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The article is divided into three sections:


Part I

Part II

The Changing Meat Industry: Implications for the Beef Sector and Cooperative Extension's Role

by DeeVon Bailey Chris Bastian
Terry F. Glover and Dale J. Menkhaus

July 1993

The authors wish to thank the following for their support of the publication of this position paper:

Farm Foundation
Utah State University Cooperative Extension Service
University of Wyoming Cooperative Extension Service

The authors also wish to thank Dr. Clement E. Ward for his review and comments.

This position paper was conceptualized through the Western Extension Marketing Committee.



Structural changes, as well as, changes in consumer demand have led to significant transformations in the meat industry. Firms in the feeding and meatpacking industries have become larger and/or fewer in numbers. Vertical integration and/or coordination has been the primary method used by processors to increase efficiency in livestock marketing channels. The result is that producers and/or handlers are acting more in tandem with processors. Thus, processors now have more control over at least a portion of the supply needed to operate processing plants efficiently and are better able to provide a broader variety of products demanded by consumers. These structural developments in the meat industry have brought about varying degrees of change for the various sectors, primarily poultry, pork and beef. Poultry and pork have moved, or are moving, rapidly in terms of product development and differentia-tion, service and genetics.

Changes in consumer demand brought about by health concerns and the need for convenience have led to tremendous changes which have likely provided the impetus for these structural transfor-mations. Beef has continued to lose market share at the retail meat counter to chicken, while the demand for pork seems to remain relatively stable. The beef industry needs to continue efforts in the areas of product development and advertising which address health and convenience issues. Biotechnology needs to address the issues relating to lower feed conversions and the production of leaner muscle tissue for beef.

Increasing beef exports is an important market strategy that may offer at least a partial short-run solution for U.S. beef producers to keep cattle numbers stabilized. However, this type of market will be much less stable than the domestic market and will face stiff competition from lower priced competitors such as Australia and Argentina.

More market coordination in the beef industry is needed and likely will evolve over time. An increased dependence on contrac-tual arrangements between firms within the beef marketing channel probably will be the means for achieving market coordination. The prospect of the cattle industry moving to a more coordinated system will have conse-quential impacts on where cattle are born, backgrounded and eventually fed. It is possible that processors could control supplies from birth through processing, with contracts or through ownership. A movement toward more market coordination in the meat industry suggests the traditional roles played by extension agents and specialists servicing this industry will be significantly altered, limited, or possibly eliminated. Consequently, the CES will need to redefine its role relating to producers and agribusi-nesses operating in an integrated system. This changing system, in many respects, is consumer driven and will evolve to facilitate communication from the consumer to the producer. Thus, understanding domestic and international consumers will be the basis for successful marketing in the future.

Extension can play an important role in moving the beef industry toward a marketing-orientation by facilitating communi-cation among the sectors within the industry. Finally, multidisciplinary extension efforts, involving extension production (animal and forage) scientists, nutritionists, food scientists, and economists may become more prevalent. Increased communica-tion among extension professionals in relevant disciplines is needed. Such activities can stimulate educational programming needed by beef industry participants to aid them in becoming more competitive in an ever increasingly complex industry and market environment.

Part I of the paper

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