beef industry”.  He cautioned that, “If the current industry stays on its course of one size fits all and one superhighway, and continues to ignore the consumer and their purchasing power, then the beef industry could go the way the lamb industry did years ago”. 

To hear more from Bill Helming, register for the 2013 Grass Fed Exchange Conference in Bismarck, ND on August 20-22 at www.grassfedexchange.com.  We will see you there!