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Beef industry stands strong in light of general economy

Fri, May 2nd, 2003
Posted in Features

According to the 2002 Minnesota Agricultural Statistics, Fillmore County ranks fifth state-wide in the number of cattle and first in the number of beef cows. Photo by Juliann Mueller

"Packers like farm raised finished cattle," notes Joe Nelson, owner of Lanesboro Sales Commission.

Nelson says the producers in the area have paid attention to their genetics, purchasing good quality bulls that help upgrade their herds.

This attention to quality by local cattle producers is what has kept nine packers coming back every Wednesday to Lanesboro, some traveling as far as Michigan and Nebraska, to fill up their trailers. And what do the producers get in return?

"Consistency," says Nelson. “Producers know that when they bring in, say, five head this week and get a good price, they know that next week won’t come with any bad surprises.”

Nelson understands that a farmer has to deal with a lot of inconsistencies in his job, with Mother Nature and the government bureaucracy affecting the bottom line. So, Nelson knows that when the local sales barn provides a steady market for cattle, that’s a big victory for the farmer.

There are four grade categories an animal can fall into: prime, choice, select, and standard. Nelson has seen a growing trend in producers bringing in cattle that fall into the select and choice categories. Current prices range from $72-76 per hundred weight for select, $78-81 for choice and $80-83 for prime beef. A 1,200-pound steer will dress out somewhere between 700 and 800 lbs. depending on its grade.

"The market is strong,” Nelson believes. Last year, more than 100,000 head ran over the scales in Lanesboro.

The sales barn has been in business for 56 years with Nelson taking on ownership six years ago. Clifford Moger has been with the barn all of those 56 years. Freddy Frickson, the auctioneer, has spent more than 30 years helping packers meet sellers. And a strong staff keeps all those bidding numbers, weights, packers, and sellers in order. Wednesday is a busy day at the office.

Though the U.S has less than 10% of the world’s cattle, America produces nearly 25% of the world’s beef supply. Japan, Mexico, Canada and the Republic of South Korea are primary U.S. beef export markets. The amount of imported beef has fallen in the last year, which is good news for local cattlemen.

Nelson said that he has been watching the Country of Origin Labeling (COOL) law, which was included in the 2002 Farm Bill. If implemented, consumers would be able to look at packaged meat and know where it came from. The clothing industry has already jump-started this practice with the "Made in America" label.

There is also the possibility that in the future the consumer would be able to source the beef they buy all the way back to the producer. The fact that the consumer would actually know where their beef came from could be a plus for American producers and could help build confidence between producer and consumer.

Where does Fillmore County fit in all of this?

"There are 96,729 animal units of beef in Fillmore County. Of the 1,586 registered sites, 1,225 of these are beef related," stated Michael P. Frauenkron, Fillmore County’s Feedlot Officer.

According to the 2002 Minnesota Agriculture Statistics published by the Minnesota Department of Agriculture, Fillmore County is ranked fifth in number of cattle in the state and first in the number of beef cows.

Some sites only raise a few head, which help fill freezers or are part of a 4-H project. Other farms rely heavily on the income beef cattle generates.

The Minnesota Beef Council reports that the demand for beef is steady, with an increase of 3% since 2000.

Ron Eustice, Executive Director of the MN Beef Council notes that the consumer demand for beef is greatly aided by the industry’s efforts to produce a healthy product. The beef check-off, a $1 per head mandatory assessment on the sale of bovine animals for information, research and promotion, has helped the industry keep pace with the consumer’s busy schedule. New consumer-friendly products, that are fully cooked and easily warmed up in the microwave, have added to the public dinner menu.

Ground beef accounts for 63% of all fresh beef served at home. Eight out of ten households serve beef just under two times per week, and 40% of the sandwiches served in restaurants are burgers. Beef is consumed 77.8 million times each day across America and is the number one food source for protein.

What’s the outlook . . ?

The ‘Western Livestock Reporter’, a Billings, Montana newspaper, watches the cattle market extensively. Pat Goggins, its editor and an accomplished rancher, says the future looks good for cattle producers. Goggins notes that beef imports are down; average weight per head is down, meaning that animals are going to market sooner; cattle in feedlots are down; the nation’s cow herd is down; and the demand for beef is up.

His son, John, sees a large build-up of the country’s cow herds in the next three to four years, stating that recent rains have helped their industry immensely. He believes that the bottom line is that packers are going to be looking for cattle.

Which brings us all the way back to Joel Nelson at the Lanesboro Sales Barn, which is in the business of introducing local farmers to cattle buyers.

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