Jim and Lorraine Peterson
f you look closely, you can see several similarities between Montana and South Korea. They are nearly equal in land size and grow some of the highest-quality beef in the world. Yet the state of Montana has a population of less than a million people, while South Korea boasts more than 50 million people—30 million of whom live in one town. Yet the biggest connection Jim Peterson sees is that in Korea, U.S. beef is very competitive in price with domestic South Korean beef.
It’s a thought that hasn’t escaped the Montana rancher’s mind. In fact, it’s front and center.
When Peterson is not on his Buffalo, Mont., ranch running a cow–calf, yearling and feeding operation or serving in the Montana legislature, he is working to improve the presence of U.S. proteins overseas. As chairman of the U.S. Meat Export Federation (USMEF) and with more than 30 years collectively in the U.S. cattle feeding, finance and political arenas, Peterson is careful to
remember who—and where—U.S. beef customers are.
"When you look at world consumers, Asia in particular, these people grew up on chicken and rice. As their economic situation improves, so does their taste for higher-quality protein," he says, after a three-week visit to China, Japan and South Korea with USMEF. "The opportunity for us is enormous and U.S. producers need to think about what these countries want."
By 2050, he says, the world population is expected to grow by 2.6 billion people—that’s like two Chinas, he explains. "If those forecasts are correct, we’ll have to increase food production by 100% in the next 40 years. If you look at it just from a beef side, that growth is three-fourths of all the beef production in the U.S. for 2009."
"The FAO estimates the rest of the world will increase beef consumption by 17% or 9 million metric tons by 2019, while the U.S. will only increase by 4.4% or 538,000 metric tons. Currently, the fastest-growing market domestically is exports—up 26% through July15, 2010. In Asia alone, Jan. 1 to July 15, 2010, exports were up 52%."
Peterson and USMEF officials met with Asian customers, retailers and food industry leaders.
Wherever they went, the people loved U.S. meat, he says. "But they all want to know the age of the animal, if it is safe, how and where it was raised and if it can be documented.
"We heard that everywhere, but as we came back to this political environment, that has all been melted down," he says, referring to the 2003 BSE discovery, the Secretary of Agriculture promising mandatory ID in the U.S. and the farm bill’s attempt to legislate country-of-origin labeling.
"Politics have overtaken common sense and the industry has become fractured. A portion of our industry feels very threatened by the idea of traceability, animal ID and age and source verification," he says.
"Then you have producers like me. I see it as a great asset. I sold a pen of steers just yesterday that had a $20 per head premium for source and age verification. That’s added value I’m creating for myself right here in Montana."
One industry, all together. Just as every credit card uses bar code technology, Peterson believes, the beef industry should build a common technology procedure that allow stakeholders at every level to play the same game. "My goal is to help develop a common information highway so that if you want to play this game—if you want to add source and age verification all the way into the Japan market, for example—there is a common information highway we can all plug into."
He is quick to point out that a mandate for animal ID or age and source verification is not his goal. "But if there is a uniform system in place, the people who want to add value to their product can do so. The ones who don’t want to don’t have to."
The system, he says, would allow all segments of the industry—from ear tag manufacturers, animal health companies, cattle producers, feeders and processors all the way to shippers—the ability to coordinate, communicate and deliver beef products to markets that want them.
"If we want to be able to add value and compete in the international marketplace, or for that matter domestically, with a source verified product, there ought to be a uniform system to do that. A uniform system right down the production line would add value to everyone, I believe."
The success of the beef industry in the next few years depends on how well all segments of the industry can work together, he adds.
A feeling of distrust between the different segments of our industry has plagued us, he says, as we are all competing against each due to the economic structure and marketing forces of our industry.
"But at the same time, you have to realize the ultimate goal here is to provide a high-quality, safe and predictable product for the consumer," Peterson says. "Of U.S. beef consumers, 95% live outside U.S. borders and only 5% live in the U.S. Who will meet the growing global demand? Will we be able to give the consumers what they want?" BT
Jim and Lorraine Peterson
- Original 5,000 acres purchased in 1988, plus additional leased acres
- 400-head cow–calf operation
- 500-head yearling and feedlot operation
- 11-year hay-grain-grazing rotation: seven to eight years in rotation grazing and hay production; two to three years in winter and spring wheat, barley and forage peas.
- Montana state senator and Senate majority leader
- Chairman of U.S. Meat Export Federation
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- September 2010