A longtime beef producer chimes in on the changing industry
With cheaper corn, cattle prices at record highs and cattle numbers at record lows, nobody doubts the cattle industry is about to enter a rebuilding phase. That means lots of young breeding cattle are being eyed as replacements to become mamas that will be around, making or losing money, for years.
Consider the prices being asked for replacement cattle. This is not a decision to be taken lightly unless you believe in a future of forever high-priced calves and cheap corn.
That’s not what James Henderson of Memphis, Texas, sees. A lifelong student of the beef industry, Henderson expects a future of tougher intrasector competition and more intersector coordination in which everybody in the chain strives to enhance his or her own position by working better with others.
Henderson has worked with others in all facets of the business, and he has a bit of cautionary advice: There has never been so much change, so fast, in the beef industry. And it’s "only going to accelerate."
Price levels have changed, but so have consumers, packing procedures, retailers, auction markets and feed yard procurement policies and expectations. Today’s system is better able to differentiate, and reward or punish the "right" and "wrong" products. As the ability to differentiate strengthens, the rewards and punishments will continue to grow.
"It’s been an evolution, but if you look at the last 20-25 years, you can see how far we’ve come," Henderson says, having spent the last few years as a consultant. He’s helped people and companies, from cow-calf producers to some of the largest feeders, packers and retailers in the country, prepare for those changes.
Starting point. He says everybody should know more about how everybody else operates and be willing to adjust their own efforts to enhance the efforts of other sectors.
Looking back, Henderson realizes he was on the ground floor for the value-based revolution that has transformed the industry’s production and marketing practices.
A student and member of the meats judging team at Texas A&M University in 1975 when Dr. Gary Smith and his colleagues started thinking like W. Edwards Deming about the beef production chain, Henderson was among the students working nights dissecting carcasses so that producers, retailers and packers could finally measure some of the problems beef faced in the fast-changing marketplace.
Later, Henderson managed a group of Texas packing plants and a supply chain of plants in Uruguay, which processed jerky for import into the U.S. His efforts with processed meats introduced him to the Certified Angus Beef program, where he was instrumental in getting CAB to broaden its focus from fresh meats to licensing roast beef, corned beef and pastrami products.
It was Henderson’s expertise in managing packing plants that finally got him back in the cattle business.
Minnie Lou and Mary Lou Bradley (the future Mrs. Henderson) started B3R in 1986—the downside of that cattle cycle—seeking an outlet for beef from the family’s Bradley 3 Ranch near Memphis, Texas. They were beating the roads marketing natural beef from their registered Angus herd. That’s when they decided to build their own packing facility at nearby Childress, Texas. They hired Henderson to manage it in 1993.
- February 2014