Fall 2017 Directions

N AT I O N A L

CATTLEMEN

The trusted leader and definitive voice of the beef industry

THE OFFICIAL PUBLICATION OF NCBA • 2017

NCBA.org

2017 DIRECTIONS State of the Association Report CattleFax Top 25 Industry Lists Legislative Outlook

Table of Contents LE T TER FRO M TH E PR E S I D E NT ..... Page 4

N A T I O N A L

CATTLEMEN

LE T TER FRO M TH E CEO .......................Page 6 STATE O F N CBA ............................................ Page 8 U PDATE O N P O LICY ............................... Page 20 U PDATE O N TR AD E ..................................Page 26 U PDATE O N TH E MAR K E T ................ Page 30 DI R EC TIO N S STATISTI C S .................. Page 36 STATE O F TH E FE D E R ATIO N ........ Page 60 B E E FITSWHATS FO R D I N N E R U PDATE........................................... Page 71

THE OFFICIAL PUBLICATION OF NCBA President Craig Uden President-elect Kevin Kester Vice President Jennifer Houston Federation Division Chair Jerry Effertz Federation Division Vice-Chair Dawn Caldwell Policy Division Chair Joe Guild Policy Division Vice-Chair Jerry Bohn Immediate Past President Tracy Brunner Kendal Frazier Chief Executive Officer Senior Editor Associate Editors

Contributing Writers

John Robinson Brittany Schaneman Charmayne Hefley Craig Uden Walt Barnhart Todd Johnson Ed Frank Max Moncaster

Creative Director Don Waite Graphic Designer Sharon Murano For ad sales, contact Jill DeLucero or Beka Wall at 303-694-0305, or Nicole Bechtel at 503-756-1538.

Contact NCBA: 9110 E. Nichols Ave., Suite 300, Centennial, CO 80112 (303-694-0305); Washington D.C.: 1275 Pennsylvania Ave. N.W., Suite 801, Washington, D.C. 20004 (202-347-0228). National Cattlemen’s Beef Association reserves the right to refuse advertising in any of its publications. National Cattlemen’s Beef Association does not accept political advertising in any of its publications.

National Cattlemen’s Beef Association does not accept any advertising promoting third-party lawsuits that have not been endorsed by the board of directors. © 2017 National Cattlemen’s Beef Association. All rights reserved. The contents of this magazine may not be reproduced by any means, in whole or part, without the prior written consent of the National Cattlemen’s Beef Association.

Keep up with the latest news

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NATIONAL CATTLEMEN

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Craig Uden NCBA President Nebraska

Tracy Brunner NCBA Past President Kansas

Kevin Kester NCBA President-elect California

Jerry Effertz NCBA Federation Chair North Dakota

Dawn Caldwell NCBA Federation Vice-Chair Nebraska

Jennifer Houston NCBA Vice President Tennessee

Kendal Frazier NCBA CEO Colorado

NCBA Offices DENVER OFFICE 9110 E. Nichols Ave. Suite 300 Centennial, CO 80112 303-694-0305

Marty Smith NCBA Treasurer Florida 2

NATIONAL CATTLEMEN

Joe Guild NCBA Policy Chair Nevada

Jerry Bohn NCBA Policy Vice-Chair Kansas

WASHINGTON D.C. OFFICE 1275 Pennsylvania Ave. N.W. Suite 801 Washington, D.C. 20004 202-347-0228

DIRECTIONS 2017

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ATION INFORM T PACKE

Serving the beef industry has always been important to me. Giving time and energy back to the men and women, businesses and the communities that have provided for my family and those around me, gives me a great deal of satisfaction. I’ve been extremely honored to serve this association and the beef industry as NCBA president for the past seven months. The opportunity to meet so many members across the nation and tour their operations has been a life changing experience for me, so thank you for the opportunity to serve each of you.

LETTER FROM THE

PR E SI DE NT

Craig Uden NCBA President

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NATIONAL CATTLEMEN

It has been a busy year and I’m proud of the work we’ve accomplished in a short time. Playing offense is a term we’ve used a lot since the start of 2017, and I’m fortunate to be serving as a volunteer during a time when agriculture is working with an administration that understands our needs and concerns, and has made a dedicated effort to relieve the burdens on rural America. Those days won’t last forever, and we cannot afford to become complacent because the mid-term elections are just around the corner. We have less than a year before we’re faced with the possibility of political change. We must take this time to press every possible issue and opportunity while we have possession of the ball.

We also need to be certain that we’re strengthening our relationships and building our NCBA and state cattlemen’s association numbers now, while the political winds are blowing our way. It’s easy to set aside that membership letter for later. It’s too easy to click past the request to join, but we need each of you to step up and support the work our industry associations are completing on our behalf. Without your voice and your membership support, NCBA and our state associations are at a disadvantage when fighting for the issues that matter most to our way of life.

In my case, NCBA and Nebraska Cattlemen have ambitious plans for the future and even modest success on their part means a great deal to the future of our business. I’d bet that the same applies to each of you and the work your state associations have undertaken on your behalf. Please take a moment to support NCBA and your state cattlemen’s association and join today. If you’re already a member of both organizations, I’d like to say thank you and encourage you to recruit a friend and neighbor to join us in our work.

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ALLIED INDUSTRY DIRECTORY These are companies that have teamed with NCBA as allied industry members, demonstrating their commitment to the beef industry. Their involvement strengthens our future. NCBA members are urged to support these partners in turn by purchasing their products and services. Those who would like to become allied industry partners with NCBA (securing a premium booth placement at the next annual convention and trade show), please call the Association Marketing team at 303-694-0305.

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Norbrook, Inc.

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R&R Machine Works RFD-TV Ridley Block Operations Roper/Stetson/Tin Haul Apparel and Footware Roto-Mix Stone Manufacturing Summit Livestock Facilities Superior Livestock Tarter Farm and Ranch Equipment The Vit-E-Men Co. Inc./ Life Products Tru-Test Group U.S. Premium Beef Verdesian Life Sciences Vermeer Vitalix Wilson Trailer Company Zinpro Performance Minerals

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Albertsons® Companies

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Performance Food Group

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Preferred Beef Group

Beef Products Inc.

JBS

National Beef Packing

Tyson Fresh Meats

Cargill Meat Solutions

Kane Beef Processors

Omaha Steaks

Wendy’s International

NATIONAL CATTLEMEN

DIRECTIONS 2017

Fall marks a special time of the year for agriculture.

The changing of the seasons brings harvest, weaning and preparations for winter. It’s also a good time for reflection on the months that are behind us as we plan for what’s ahead. The Fall issue of Directions represents much of the same for NCBA. This year’s edition features an in-depth review of the work conducted by our member-driven policy division as well as a review of the work we’ve conducted as a contractor to the Beef Checkoff Program. It also provides insight into the markets and the landscape for beef trade, which is becoming an increasingly important economic driver of our industry.

LETTER FROM THE

CEO

Kendal Frazier NCBA CEO

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NATIONAL CATTLEMEN

This edition also includes the popular “Directions Statistics” section which provides a look at the top operations in each segment of our industry, along with market statistics to help you identify trends and potential opportunities within the beef business.

As you are planning the future of your operation, we’re doing the same at NCBA. To make decisions and position the organization to continue serving our members and the industry, we’re constantly evaluating the changing landscape of this business to identify opportunity. In this issue, we’ve outlined some of our plans for the future and we’ll continue to update our members each month in our member newspaper National Cattlemen.

Fall is also a time when we gather with family in this business. Over the past several years I’ve observed an increasing number of young beef producers stepping back into this business and I believe that’s a sign that we, as an industry and a community, are on the correct path. It wasn’t long ago that young producers were few and far between, but now they’re finding new opportunities and many have a chance to return to their family operations, a fact that should encourage us all. So, as we gather for Fall work, family meals and the holidays, I can honestly say we have much for which to be thankful.

From all of us at NCBA, I’d like to extend a sincere and heartfelt “Thank You,” to each of you for your ongoing support of the association over the years.

Whether you’re a member, sponsor or stakeholder, your support makes a difference and we couldn’t accomplish our goals if you weren’t standing with us each day. Thank you for all you do to make this business and this association great every day.

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STATE O F N C BA A Year of Major Milestones

By Ke n d a l F ra z i e r NCBA CEO

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NATIONAL CATTLEMEN

The beef industry has experienced major changes in recent years and that trend has continued in 2017.

Although cattle markets aren’t where we’d like them to be as we head into fall, we have seen a positive trend in the policy arena under the new administration of President Donald Trump and we’re on offense for the first time in quite a while. At NCBA, we’re confident that as the domestic and international economy continues to expand, beef demand will remain strong.

At NCBA, we’re very pleased with the policy work that has been accomplished in our nation’s capital. We know our members join the association, in large part, because of our staff in Washington, D.C., and we’ve continued to expand that staff at the direction and because of the ongoing support of our members across the nation.

Because of member support, we’ve accomplished a great deal over the past nine months and we expect to continue building on those wins for some time to come.

You can see the details of our victories starting on page 20. But we’re particularly proud of the fact that we have been able to regain access for American beef to the important Chinese marketplace.

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STATE OF NCBA On a more positive note, NCBA was successful in pushing to roll back the damaging and costly “Waters of the United States” or WOTUS regulations, put forward by the Obama Administration and we’re confident there will be a replacement coming that will work for American agriculture.

The trade front has been dynamic and challenging for our industry during 2017 and it’s a trend we expect to continue during the year ahead. We had expended vast amounts of time and energy to help promote the Trans-Pacific Partnership (TPP) last year. As you know, President Trump withdrew from TPP in the early days of his term, leaving U.S. cattlemen and women without a long-term solution for beef exports to many important trading partners, including Japan. Likewise, a renegotiation of the North American Free Trade Agreement and ongoing conversations about the KoreaUnited States FTA are also occurring. We will provide more details on page 28, but we continue to monitor and engage the highly fluid trade environment each day on behalf of the industry.

www.NCBA.org

During the early days of the Trump Administration we worked closely with government agencies to repeal the Bureau of Land Management’s costly Planning 2.0 regulations. We were also successful in encouraging the delay of new and unworkable GIPSA regulations that would have created a nightmare for cattlemen and women and opened the door to costly and unnecessary Continued on page 12

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STATE OF NCBA Continued from page 9

lawsuits. Since the start of the year, we’ve accomplished a great deal and it wouldn’t have been possible without the support and strength of NCBA members, state partners and the ongoing engagement in the organization’s grassroots policy process which guides our work.

We celebrated some of these early wins during a record-breaking Cattle Industry Convention in Nashville, Tenn., this year. For those of you who were not in attendance, it was truly a highlight of the year for many who participated. With outstanding educational opportunities, world-class entertainment and the opportunity to participate in the all-important policy

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process, we’d strongly encourage you to join us in 2018, when we travel to Phoenix, Ariz., for another great event.

The Policy Process The work we do on behalf of NCBA members and the industry, starts with three important guideposts that are crucial to NCBA. The first is our policy book which is updated each year, starting in Phoenix for 2018. It is constantly evolving and changing to support the vision of NCBA members across the nation. As our business changes, so too does our policy on countless topics. It’s up to our members, state cattlemen’s affiliates and our volunteer leaders to shape the policy that guides our work. That document is augmented and supported by the NCBA strategic plan. Lastly, the Beef Industry LongRange Plan, aligns NCBA and the broader beef industry toward a common set of goals and establishes direction for the future. Together, these three documents drive our plan of work and allow us to move forward on a plan of work which ensures a vibrant future for beef.

NCBA’s policy process begins with ideas put forward at local cattlemen’s meetings and those ideas pass through state cattlemen’s associations to NCBA policy committees before being voted upon by the NCBA Board of Directors and ultimately approved by an individual ballot vote by every NCBA member. The strength of the NCBA policy process and the unified voice of more than 25,000 individual cattle producers, gives us strength in Washington, D.C., and when our staff speaks Continued on page 14

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STATE OF NCBA Continued from page 12

representatives of the government understand they are speaking for you. It’s the primary reason NCBA has a track-record of success dating back more than a century and it’s why NCBA continues to be successful in working for our members.

NCBA members and industry stakeholders continue to give the organization high marks for leadership and the work we do in Washington, D.C, but we must continue to grow our ranks, if we want to continue our success.

We encourage each member to do their part and recruit three new members between now and the end of the year. By standing together and recruiting our friends and neighbors, we know we’ll be creating a better future for the next generation of cattlemen and women.

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Challenged by Outsiders Although we’ve managed some major accomplishments on the NCBA policy agenda this year, we cannot become complacent. There’s still much work to be done and there will always be countless unforseen issues that arise and we must stand together to ensure we can combat against those threats to the future of beef.

Foremost among those concerns is the growing impact that activists are having on the beef industry. In the past, during election years, beef producers could count on animal rights activists promoting ballot box measures that would attempt to regulate production practices. For several years, we’ve seen animal rights groups such as the Humane Society of the United States (HSUS) push this tactic with mixed success.

They successfully passed Proposition 2, and mandated production practices in California. The result was a catastrophic decline in egg production there. HSUS has attempted similar efforts in Missouri, Colorado and elsewhere with mixed results. Now HSUS, PETA and other activists are working new angles and infiltrating producer, conservation and sportsman’s groups to promote change from the inside.

In the case of beef, these activists are masquerading as members of the producer community to gain standing and derail popular and long-standing programs like the beef checkoff. This unholy alliance with producer groups Continued on page 16

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STATE OF NCBA Continued from page 14

provides HSUS and others with the opportunity to use the court system to weaken the beef checkoff which enjoys the support of most beef producers. The animal rights activists at HSUS know that weakening the beef checkoff will lessen consumer demand for beef and consumption will decline. By dividing our industry and weakening producer-directed programs, removing beef from the plate and cattle from the land will occur much faster than they could otherwise achieve by mandating production practices one state at a time.

HSUS and other activist groups are constantly working to divide beef producers and it’s time for every cattleman and cattlewoman to step forward and stop their work.

The beef checkoff is the only producer-directed, selffunded effort that directly benefits our industry. We must protect the checkoff and defend it against these well-funded attacks by HSUS and others. Without it, the future of beef demand is certainly in question and that’s exactly what the activists expect.

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More Work Ahead As beef producers, we know that there is always more work to be done and that applies to the volunteer leaders and staff at NCBA too. We know that many of our policy priorities take years to achieve and each requires the significant assistance of our members, state partners, volunteer leaders and stakeholders to get them across the goal line. We’re grateful to have your outstanding support, so I’d like to extend a heartfelt ‘thank you,” to each of you.

We wouldn’t be successful without your support.

If you’re reading this and you aren’t yet a member of NCBA or your state and local cattlemen’s association, please take a moment and join today. Your investment is crucial to the ongoing success of each organization. If you’re already a member, we thank you again and challenge you to recruit a new member now. The investment you make in the future of the beef community goes a long way to ensuring a brighter future for you, your family and the next generation of cattlemen and cattlewomen.

DIRECTIONS 2017

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UPDATE ON POLICY 2017 has certainly been an eventful year in Washington, D.C., for America’s cattle and beef industry. A new president and Administration swept into town on January 20 and much of the partisan gridlock that marked most of the previous decade was quickly broken – especially on the regulatory front.

Wo r k i n g H a rd to Ac h i eve S u cce ss

Of course, Washington hasn’t solved every challenge facing our industry yet – international trade and access to foreign markets has been a mixed bag, and many legislative battles remain ahead on Capitol Hill, such as comprehensive tax reform and the 2018 Farm Bill.

More on those issues in a bit, but let’s start with the area where we’ve seen the most progress so far: the regulatory front.

• BLM 2.0 Rule Repealed. After the U.S. House and Senate passed a Resolution of Disapproval regarding President Obama’s BLM Planning 2.0 rule, President Trump signed it into law on March 27. The 2.0 rule would have forced the Bureau of Land Management to prioritize social and environmental change over ensuring the multiple use of public lands.

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DIRECTIONS 2017

UPDATE ON POLICY interim final rule would be delayed an additional six months to Oct. 19. NCBA has led the fight against the rule for years, pointing out that the rule would effectively kill our industry’s value-added programs and be a boon for trial lawyers.

• Waters of the United States Rule Rescinded.

President Trump on February 28 signed an executive order that triggered a reconsideration of the Obama-era WOTUS rule. EPA then took action on June 26 to officially rescind the flawed rule. While the rule isn’t officially dead yet, NCBA will continue to work to make sure that cattle producers finally get the sanity and clarity they need on land-use policy. (Amusingly, when EPA Administrator Scott Pruitt met with Colorado ranchers in August to ask for input on whether to move forward on waters issues, radical environmental activists nearly lost their collective minds – apparently the idea of an EPA Administrator actually listening to ranchers is too much for them to handle!)

Progress on international trade has been more of a challenge, on the other hand. Soon after taking office, President Trump officially withdrew the United States from the proposed Trans Pacific Partnership (TPP), which would have put American producers on equal footing with our Australian competitors in Japan. Trump also triggered the renegotiation of the North American Free Trade Agreement and threatened to pull out of the Korea-U.S. Free Trade Agreement (KORUS). However, the Trump Administration successfully helped reopen the Chinese market to U.S.produced beef for the first time since late 2003. For a more detailed analysis of trade issues in 2017, please see the adjacent article, “Update on Trade.”

• GIPSA Rule Delayed. On April 11, USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) announced that the effective date of its www.NCBA.org

NATIONAL CATTLEMEN

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UPDATE ON POLICY And, of course, there are many unfinished battles remaining on Capitol Hill. NCBA is once again leading the charge to fully and permanently repeal the death tax, as well as maintain positive provisions in the tax code, such as stepped-up basis, interest deductions, and cash accounting. As the tax-reform debate continues in Washington through the rest of 2017, NCBA will also push to reform like-kind exchanges so farmers and ranchers have more time to complete tax-deferred transactions, as well as support proposals to allow for the immediate expensing of capital purchases for livestock producers.

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Another significant item that remains on Congress’ to-do list is legislation to modernize the Endangered Species Act. Specifically, NCBA is lobbying to require recovery plans at the time of listing that include population objectives, the implementation of measurable benchmarks that trigger an automatic delisting once population objectives have been met, and is encouraging voluntary pre-listing conservation through the states.

Looming just on the horizon is the 2018 Farm Bill.

Throughout 2017, NCBA has been meeting with elected officials across Capitol Hill, lobbying for the Farm Bill to include a strong research title to make sure cattle producers remain as efficient and

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UPDATE ON POLICY competitive as possible. The Farm Bill also needs a strong conservation title to protect programs like the Environmental Quality Incentives Program (EQIP). Finally, NCBA believes the bill should also

guarantee a free, open, and private marketplace, as well as a robust and preventative animal-health program – including an adequate Foot-and-Mouth Disease (FMD) vaccine bank to respond to any potential outbreaks. NCBA is also working to improve the Agricultural Conservation Easement Program (ACEP) to make sure it works for producers without the burden of red tape.

It’s also worth noting that separate from any individual policy item, yet simultaneously relevant to nearly every one of them, is the fact that people who are very knowledgeable of – and generally sympathetic to – production agriculture are now in positions that can have huge impacts on the lives of cattle producers. Former Georgia Gov. Sonny Perdue is Agriculture Secretary. Former Montana Congressman Ryan Zinke is Interior Secretary.

Former Oklahoma Attorney General Scott Pruitt,

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PARMAK, The brand name Ranchers/Farmers have trusted since 1921

www.BeefUSA.org

NATIONAL CATTLEMEN

23

UPDATE ON POLICY who sued EPA in his prior position, now runs that agency and received a standing ovation at NCBA’s Legislative Conference in March. Former NCBA Chief Economist Gregg Doud is nominated to be our nation’s top agricultural trade negotiator. Former aide to U.S. Sen. Thom Tillis of North Carolina, Ray Starling, is the President’s special assistant for agriculture, trade, and food assistance. The importance of having solid staffers in key positions can’t be overstated.

just how long a window of opportunity is going to remain open before it slams shut, so we all need to work together to achieve as many gains as possible while we can.

There are many other issues of importance to cattle producers that are being considered in Washington in the coming months – issues such as Electronic Logging Devices (ELDs), the Resource Conservation and Recovery Act (RCRA), and immigration – just to name a few. Our industry has made some real gains in 2017, and we have a window of opportunity in which to accomplish a great deal more. That said, it’s never clear

24

NATIONAL CATTLEMEN

DIRECTIONS 2017

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UPDATE ON TRADE Tra d e i s a Wi n n e r fo r A m e r i c a

26

NATIONAL CATTLEMEN

The world of trade politics was more turbulent this year than any other in recent memory. It started with a bang at the tail end of 2016: President Donald Trump swept to victory in the Presidential election on the heels of a loud campaign against free trade. After months of attacking U.S. trade agreements as the root cause of job loss and slow economic recovery, President Trump moved swiftly to deliver on his campaign promises to withdraw the United States from the Trans-Pacific Partnership and to withdraw from the North American Free Trade Agreement.

Despite vocal opposition from NCBA and other farm groups, President Trump withdrew the United States from the TPP, erasing hard-won market access for U.S. beef negotiated under the agreement in one fell swoop. He did not spare NAFTA from his crosshairs, either. President Trump’s threat to withdraw the United States from NAFTA drew harsh criticism from the agriculture sector. Fortunately, he decided to proceed with renegotiating the agreement instead of withdrawing – although his threats of terminating the deal have continued. A third agreement that is critical

DIRECTIONS 2017

U PDATE ON TR ADE to our industry – the South Korea-United States Trade Agreement (KORUS) – is also under threat of withdrawal.

the United States Department of Agriculture. Agriculture

President Trump’s continued threat to disrupt U.S. beef access to our major export markets is a cause of great concern for U.S. beef producers. American cattlemen and women have a right to be worried. International trade is integral to our industry. That was true in the 1860s, when advances in refrigeration technology and transportation first allowed the export of dressed U.S. beef to the United Kingdom. It remains true today, as we compete in markets around the world to supply the highest quality beef to the 96 percent of consumers who live outside the United States.

In the face of uncertainty on America’s trade policy, NCBA has been actively engaging with the Administration and Congress to explain how access to foreign markets – or the lack thereof – impacts U.S. beef producers. We will continue to advocate forcefully for international market access because we know that exports benefit every segment of our industry. Cow-calf operators and feeders may not sell directly to foreign customers, but in the modern economy cattle prices are driven by global beef demand; the value of exports alone accounted for $339 per head in the first quarter of 2017.

There have been some bright spots on the trade front.

After 13 long years, and countless meetings with government officials and industry stakeholders, U.S. beef is once again eligible for export to China. With 1.3 billion consumers and rapidly expanding middle class, the Chinese market holds incredible promise. NCBA has also been encouraged by the senior leadership choices at www.NCBA.org

Secretary Sonny Perdue is a business-minded leader who understands the importance of trade to agricultural producers. The nominee for USDA’s Under Secretary of Trade and Foreign Agriculture, Ted McKinney, is a seasoned industry professional who previously worked with the U.S. Meat Export Federation. Anti-trade noise and rhetoric notwithstanding, NCBA is confident that more successes lie ahead. But there is much work to be done. As 2017 winds down, here are a few of the key trade policy priorities NCBA will be pushing in Washington, D.C.

NAFTA 2.0 The NCBA position on NAFTA renegotiations (or NAFTA 2.0) has been loud and clear: do no harm. We recognize that parts of NAFTA could use an update.

Much has changed in North American economy since the agreement first took effect in 1993 under the Clinton Administration. However, for the U.S. beef industry, it is difficult to improve on unrestricted, duty-free access to Canada and Mexico. The terms of NAFTA have allowed U.S. producers to flourish, and the agreement represents NATIONAL CATTLEMEN

27

U PDATE ON TR ADE one of the greatest success stories in the history of the American beef industry.

a preference for bilateral deals, and an agreement with Japan would be a great place to start.

Consider that U.S. beef used to face a 25 percent tariff when selling products to Mexico. With that tariff removed, U.S. beef exports to Mexico have increased more than 750 percent. Today Mexico and Canada represent two of our largest beef export markets, accounting for roughly $2 billion in annual sales.

Without an agreement in place, U.S. producers will continue to be subject to arbitrary market access restrictions. Earlier this summer, Japan applied a 50 percent tariff on frozen U.S. beef exports that will remain in place until the end of March 2018. Australia, our leading competitor for supplying beef to Japanese consumers, only faces a 27 percent tariff, negotiated under their free trade agreement with Japan. NCBA continues to work with the federal government and industry allies, such as the U.S. Meat Export Federation, to find a solution to the Japanese tariff increase. However, only a bilateral agreement with Japan will permanently address the market access issues U.S. beef faces in that market.

U.S. officials have recognized the importance of the current NAFTA terms for U.S. beef. Ambassador Robert Lighthizer, the United States Trade Representative, even acknowledged the benefits of NAFTA for U.S. agriculture in opening remarks at the first round of NAFTA 2.0 talks.

With negotiations moving forward on an aggressive timeline agreed to by all three countries, NCBA will continue to encourage officials to keep the talks narrow in scope and preserve U.S. beef access.

NCBA also continues to push back against calls from protectionist interest groups to use NAFTA as a vehicle to reinstate mandatory country-of-origin labeling (mCOOL).

No serious proposals for incorporating mCOOL into NAFTA 2.0 have surfaced, but we will remain vigilant to ensure this misguided policy is not resurrected.

Korea-United States Trade Agreement (KORUS) Review

Bilateral Trade Agreement with Japan Under the terms of the TPP, the Japanese tariff on U.S. beef would have declined from 38.5 percent to 9 percent over 16 years. This tariff reduction – the greatest market access ever negotiated for beef into Japan – would have helped the U.S. beef industry expand sales to our largest export market (Japan accounted for $1.5 billion in sales in 2016). In the absence of TPP, NCBA has been urging the Administration to find an alternative avenue for a trade agreement with Japan. President Trump has indicated 28

NATIONAL CATTLEMEN

About 550 miles from Tokyo, just across the Sea of Japan, lies South Korea. South Korea is our second largest export market, and U.S. beef has grown at an exponential rate in that market under KORUS. A comprehensive review of the agreement is underway, as President Trump and other senior U.S. officials have expressed concern that KORUS has negatively impacted the U.S. trade deficit.

A preliminary meeting in August between Ambassador Lighthizer and the Korean Trade Minister Hyun-chong Kim did not produce any details of possible modifications, but NCBA will be watching closely as talks progress.

For U.S. beef, the KORUS Agreement represents the gold standard of trade agreements. It eliminates tariffs and establishes some of the strongest science-based DIRECTIONS 2017

U PDATE ON TR ADE standards the world has seen. When previous South Korean tariffs of 40 percent were reduced, U.S. producers were finally put on equal footing with competitors in Australia. The results speak for themselves. Annual sales of U.S. beef to South Korea exploded from $582 million in 2012 to $1.06 billion in 2016 – a whopping jump of 82 percent. Similarly, exports spiked from 125,614 metric tons in 2012 to 179,280 metric tons last year – a 42 percent surge. NCBA sent a letter to Ambassador Lighthizer and Agriculture Secretary Sonny Perdue in July emphasizing this record of success, and urged them to protect our ability to export to South Korea on preferential terms.

We All Play a Part All the talk of international negotiations and selling to foreign markets may make trade policy seem like a fight taking place in a far-off land. In fact, trade policy battles take place in our own backyard. All of us in the industry who reap the benefits of open markets around the world have a role to play in ensuring America’s trade policies protect and promote the interests of U.S. beef. You

www.NCBA.org

can start by talking to your family, friends, and elected representatives about how trade impacts your livelihood.

People who speak out against trade in our communities are often unaware of the benefits trade brings to rural America each and every day.

At a recent policy conference, Senate Majority Leader Mitch McConnell said Congressional leaders have a “selling job” to do if they hope to convince people that “trade is a winner for America.” In some ways he is right.

Our elected officials need to stand up for international trade even when it may not be politically convenient.

But with trust in political leaders at an all-time low, their voices alone will not be enough to drown out the chorus of anti-trade activists.

Top-down does not work in the countryside. Ranchers know that better than anyone. If we want to win broad support for international trade in America – and preserve the benefits it provides to U.S. beef producers – all of us working at the local and grassroots level will need to pitch in.

NATIONAL CATTLEMEN

29

UPDATE ON THE MARKET So Far This Year

2 01 7 C at t l e M a r ke t s . . . a n d a Lo o k A h e a d to 2 01 8 D e r re l l S . Pe e l B re e d l ove P ro fe ss o r o f Ag r i b u s i n e ss a n d E x te n s i o n L i ve sto c k M a r ke t i n g S p e c i a l i st , O k l a h o m a St ate U n i ve r s i t y

30

NATIONAL CATTLEMEN

Through the first three-quarters of the year, 2017 has, by and large, been a pleasant surprise. Fed and feeder cattle prices peaked higher than expected in the second quarter before declining seasonally into the summer. Feeder cattle prices are holding at or slightly higher than the same time last year while fed cattle price dropped below year ago levels due to late summer seasonal pressure.

Feedlots enjoyed record profitability through the first half of the year before returns dropped with declining August fed cattle prices. Aggressive feedlot marketings largely kept pace with increased feedlot placements limiting the growth of feedlot inventories in the face of overall growth in cattle numbers.

Cattle and beef prices have been supported strong domestic and international beef demand. Despite a year to date increase in beef production of over four percent, retail beef prices have generally increased month to month and are currently very close to a year DIRECTIONS 2017

UPDATE ON THE MARKET ago levels. After dropping sharply from an impressive and surprising peak in May and June, boxed beef prices are holding close to year earlier levels late in the third quarter.

International trade has helped support cattle prices in 2017 with beef exports up 14.5 percent for the first 7 months of the year and beef imports down 4.3 percent over the same period. For the year to date, Japan is the top export market with 30.3 percent of U.S. beef exports, followed by South Korea (16.0 percent); Mexico (14.7 percent); Canada (11.5 percent) and Hong Kong (10.3 percent). The top five export destinations represent nearly 83 percent of total U.S. beef exports.

Major sources of beef imports include Canada with 22.9 percent of total imports; followed closely by New Zealand (22.7 percent); Australia (20.9 percent); Mexico (19.0 percent) and Brazil (5.2 percent). These

five import sources represent almost 91 percent of total beef imports in the first seven months of 2017.

Cattle producers in many regions have been challenged in 2017 by a host of natural disasters including spring wildfires in the southern plains; summer and fall wildfires in the northern Rockies and Pacific Northwest; drought across the northern plains; and hurricanes Harvey and Irma. While none of these individually or even collectively are likely to impact cattle and beef markets much, these events have huge impacts on affected producers.

Finishing up 2017 Fed and feeder cattle prices, along with boxed beef prices are all expected to remain above year ago levels in the fourth quarter. Feeder cattle prices will be subject Continued on page 34

Top Export Market of U.S. Beef

Top Import Sourses of Beef

30.3% Japan

22.9% Canada

16.0% South Korea

22.7% New Zealand

14.7% Mexico

20.9% Australia

11.5% Canada

19.0% Mexico

10.3% Hong Kong Top five destinations represent nearly 83% of total U.S. beef exports.

www.NCBA.org

5.2% Brazil Top five import sources represent nearly 91% of total beef imports.

NATIONAL CATTLEMEN

31

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UPDATE ON THE MARKET Continued from page 31

to typical seasonal price pressure this fall. A larger 2017 calf crop will increase fall calf supplies but generally good forage conditions, especially in the southern half of the country, combined with continued feedlot

demand for feedlot cattle, are expected to hold feeder prices to seasonal declines. Fed cattle and boxed beef prices are expected to stabilize from summer lows and move seasonally higher in the fourth quarter.

Feed costs are expected to remain favorable for cattle producers with hay and concentrate prices close to year earlier levels. Cow-calf producers have decent prospects for modest returns depending on individual cost of production. Feedlot margins are squeezed at the end of the third quarter but may improve in the fourth quarter with fed prices expected to improve relative to feeder cattle prices.

Beef production will continue growing in the fourth quarter, though with a smaller year over year increase compared to earlier quarters. For the year, 2017 beef production is projected to be up 4 to 4.5 percent over 2016. Total cattle slaughter will likely be up 5 to 5.5 percent with smaller carcass weights partially offsetting increased slaughter. Steer and heifer carcass weights have averaged about 14 pounds below last year through August. Carcass weights will reach a seasonal peak in

BEEF PRODUCTION vs. BEEF COW INVENTORY Inventory on January 1, U.S. Mil. Head 37 36 35 34 33 32 31 30 29 28 1987

Bil. Pounds 28 Commercial Beef Production >>>

26 25 24 23 <<< Beef Cow Inventory

22 1990

1993

1996

1999

Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC and Derrell Peel

34

27

NATIONAL CATTLEMEN

2002

2005

2008

2011

2014

2017

2017 Beef Production projected; 2018 Production & Inventory forecast DIRECTIONS 2017

UPDATE ON THE MARKET the fourth quarter but are expected to remain below year ago levels through the end of the year.

A Look Ahead to 2018 Cattle numbers and beef production will be higher, yet again, in 2018.

The beef cow herd almost certainly continued expanding in 2017, albeit at a slower pace than 2016. Estimates for 2017 beef cow herd expansion vary from less than one percent to a nearly two percent year over year increase by January 2018. Heifer and beef cow Continued on page 56

The Bald-Faced Truth About Hereford genetics Itâ&#x20AC;&#x2122;s obvious â&#x20AC;&#x201C; Hereford-sired calves deliver a $51 increase in net profit per cow, per year.* Hereford genetics bring legendary hybrid vigor, improved fertility, feed efficiency and easy-handling docility to your program. Read the research, and see why Hereford heterosis pays off, at Hereford.org/genetics.

*Compared to Angus-sired calves. Source: Daley, David A. and Earley, Sean P. Impacts of Crossbreeding on Profitability in Vertically Coordinated Beef Industry Marketing Systems. American Hereford Association. Retrieved from https://hereford.org/ wp-content/uploads/2017/02/HarrisHeterosisReport.pdf. 57100-D03

www.NCBA.org

NATIONAL CATTLEMEN

35

DIRECTIONS Statistics is made to ensure the information contained within is accurate, some individual operations may have been overlooked and others may have chosen not to be included.

The National Cattlemen’s Beef Association is pleased to present the 23rd annual edition of Directions.

This special edition of National Cattlemen includes useful beef industry trends and statistics, as well as information about NCBA and current priorities.

If you would like to participate in next year’s listings, please contact NCBA at 866-BEEF-USA and request to be included in the 2018 survey. Please note that all listings must meet the rankings criteria to be considered.

The information included in this section is compiled each year by the analysts at CattleFax over the course of several months. The information comes from open, voluntary and proprietary sources. While every effort

Cattle and Calves on Farms (000 head)

2016 2017 TREND 93.6 million head, up from 91.9 million head on Jan. 1, 2016. According to USDA’s National Region I 12.1% 12.0% Agricultural Statistics Service, cattle numbers increased in every region of the United States Indiana 890 FLAT 890 DOWN 2,160 Kentucky 2,170 from the prior year.

Maryland 190 DOWN 186 Michigan 1,140 UP 1,180 New England* 512 UP 514

2016 2017

2016 2017 New York 1,460 UP 1,490 TREND 1,250 UP 1,300 TREND Ohio Region VII 19.9% 19.8% Pennsylvania 1,600 UP 1,620 Region III 16.5% 16.4% Kansas 6,250 UP 6,400 Illinois 1,180 UP 1,220 Virginia 1,490 UP 1,520 Nebraska 6,450 FLAT 6,450 Iowa 3,950 DOWN 3,850 West Virginia 390 UP 405 UP 1,810 North Dakota 1,710 Minnesota 2,420 DOWN 2,400 Total 11,092 UP 11,365 South Dakota 3,900 DOWN 3,850 *Connecticut, Delaware, Maine, Missouri 4,100 UP 4,350 Massachusetts, New Hampshire, Total 18,310 UP 18,510 Wisconsin 3,500 UP 3,550 New Jersey, Rhode Island Total 15,150 UP 15,370 and Vermont

Jan. 1, 2017 • Cattle and calf numbers were up 2 percent from the previous year at

2016 2017 TREND Region V 12.5% 12.5% Alaska 11 UP 13 Colorado 2,700 UP 2,850 Idaho 2,390 DOWN 2,350 Montana 2,650 FLAT 2,650 Oregon 1,310 UP 1,320 Washington 1,150 FLAT 1,150 Wyoming 1,310 UP 1,330 Total 11,521 UP 11,643

2016 2017 TREND Region II 9.5% 9.4% Alabama 1,250 UP 1,300 Florida 1,680 UP 1,700 1,100 FLAT 1,100 Georgia Louisiana 770 UP 780 Mississippi 940 DOWN 890 North Carolina 800 UP 830 South Carolina 340 FLAT 340 Tennessee 1,830 FLAT 1,830 8,710 UP 8,770 Total

2016 2017 TREND Region VI 9.6% 9.7% Arizona 900 UP 970 California 5,150 FLAT 5,150 Hawaii 140 UP 142 New Mexico 1,370 UP 1,430 Nevada 435 UP 445 Utah 840 UP 920 8,835 UP 9,057 Total

2016 2017 TREND Region IV 19.9% 20.4% Arkansas 1,700 UP 1,750 Oklahoma 4,800 UP 5,000 Texas 11,800 UP 12,300 Total 18,300 UP 19,050

Top 25 Seedstock Operators 7

9

10 13 9 17 21 6 5, 8 16 20 23 24 12 22 21 714 4 15 18 22 2 1 11

19

24

3 24

1

Express Ranches Yukon, OK

Owner: Robert A. Funk Mgr./CEO: Jarold Callahan Additional Locations: New Mexico Subsidiaries: Express Cattle Feeding Xcel Feedyards # Registered Females: 5,500 Total Marketings: 4,700 Breeds Utilized: Angus and Hereford

6

Sitz Angus Ranch

Harrison/Dillon, MT

Owners: Bob & Jim Sitz and Family Mgr./CEO: Bob & Jim Sitz Additional Locations: N/A Subsidiaries: N/A # Registered Females: 2,000 Total Marketings: 1,550 Breeds Utilized: Angus

2

Gardiner Angus Ranch Ashland, KS

Owners: The Henry Gardiner Family Mgr./CEO: The Henry Gardiner Family Additional Locations: N/A Subsidiaries: N/A # Registered Females: 1,115 Total Marketings: 3,493 Breeds Utilized: Angus

7

Thomas Angus Ranch Baker City, OR

Owners: The Thomas Family Mgr./CEO: Robert Thomas Additional Locations: Wyoming Subsidiaries: ET Northwest, LLC # Registered Females: 1,200 Total Marketings: 1,338 Breeds Utilized: Angus

3

44 Farms

Cameron, TX

Owner: Bob McClaren Mgr./CEO: Doug Slattery Additional Locations: N/A Subsidiaries: 44 Farms Steaks # Registered Females: 2,178 Total Marketings: 2,023 Breeds Utilized: Angus

8

Ludvigson Stock Farms Billings, MT

Owners: The Ludvigson Family Mgr./CEO: Ryan Ludvigson Additional Locations: North Dakota, Oregon, Missouri, Iowa, New Mexico Subsidiaries: LN Cattle Company, Orion Beef Group # Registered Females: 1,600 Total Marketings: 1,320 Breeds Utilized: Red Angus, Red SimAngus

4

Leachman Cattle of Colorado, LLC Fort Collins, CO

Owners: Lee Leachman, Mike Browning, Tim Watts Mgr./CEO: Lee Leachman Additional Locations: N/A Subsidiaries: N/A # Registered Females: 5,000 Total Marketings: 1,985 Breeds Utilized: Angus, Red Angus, Charolais, Stabilizer

9

KG Ranch

Three Forks, MT

Owner: Paul Doddridge Mgr./CEO: Greg Strohecker Additional Locations: N/A Subsidiaries: N/A # Registered Females: 1,600 Total Marketings: 1,135 Breeds Utilized: Angus

5

Vermilion Ranch Billings, MT

Owners: Pat Goggins Family Mgr./CEO: Joe Goggins Additional Locations: N/A Subsidiaries: N/A # Registered Females: 2,300 Total Marketings: 1,750 Breeds Utilized: Angus

10

DeBruycker Charolais Dutton, MT

Owners: DeBruycker Family Mgr./CEO: Lloyd DeBruycker Additional Locations: N/A Subsidiaries: N/A # Registered Females: 2,300 Total Marketings: 1,100 Breeds Utilized: Charolais

11

Langford Herefords & Hybrids Okmulgee, OK

12

Owners: Leon Langford & Family Mgr./CEO Watson Langford Additional Locations: New Mexico, Texas Subsidiaries: N/A # Registered Females: 850 Total Marketings: 1,062 Breeds Utilized: Hereford, Angus

16

Schaff Angus Valley

St, Anthony, ND

Stevensonâ&#x20AC;&#x2122;s Diamond Dot Cattle Co. Hobson, MT

Owners: Clint Stevenson Family Mgr./CEO: Clint Stevenson Additional Locations: N/A Subsidiaries: N/A # Registered Females: 1,350 Total Marketings: 722 Breeds Utilized: Angus

Caldwell, ID

Owners: Greg, Tucker & Sam Shaw Families Mgr./CEO: Greg Shaw Additional Locations: N/A Subsidiaries: N/A # Registered Females: 1,550 Total Marketings: 1,005 Breeds Utilized: Hereford, Black Angus, Red Angus

17

Owners: Kelly & Martie Schaff Mgr./CEO: Kelly Schaff Additional Locations: N/A Subsidiaries: N/A # Registered Females: 1,100 Total Marketings: 883 Breeds Utilized: Angus

21

Shaw Cattle Company, Inc.

22

Mytty Angus Ranch Florence, MT

Owners: Kevin & Traci Mytty Mgr./CEO: N/A Additional Locations: N/A Subsidiaries: N/A # Registered Females: 450 Total Marketings: 865 Breeds Utilized: Angus

Jorgensen Land & Cattle Ideal, SD

Owners: Greg, Bryan, Cody & Nick Jorgensen Mgr./CEO: Cody Jorgensen Additional Locations: N/A Subsidiaries: N/A # Registered Females: 759 Total Marketings: 650 Breeds Utilized: Angus

23

13

Eaton Charolais Lindsay, MT

Owners: Eaton Family Mgr./CEO: Lee Eaton Additional Locations: N/A Subsidiaries: N/A # Registered Females: 2,100 Total Marketings: 940 Breeds Utilized: Charolais

18

Schurrtop Angus & Charolois Farnam & Maywood, NE

Owner: John L. Schurr Mgr./CEO: Marty & Ryan Schurr Additional Locations: N/A Subsidiaries: N/A # Registered Females: 1,325 Total Marketings: 807 Breeds Utilized: Angus, Charolais

Wulf Cattle Morris, MN

Owner: Riverview dba Wulf Cattle Mgr./CEO: Jerry Wulf Additional Locations: Nebraska, South Dakota Subsidiaries: N/A # Registered Females: 2,100 Total Marketings: 620 Breeds Utilized: Limousin, LimFlex, Angus

24

14

Nichols Farms Ltd. Bridgewater, IA

15

Family Ownership Mgr./CEO: J. David Nichols Additional Locations: N/A Subsidiaries: Ayers Stock Farm, Nichols Farms Wisconsin Division, Havens Cattle Co., Lincoln Center Partnership # Registered Females: 1,900 Total Marketings: 920 Breeds Utilized: Angus, Simmental, South Devon

19

Deer Valley Farm

Fayetteville, TN

Owner: Dr. Fred Clark Mgr./CEO: Jonathan Perry Additional Locations: N/A Subsidiaries: N/A # Registered Females: 1,400 Total Marketings: 800 Breeds Utilized: Angus

HeartBrand Beef Flatonia, TX

Owners: Beeman Family Mgr./CEO: Bill Fielding Additional Locations: Texas, South Dakota, New Mexico, Arkansas, Idaho Subsidiaries: Certified Akaushi Beef, Bovina Feeders, American Akaushi Association, Caviness Beef Packers # Registered Females: N/A Total Marketings: 610 Breeds Utilized: Akaushi

24

Tie

Whitman, NE

Owners: Connealy Family Mgr./CEO: Connealy Family Additional Locations: N/A Subsidiaries: N/A # Registered Females: 2,500 Total Marketings: 902 Breeds Utilized: Angus

20

Bieber Red Angus Leola, SD

Owners: Craig & Peggy Bieber, Ron & Lois Bieber Mgr./CEO: Craig Bieber Additional Locations: N/A Subsidiaries: RAB Ranch # Registered Females: 1,130 Total Marketings: 792 Breeds Utilized: Red Angus, Simmental Hybrids

Schiefelbein Farms Kimball, MN

Connealy Angus

24

Yon Family Farms

Ridge Point, SC

Owner: Owners: Kevin & Lydia Yon Frank Schiefelbein Family Mgr./CEO: Mgr./CEO: Kevin Yon Schiefelbein Family Additional Locations: N/A Additional Locations: N/A Subsidiaries: N/A Subsidiaries: Schiefelbein Feeders, # Registered LLC Females: 1,450 # Registered Females: Total Marketings: 850 610 Total Marketings: Breeds Utilized: 610 Angus, SimAngus, Ultrablack Breeds Utilized: Angus, SimAngus

39

NATIONAL CATTLEMEN

DIRECTIONS 2017

Top 25 Cow-Calf Operators 12

24

14

18

19

2 20

5

6 15 8

10 15 21

19

23 3

1

Deseret Cattle & Citrus St. Cloud, FL

Head Office: St. Cloud, FL Owner: Farmland Reserve, Inc. CEO: K. Erik Jacobsen States of Operation: Florida

6

Padlock Ranch Company Ranchester, WY

Head Office: Ranchester, WY Owner: Scott Family CEO: Trey Patterson States of Operation: Wyoming, Montana

2

Simplot Livestock Co. Grand View, ID

Head Office: Grand View, ID Owner: Simplot Family CEO: Thomas J. Basabe States of Operation: Idaho, Oregon, Nevada, Utah

7

Seminole Tribe of Florida, Inc. Brighton, FL

Head Office: Brighton, FL Owner: Seminole Tribe CEO: Mitchel Cypress States of Operation: Florida, Georgia

3

King Ranch Houston, TX

Head Office: Houston, TX Owner: King Ranch Family Shareholders CEO: Robert Underbrink States of Operation: Texas, Florida

8

Matador Cattle Company Wichita, KS

Head Office: Wichita, KS Owner: Koch Industries CEO: Damon Cox States of Operation: Kansas, Texas, Montana

4

25 11 17 4 , 9 13 17 & 13 14 22

Lykes Bros.

Inc.

Okeechobee, FL

Head Office: Okeechobee, FL Owner: N/A CEO: Charles P. Lykes, Jr. States of Operation: Florida

9

Rollins Ranches Okeechobee, FL

Head Office: Okeechobee, FL Owner: LOR, Inc..

CEO: N/A States of Operation: Florida, Georgia, Texas

5

Silver Spur Land and Cattle Encampment, WY

Head Office: Encampment, WY Owner: N/A CEO: Thad York States of Operation: Wyoming, Colorado, Nebraska, New Mexico

10

Singleton Properties LLC Lamy, NM

Head Office: Lamy, NM Owner: Singleton Family CEO: Will Singleton States of Operation: New Mexico, California

11

Lightsey Cattle Co.

Lake Wales, FL

Head Office: Lake Wales, FL Owner: Cary and Layne Lightsey CEO: N/A States of Operation: Florida, Georgia

15 Tie

Cactus Feeders

Amarillo, TX Head Office: Amarillo, TX

Owner: 100% Employee Owned CEO: Paul Defoor and Bradley W. Hastings States of Operation: Kansas

21

Spade Ranches, Ltd Lubbock, TX

Head Office: Lubbock, TX Owners: Bassham and Chappell Families CEO: Wesley Welch States of Operation: Texas

12

Parker Ranch, Inc. Kameula, HI

Head Office: Kameula, HI Owner: Parker Ranch Foundation Trust CEO: Neil “Dutch” Kuyper States of Operation: Hawaii

17

Adams Ranch Inc. Ft. Pierce, FL

Head Office: Ft. Pierce, FL Owner: Adams Family CEO: Michael Adams States of Operation: Florida, Georgia

22

Immokalee Ranch

Immokalee, FL

Head Office: Immokalee, FL Owner: The Colliers CEO: C.W. Stoner, Jr. States of Operation: Florida

13

Williamson Cattle Company Okeechobee, FL

Head Office: Okeechobee, FL Owner: Williamson Family CEO: Wes Williamson States of Operation: Florida, Alabama, Texas

18

Ellison Ranching CO Tuscarora, NV

Head Office: Tuscarora, NV Owner: Ellison Family CEO: Pete Ellison States of Operation: Nevada, Idaho

23

Pitchfork Land and Cattle Guthrie, TX

Head Office: Guthrie, TX Owner: Williams Family CEO: Mary Randolph Ballinger States of Operation: Texas, Oklahoma

14

Duane Martin Livestock Ione, CA

Head Office: Ione, CA Owner: Duane Martin CEO: Duane Martin States of Operation: California, Oregon, Nevada, Wyoming, Colorado, Nebraksa

19

Circle A Angus Ranch Iberia, MO

Head Office: Iberia, MO Owner: The Dave Gust Family General Manager: Dave Gust States of Operation: Missouri

24

Duane Martin, Jr. Livestock Elk Grove, CA

Head Office: Elk Grove, CA Owner: Duane Martin, Jr. CEO: Duane Martin, Jr. States of Operation: California, Oregon, Wyoming, Colorado, Idaho, Nebraska

15

True Ranches LLC Casper, WY

Head Office: Casper, WY Tie Owner: The True Family CEO: David L True States of Operation: Wyoming

20

Winecup Gamble Inc. Montello, NV

Head Office: Montello, NV Owner: Fireman Family CEO: James Rogers States of Operation: Nevada

25

Ryals Cattle Company LLC Acadia, FL

Head Office: Acadia, FL Owner: Ann H. Ryals, H.D. Ryals, II CEO: H.D. Ryals, II States of Operation: Florida

Top 20 Feedlots 6 19

14 13

1

JBS Five Rivers, LLC Greeley, CO

Head Office: Greeley, CO Owner: JBS Swift Subsidiaries: J&F Oklahoma CEO: Mike Thoren Capacity: 950,000 Number of Yards: 12 States of Operation: Arizona, Texas, Oklahoma, Kansas, Colorado, Idaho, Alberta, CN

2

15 18 11 4 1 6 5 9 10 20 15,15 2 , 3, 6 9 & 12

Cactus Feeders Amarillo, TX

Head Office: Amarillo, TX Owner: 100% Employee Owned Subsidiaries: Spike Box Land & Cattle Co. CEO: Bradley W. Hastings Capacity: 527,000 Number of Yards: 10 States of Operation: Texas, Kansas

3

Friona Industries, L.P. Amarillo, TX

Head Office: Amarillo, TX Owner: Privately Held Subsidiaries: Friona Ag. Credit Corp.

CEO: Brad Stout Capacity: 450,000 Number of Yards: 6 States of Operation: Texas

4

Green Plains Cattle Company Omaha, NE

Head Office: Omaha, NE Owner: Green Plains Inc. Subsidiaries: N/A CEO: Joel Jarnagin Capacity: 258,000 Number of Yards: 4 States of Operation: Texas, Kansas, Colorado

5

Catttle Empire LLC Satanta, KS

Head Office: Satanta, KS Owner: Roy N. Brown, Paul J. Brown, Rex A. Brown, Pamela Kells, and DeeAnn Brown Subsidiaries: 4BK Cattle Co. LLC, Empire Repair Services, LLC, Empire Calf Ranch LLC, Empire Prime Ranch LLC CEO: Roy N. Brown Capacity: 245,500 Number of Yards: 5

States of Operation: Kansas

Driving Your Cattle Feeding Business Forward With a Special Breed of Financial Strength Helping your business thrive in today’s evolving industry is what our Agri-business team does best.

That’s why we’re proud to support the National Cattlemen’s Beef Association.

W. Ashley Allen Bank of America Merrill Lynch 806.463.3911 baml.com/agribusiness

“Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed. ©2013 Bank of America Corporation 09-13-0323

6

J. R. Simplot Co. Boise, ID

Head Office: Boise, ID Owner: Simplot Family CEO: Thomas J. Basabe Subsidiaries: Simplot Livestock Co. Capacity: 230,000 Number of Yards: 2 States of Operation: Idaho, Washington

11

Gottsch Livestock Feeders Elkhorn, NE

Head Office: Elkhorn, NE Owner: Brett and Bill Gottsch CEO: Brett Gottsch Subsidiaries: N/A Capacity: 195,500 Number of Yards: 3 States of Operation: Nebraska

15

Bar-G Feedyard

Hereford, TX

Tie Head Office: Hereford, TX Owner: Livestock Investors LTD CEO: Johnny Trotter Subsidiaries: N/A Capacity: 125,000 Number of Yards: 3 States of Operation: Texas

6

Foote Cattle Co. Bucyrus, KS

Tie Head Office: Bucyrus, KS Owner: Bob Foote Family CEO: Bob Foote Subsidiaries: N/A Capacity: 230,000 Number of Yards: 5 States of Operation: Kansas, Nebraska

12

Tejas Feeding Group Amarillo, TX

Head Office: Amarillo, TX Owner: Mike Smith CEO: Mike Smith Subsidiaries: Tejas Trading Company Capacity: 155,000 Number of Yards: 4 States of Operation: Texas

15

Barrett-Crofoot, Inc. Hereford, TX

Head Office: Hereford, TX Owner: Barrett Families CEO: Ed Barrett Subsidiaries: N/A Capacity: 125,000 Number of Yards: 2 States of Operation: Texas

6

Oppliger Feedyard, Inc. Amarillo, TX

Head Office: Amarillo, TX Owner: Don Oppliger Family CEO: N/A Subsidiaries: N/A Capacity: 230,000 Number of Yards: 6 States of Operation: Texas, Nebraska, New Mexico

13

Pinal Feeding Co. Laveen, AZ

Head Office: Laveen, AZ Owner: Northside Hay Company CEO: Earl Petznick, Jr. Subsidiaries: Sacate Pellet Mills Capacity: 150,000 Number of Yards: 3 States of Operation: Arizona

18

Adams Land & Cattle, LLC Broken Bow, NE

Head Office: Broken Bow, NE Owner: Bill and Jerry Adams CEO: Jerry Adams Subsidiaries: N/A Capacity: 124,000 Number of Yards: 3 States of Operation: Nebraska

9

Irsik & Doll Feed Services, Inc. Cimarron, KS

Head Office: Cimarron, KS Owner: Privately Held CEO: John M. Petz Subsidiaries: Grain Division Capacity: 215,000 Number of Yards: 6.5 States of Operation: Kansas

14

Harris Feeding Co. Coalinga, CA

Head Office: Coalinga, CA Owner: John C. Harris CEO: David E. Wood Subsidiaries: Harris Farms, Harris Ranch Beef Co. Capacity: 135,000 Number of Yards: 2 States of Operation: California, Nevada

19

Agri Beef Co. Boise, ID

Head Office: Boise, ID Owner: Rebholtz Family CEO: Robert Rebholtz Jr. Subsidiaries: AB Foods LLC, Performix Nutrition LLC, Washington Beef LLC Capacity: 115,000 Number of Yards: 5 States of Operation: Washington, Idaho

10

Innovative Livestock Services Inc. Great Bend, KS

Head Office: Great Bend, KS Owner: Privately Held CEO: Jerry Kuckelman Subsidiaries: ILS Land LLC Capacity: 200,000 Number of Yards: 8 States of Operation: Kansas, Nebraska

15

Dinklage Feed Yard, Inc. Sidney, NE

Tie Head Office: Sidney, NE Owner: Shareholders CEO: Rex Trumbull Subsidiaries: N/A Capacity: 125,000 Number of Yards: 4 States of Operation: Nebraska, Wyoming, Colorado

20

Hitch Enterprises, Inc. Guymon, OK

Head Office: Guymon, OK Owner: Hitch Family CEO: Chris and Jason Hitch Subsidiaries: Henry C. Hitch Feedlot Inc., Hitch Feeders 1 Inc. Capacity: 111,000 Number of Yards: 2 States of Operation: Oklahoma

Top 10 Beef Slaughter Operations

1

Tyson Foods, Inc.

Springdale, AR

2

JBS USA, LLC Greeley, CO

Publicly traded company on NYSE CEO: Donnie Smith

Owner: JBSSA Brazil CEO: Andre Nogueira

Subsidiaries: N/A

Subsidiaries: N/A

Daily Slaughter Capacity:

Daily Slaughter Capacity

N/A 2016 Sales: N/A Slaughter Total: N/A Number of Beef Plants: 6

32,000 2016 Sales: $14 Billion Slaughter Total 6 Million Number of Beef Plants: 10

6

Nebraska Beef Omaha, NE

6

Greater Omaha Packing Co., Inc. Omaha, NE

3

Cargill Meat Solutions Wichita, KS

Owner : Cargill, Inc. CEO : Brian Sikes

8

Caviness Beef Packers, Ltd. Hereford, TX

Subsidiaries: None

Subsidiaries: High Country Meats, Trex, Go Express Transportation

Subsidiaries: Palo Duro Meat

Daily Slaughter Capacity:

Daily Slaughter Capacity:

Daily Slaughter Capacity:

2016 Sales: N/A

Slaughter Total: N/A Number of Beef Plants: 1

Slaughter Total: 710,000 Number of Beef Plants: 1

2,500

Kansas City, MO

Owners: Leucadia National Corp, U.S. Premium Beef, LLC & others CEO: Tim Klein

5

American Foods Group Green Bay, WI

Owner: Rosenâ&#x20AC;&#x2122;s Diversified Inc. CEO: Steven W. Van Lannen

Subsidiaries: Subsidiaries: National Carriers, Inc. N/A National Beef Leathers, LLC, Kansas City Steak Company, LLC Daily Slaughter Capacity Daily Slaughter Capacity: Daily Slaughter Capacity: 12,000 29,000 N/A 2016 Sales 2016 Sales: 2016 Sales: N/A $7.3 Billion $3.6 Billion Slaughter Total: Slaughter Total: Slaughter Total N/A N/A 7 Million Number of Beef Plants: Number of Beef Plants: Number of Beef Plants: 2 10 8

Owner: Caviness Packing Co. CEO: Terry Caviness

2,4502,800 2016 Sales: $1.7 Billion

National Beef Packing Company, LLC

Subsidiaries: N/A

Owner: Henry Davis CEO: Henry Davis

Corporate Owners CEO: William Hughes

4

1,750

2016 Sales: $760 Million Slaughter Total: 490,000 Number of Beef Plants: 1 Company Headquarters

9

Agri Beef Company Boise, ID

Owners: Rebholtz Family CEO: Robert Rebholtz, Jr.

10

Kane Beef

Corpus Christi, TX

Owners: Fernandez Family CEO: Alfred Bausch

Subsidiaries: Subsidiaries: AB Foods, LLC, N/A Washington Beef, LLC, PerforMix Nutrition Systems LLC Daily Slaughter Capacity: Daily Slaughter Capacity: 1,650 1,500 2016 Sales: 2016 Sales: N/A $450 Million Slaughter Total: N/A Number of Beef Plants: 1

Slaughter Total: 300,000 Number of Beef Plants: 1

The sound of a healthy, weaned calf?

Silence.

LIFE STAGE

Cow/Calf Weaned Calf Replacement Heifer Grower/Finisher

ACCURATION ® PRECON ® STRESS CARE ®

Animals speak louder than words. We could tell you how the Purina® All Seasons™ Cattle Nutrition Program is designed to provide nutrition at the right time, resulting in a faster weaning period for calves. But the lack of bawling calves says it all.

TM

Your local Purina dealer can tell you more than this ad ever could. Or visit ProofPays.com ©2017 Purina Animal Nutrition LLC. All rights reserved.

Purina® All Seasons™ Cattle Nutrition Program

3 must-haves in a weaned calf nutrition program Silence is golden during the weaning period. Bawling calves? Well, not so much.

Evaluating your weaned calf nutrition program may not only result in some much-needed silence but could provide additional benefits to your operation.

A weaned calf nutrition program should: 1. Support healthy calves and more pounds Imagine your best calf crop. Those calves likely performed well and looked great. They overcame stress and got straight to eating.

Shouldn’t every calf crop be like that?

Calves receiving proper nutrition have stronger immune systems and are less likely to get sick. A successful weaning period can also lead to faster weight gain and decreased mortality.

The Purina® All Seasons™ Cattle Nutrition Program provides quality, palatable nutrition to help calves overcome the stressors of weaning and get them eating quickly. This can result in healthy calves and more pounds.

2. Be flexible and convenient Whether you need to hand-feed or self-feed, or have limited forage

©2017 Purina Animal Nutrition LLC. All rights reserved. ©2016

or plentiful forage, your nutrition program should complement your operation.

The Purina® All Seasons™ Cattle Nutrition Program has flexible feed options that work in both hand-fed (Precon® Complete and Stress Care™ 5 Supplement) and self-fed (Accuration® Starter) scenarios. You can also choose solutions based on your available forage. Purina® Stress Tubs can be used in any situation as a convenient, consistent delivery form of vitamins and minerals for timid or green calves.

3. Give you confidence You should be confident in your weaned calf nutrition program. You need to know you’re doing what’s best for your cattle and operation to move it forward to the next generation.

Over 1,800 Proof Pays feeding trials have been completed nationwide on operations just like yours, proving that solutions within the Purina® All Seasons™ Cattle Nutrition Program work. If you need your own proof, you can complete an on-farm feeding trial and let your animals speak to the results.

Talk to your local Purina representative, or visit ProofPays.com to start your feeding trial.

Farm: Lucas Cattle Company Location: Missouri Lucas Cattle Company is a 2,400cow, 16,000-acre multi-ranch operation located in Missouri.

Recognizing the high-stress timeframe of the weaning period, the operation strives to have their calves eat, gain weight and stay healthy, all of which are designed to be accomplished with the Purina® All Seasons™ Cattle Nutrition Program.

“Pulling a calf off its mom and placing it into the weaning environment is probably the most stress a calf will go through in its life. You need those calves to eat, gain weight and stay healthy. Purina’s weaned calf solutions help us accomplish all three things, putting money in our pockets,” says Ernie Brauch, manager of Lucas Cattle Company’s Wheatland Ranch.

“Weaning can be traumatic,” adds owner Forrest Lucas. “Keeping calves healthy through this part of their life is a big deal to us.”

Total Retail Meat Supply

Millions of pounds

1.14

67.72 Total Poultry 98.38

81.65 2003 17.44 Total Red Meat 118.49 217.58

51.84

64.95 Total Poultry 99.09

51.37 66.15 Total Poultry 102.38 50.05 65.58 Total Poultry 102.56

50.78 65.23 Total Poultry 102.75

82.10 2013 15.95 Total Red Meat 104.32 202.38

46.82 56.35 Total Poultry 98.05

83.49 2014 15.53 200.83 Total Red Meat 101.80

46.43 54.23 Total Poultry 99.02

88.99 2015 15.72 Total Red Meat 104.98 209.69

.85

.30

.85

.26

.84

.25 .83

nsin 13.7

Yo rk

6.6

%

All Other States 27.7% 2,594 U.S. Total 9,349

%

2. Te xas 1 8

%

Lamb

All Other States 15.2% 10.

Ida 9. W ho 2 2,002 iscon .1% 8. Ok lahomsin 2.1% a 7. Minnesota 2.2.4% 9% 7. S. Dakota 2.9%.3% 3 fornia % 6. Cali .2 o7 rad o l o 5.C

sas 17.6

Veal

Ne w

%

.30

49.89 55.48 Total Poultry 106.24 Beef

3.

3. Kan

Pork

2. Wisco

Cattle on Feed (000) Head

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 Turkey Chicken

13.1

.85

.33

54.01 49.87 Total Poultry 104.71

89.63 2016 16.61 Total Red Meat 106.46 212.69

.84

.37

% on 2.9 shingt co 3.5% i 10. Wa Mex 4.5% ew n 9. N iga ich M 8.

7. M i

45.94 57.36 Total Poultry 96.68

Top Ten 72.3% 6,755

6.4%

80.67 2012 16.01 Total Red Meat 104.48 201.17

.91

All Other States 27.7% 2,594

aho

45.73 57.29 Total Poultry 99.25

.40

.98

4. Id

83.21 2011 16.04 Total Red Meat 104.22 203.47

.40

5. Pennsylvania 5.6%

47.74 59.58 Total Poultry 98.93

.41 1.00

ia

61.10 Total Poultry 96.66

82.56 2010 16.37 Total Red Meat 108.63 207.56

U.S. Total 93,584

for n

Total Poultry 101.09

50.13

All Other States 42.6% 39,834

Dairy Cattle (000) Head

1.13

Top Ten 84.7% 11,065

8.9

79.74 Total Red Meat 112.61

62.70

49.47

.40

Top Ten States 57.4% 53,750

ali

83.47 2008 17.62 Total Red Meat 113.58 214.67

.46 1.06 .43 1.05

65.82

Total Poultry 103.54

85.21 2007 17.54 Total Red Meat 117.54 220.29

.50 1.13

e 2. N 3. Kansas 6.8% 4. Ca li 5.

Ok fornia 5.5 % lah om a5 .3%

All Other States 42.6% 39,834

ras ka 1

49.41

1.12

%

1. C

86.62 2006 16.93 Total Red Meat 116.72 220.26

2009 16.91 209.27

.58

6.9 ska a r b

eb

85.84 Total Red Meat 117.16

.59 1.18

.6% ri 4 sou Mis wa 4.1% 7. Io

2005 16.72 219.72

U.S. Total 31,210

Total Cattle (000) Head

6.

85.32 Total Red Meat 119.16

All Other States 41.7% 13,021.20

8%

51.55

2004 17.07 221.54

%

.59

80.66 Total Red Meat 121.03

2002 17.73 219.42

4.3

1.12

66.29 Total Poultry 94.27

50.30

1. T exa s1

.66

.7%

%

1.14

a6

Top Ten States 58.3% 18,189

18.

67.64 Total Poultry 94.31

51.23

.70

om

3. Missouri 6.6% 4. N ebra ska 6 5.

S. .2% Da ko ta 5.3 %

1. T exa s

67.50 Total Poultry 93.86

52.66

ah Okl

1. N

76.73 2001 17.53 212.59 Total Red Meat 118.33

66.69 Total Poultry 89.17

1.16

2.

10. N .D 9. Iow akota 3.1 a 3.1% % 8. Kentucky 3.3%

76.96 Total Red Meat 120.65

51.46

.80

All Other States 42.7% 13,021

do 3 9. Wisconsin .0% 3.8% 8. S. Dakota 4.1%

2000 17.35 214.96

65.70 Total Poultry 88.67

10. C olora

76.31 Total Red Meat 121.99

47.83

1.08

4.9% s 5.2%

1999 17.55 215.84

1.01

sota

72.04 Total Red Meat 120.10

1.16 1.09

% 5.0 as ans 6. K 4.8% ntana 7. Mo

1998 17.67 209.81

67.13 Total Poultry 87.36

nne

71.38 1997 17.29 204.30 Total Red Meat 115.63

48.33

6. Texa

69.18 Total Red Meat 117.72

9%

1996 18.19 205.09

Beef Cows (000) Head

.99 1.15

66.58 Total Poultry 85.56

owa 8.

67.91 51.72 Total Red Meat 120.45

4. I

1995 17.64 206.01

Top 10 Cattle Numbers

.6%

All Other States 15.2% 2.002 U.S. Total 13,067

In a world full of nails, bring the hammer.

When long lists of chores stretch out in front of you, hit them head on with some big muscle.

That’s where the 6M comes in. It’s the mid-spec utility tractor built to stand toe to toe with big jobs on hardworking beef and dairy operations.

No complaints, no quitting, no slowing down.

Get up to 10,696 (4850 kg) pounds of hitch lift capacity, a maximum of 30 gpm (113 lpm) of pressure and flow compensated hydraulic power that cycles heavy loads fast, and a heavy-duty, full-frame chassis designed to lift, load, and carry the toughest stuff out there.

More power.

More getting work done.

The 6M.

The rugged 6M. Available in 110 to 195 engine horsepower. With three transmission choices – including the CommandQuad™ – and the option of cab, open station, 2WD and MFWD. Talk to your dealer about getting more done with America’s Tractor.

JohnDeere.com/6M

Live Canadian Imports Fed Steer/Heifers

2001

Cows/Bulls

2002

Fed Steer/Heifers Cows/Bulls 102,587

775,827

374,421

- Fed Steer/Heifers - Cows/Bulls

2004

Fed Steer/Heifers Cows/Bulls 132

2005 2006

Fed Steer/Heifers 319,372

Cows/Bulls

2003

828,321

229,772

310,241 704,248

Fed Steer/Heifers

- Cows/Bulls

806,947

Fed Steer/Heifers

2007

Cows/Bulls 17,641

2008

Fed Steer/Heifers

Cows/Bulls

2009

Cows/Bulls

2010

537,293

Fed Steer/Heifers 213,229

611,789

Fed Steer/Heifers 227,467

Cows/Bulls

Fed Steer/Heifers Cows/Bulls 190,873

2011

637,623

198,663

406,412 415,499

Fed Steer/Heifers Cows/Bulls 260,022

2012

347,625 376,390

Fed Steer/Heifers Cows/Bulls

2013

Fed Steer/Heifers Cows/Bulls

2014

Fed Steer/Heifers Cows/Bulls

2015

213,711

Fed Steer/Heifers Cows/Bulls

2016 0

377,395 345,786 294,489

308,554 260,875

50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 650,000 700,000 750,000 800,000 850,000

Feed and Grain

8 7 6

Barley Wheat $4.96 $5.50 Corn $3.40 Sorghum $2.68

5 4 3 2 1 0

2001

2002

Barley

2003

Sorghum

2004

Corn

2005

Wheat

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Feeder Imports Canada

0 25K 50K 75K 100K 125K 150K 175K 200K 225K 250K 275K 300K 325K 350K 375K 400K 425K 450K 475K 500K 525K 550K 575K 2002

2003

Mexico

0 100K 200K 300K 400K 500K 600K 700K 800K 900K 1,000K 1,100K 1,200K 1,300K 1,400K 1,500K 2001

2002

2003 – – – – – –

2004 2004 2005 2005 2006 2006 2007 2007 2008 2008

2009

2009

2010

2010

2011

2011

2012

2012

2013 2013 2014 2014 2015 2015 2016 2016

0 25K 50K 75K 100K 125K 150K 175K 200K 225K 250K 275K 300K 325K 350K 375K 400K 425K 450K 475K 500K 525K 550K 575K Washington Idaho Montana Other States U.S. Total North Dakota

0 100K 200K 300K 400K 500K 600K 700K 800K 900K 1,000K 1,100K 1,200K 1,300K 1,400K 1,500K Arizona New Mexico Texas U.S. Total California had no imports.

Millions of pounds 2800 2700 2600 2500 201 2400 2300 2200 2100 587 2000 1900 1800 1700 1600 1500 1400 1300 918 1200 1100 193 1000 1 52 900 800 239 700 227 109 600 1 17 500 58 106 1 400 12 660 56 660 300 586 464 200 333 100 0 2003 2004 2005 2006

Exports Mexico Canada

961 794

810

738

879

781 465

528

152 271

351 531

671

662 538

363

339

391

759

2007

455 319

449 449

389

586

Others 301

671

456

274

78 159 159

253 305

277

141

231

628

2008

2009

S. Korea

722 380

500

500 500

488

2010

2011

Japan

467 467

468

352 352

403

2012

2013

364

656

324

308

435

363

394

2014

2015

2016

2,518 Million 460 Million 697 Million 1,145 Million 1,434 Million 1,996 Million 1,935 Million 2,300 Million 2,785 Million 2,452 Million 2,590 Million 2,573 Million 2,266 Million 2,550 Million Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds

Imports

Millions of pounds 3700 3600 3500 3400 3300 3200 3100 3000 2900 2800 2700 2600 2500 2400 2300 2200 2100 2000 1900 1800 1700 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 0

768

327

913 428

686

19

645

729

27 564

888

49 1092

740

2004

663

2005

844

2006

88

99

789

841

2007

2008

473 107

792

63 63

1062

66

44 888

65

2003

50

517

527

900

1129

597 190

508 41

1118

350

363

89

566 100

189

219 310

178

495

526

242

252

452

655

861

2009

2010

493

689

2011

1083

1258

139

104

Mexico New Zealand

392

767

624

125

812

613

457 155

Nicaragua Australia

661

603

16

313

216

645

Canada

111

101

91

537

538

602

628

718

2012

2013

2014

2015

2016

3,006 Million 3,679 Million 3,599 Million 3,085 Million 3,052Million 2,538 Million 2,626 Million 2,298 Million 2,057 Million 2,220 Million 2,250 Million 2,947 Million 3,370 Million 3,016 Million Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds Pounds

Others

Cattle Inventory by Class - States and United States - Jan. 1, 2016 and 2017 Beef cows That Have calved Milk Cows That Have Calved

State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming United States

2016 2017 (1,000 head) (1,000 Head)

Percent of Previous Year

2016 2017 (1,000 Head) (1,000) Head

Percent of Previous Year

673 693 103% 7 7 100% 4 4.7 118% 0.3 0.3 100% 180 184 102% 195 196 101% 893 914 102% 7 6 86% 600 655 109% 1,770 1,755 99% 772 805 104% 148 155 105% 6 5 83% 19 19 100% 2.5 2.5 100% 5 5 100% 905 908 100% 125 122 98% 505 497 98% 85 83 98% 73 74 101% 2.2 2.4 109% 503 500 99% 587 600 102% 396 387 98% 94 93 99% 196 210 107% 184 185 101% 940 965 103% 210 215 102% 1,488 1,570 106% 142 150 106% 1,021 1,023 100% 59 57 97% 442 448 101% 13 12 92% 10 11 110% 30 30 100% 43 43 100% 49 47 96% 6 6.5 108% 12 11.5 96% 108 120 111% 412 425 103% 350 370 106% 460 460 100% 500 476 95% 10 9 90% 1,902 2,052 108% 88 88 100% 1,486 1,486 100% 14 14 100% 1,852 1,920 104% 58 60 103% 217 220 101% 28 30 107% 4.5 5 111% 14 13.5 96% 7.5 7.5 100% 7 6.5 93% 415 465 112% 315 325 103% 110 110 100% 620 620 100% 363 370 102% 47 45 96% 904 954 106% 16 16 100% 284 288 101% 266 262 98% 1,923 2,095 109% 37 35 95% 524 546 104% 126 124 98% 170 185 109% 530 525 99% 1.5 1.4 93% 0.9 0.8 89% 175 170 97% 15 15 100% 1670 1664 100% 110 116 105% 886 909 103% 44 41 93% 4,290 4,460 104% 460 490 107% 325 338 104% 95 92 97% 13 14 108% 131 129 98% 629 643 102% 91 87 96% 223 225 101% 277 275 99% 201 207 103% 9 8 89% 270 290 107% 1,280 1,280 100% 704 714 101% 6 6 100% 100% 30,166 31,210 103% 9,310 9,349

Beef Production

Carcass Weights 830

2,800

820

824.90

810

2,700

800 790

2,600

780 2,522

2,500

770 760

2,400

750 740

2,300

730 720

2,200 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

700

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Per Capita Spending

700

$690.49

650 600

Beef

550

Pork

500

Broilers

450 400

43.58% 44.37% 45.11% 45.09% 46.40% 46.22% 46.06% 45.19% 44.98% 45.54% 46.30% 45.63% 46.58% 47.06% 47.00%

Total % Beef

350 300

$319.08

250 200

$189.59 $170.29

150 100

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Steer Prices

2002 $101.83 - 8% $84.42 - 9% $67.28 - 7% 2003 $109.73 + 8% $92.85 + 10% $83.92 + 25% 2004 $129.61 + 18% $110.33 + 19% $84.44 + 1% 2005 $140.08 + 8% $117.76 + 7% $87.66 + 4% 2006 $138.50 - 1% $115.33 - 2% $85.97 - 2%

2007

$92.66 + 8% 2008 $122.86 - 6% $105.61 - 5% $92.71 0% 2009 $115.93 - 6% $100.66 - 5% $83.20 - 10% 2010 $131.05 + 13% $113.78 + 13% $95.42 + 15% 2011 + 20% $157.42 $137.76 + 21% $114.83 + 20% 450 lb

Fed Steer

2012

2013

$185.23 0% $156.13 $125.86 + 2%

+ 1%

2014

$271.42 $223.24 + 23% $154.37

2015

60 80 100 120 140 160 180 200 220 240 260 280

650 lb

2016

+ 17% $183.73 + 13% $155.44 $122.93 + 7%

$130.30 - 6% $111.28 - 4%

60 80 100 120 140 160 180 200 220 240 260 280

2014 2015

+ 43%

+ 47%

+ 3% $280.39 + 2% $227.41 - 4% $148.27 2016 - 37% $176.01 $150.49 - 34% $120.74 - 19% 60 80 100 120 140 160 180 200 220 240 26 280

% Change from Previous Year

Cattle Herd Inventory 2002

35.75

38.22 Calf Crop

Total Cattle

96.72 42.24 Cows

2007

Calf Crop 41.78 Cows

Total Cattle

96.57

2008

2003

37.59 Calf Crop 42.13 Cows

36.16

Total Cattle

96.10

2004

37.26 Calf Crop 41.51 Cows

Total Cattle

2005

37.11 Calf Crop 95.02 41.68 Cows

Total Cattle

2006

37.02 Calf Crop 41.81 Cows

Total Cattle

96.34

Total Cattle

96.03 41.69 Cows

35.94

94.40

Calf Crop

2009

Calf Crop 41.13 Cows

35.74

35.56

Total Cattle

94.72

2010

Calf Crop 94.08 40.53 Cows

Total Cattle

2011

Calf Crop 92.89 40.06 Cows

Total Cattle

34.47

39.52 Cows 33.73

2002 2003 2004 2005

Calf Crop

2007

2009 2010

Hides

2011 2012

By Products

Total By Product 47% of Total Total By Product 48% of Total

Hides

2013

Total By Product 51% of Total

Hides

2014

Hides

2015 2016

Hides 0

2

Total By Product 50% of Total Total By Product 48% of Total Total By Product 46% of Total

Hides

4

6

8

10

12

14

Total Cattle

93.58

Total Cattle

Total Cattle

30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Head (million)

Total By Product 50% of Total

Hides

91.92

2016 Calf Crop 40.56 Cows

Total By Product 48% of Total Hides Total By Product 43% of Total Hides

2008

Total Cattle

2015

39.48 Cows 35.08

Total Cattle

2014

34.02

Total By Product 64% of Total Hides Total By Product 56% of Total Hides

2006

2013 Calf Crop 90.09 38.85 Cows Calf Crop 89.14 38.61 Cows

Total By Product 61% of Total Hides Total By Product 66% of Total Hides Total By Product 59% of Total Hides Total By Product 61% of Total Hides Total By Product 61% of Total Hides

2001

91.16

33.52

30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Head (million)

30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Head (million)

2012 Calf Crop

16

UPDATE ON THE MARKET Continued from page 35

slaughter in 2017 were up significantly, partly due to a larger herd size but likely also indicating a slowdown in heifer retention. Nevertheless, the ratio of steer to heifer slaughter remains very high indicating that heifer slaughter remains at a relatively low rate consistent with continued herd expansion. The 2017 calf crop was likely 2.5-3.0 percent higher year over year, meaning that the pipeline of feeder cattle will continue to grow in 2018.

Feedlots will continue to place and market more cattle in 2017, and the relative rates of placements and marketings will determine how fast feedlot inventories grow. Aggressive marketings and increased feedlot turnover rates have been a key to managing growing cattle and beef supplies and will remain a key in the coming year. Nevertheless, average feedlot inventories are likely to build in 2018. Feedlots are expected to continue enjoying favorable feed costs with decent, if more modest, returns compared to early 2017.

2018 beef production is projected at a record level of 27.4 billion pounds. This is the result of cattle slaughter that is expected to increase another 3 to 3.5 percent year over year along with increased carcass weights following the decline in carcass weights in 2017.

International trade is expected to continue to be supportive of U.S. cattle markets in 2018. Beef exports are expected to increase modestly in 2018, reaching a record level. Growing exports to China could add to annual export totals in 2018 but are still expected to grow slowly in the coming months. Considerable uncertainty currently exists regarding beef trade, highlighted by the renegotiation of NAFTA and threats of withdrawal from NAFTA and the South Korean Free Trade Agreement (KORUS FTA). 2018 beef imports are expected to be down year over year or close to 2017 levels.

After adjusting for trade, a three-plus percent increase in beef production is expected to result in per capita domestic consumption of 57.5 pounds, up 1.8 percent

AVERAGE ANNUAL CATTLE PRICES Southern Plains

$ Per Cwt 275 250 225 200 175 150 125 100 75 50

1990

1992

1994

1996

1998

2000

500-600lb Steer Calves

2002

2004

56

NATIONAL CATTLEMEN

2008

2010

700-800lb Feeder Steers

Data Source: USDA-AMS, Compiled and Forecasts by LMIC Livestock Marketing Information Center

2006

2012

2014

2016

2018

Fed Steers C-P-06 08/28/17

DIRECTIONS 2017

UPDATE ON THE MARKET from 2017. This level of domestic beef consumption was last seen in 2010 in the U.S. Increased pork production, and steady broiler production will combine with beef to produce record total red meat and poultry production of

just over 100 billion pounds in 2018. However, per capita total meat consumption is projected to be up fractionally from 2017 with increased meat exports expected to absorb most of the increase in meat production.

BEEFMASTER

Ranked second, for both steers and heifers, in an 18-breed feed efficiency test conducted by the U.S. Meat Animal Research Center.

Steers ADG,DMI = 0.203

Heifers ADG,DMI = 0.096 BEEFMASTERS.ORG

PROVEN MATERNAL www.NCBA.org

PROVEN EFFICIENCY

PROVEN HETEROSIS NATIONAL CATTLEMEN

57

UPDATE ON THE MARKET Continued strong domestic demand supported by beef trade will be essential to minimize the price impacts of growing beef supplies in 2018. With decent domestic and international demand, supply pressures are likely to push cattle prices modestly lower in 2018, likely in the range of 3 to 6 percent below 2017 average

58

NATIONAL CATTLEMEN

levels. Increased beef production in 2018 and through 2019, at least, is certain given that calf crops will undoubtedly be larger until 2018. Lower prices are not necessarily a certainty depending on demand, though the more likely scenario is one of modestly lower or more sharply lower prices.

DIRECTIONS 2017

NCBA’s Cattlemen to Cattlemen is back with new episodes.

Tune in on Tuesday nights at 8:30pm EST on RFD-TV or visit the YouTube page www.YouTube.com/ cattlementocattlemen

Don’t forget to follow us on Facebook and stay updated with photos and details on upcoming shows.

STATE OF THE FEDERATION Eye on Quality

There is little question U.S. beef quality â&#x20AC;&#x201C; and the consumer perception of beef quality â&#x20AC;&#x201C; are improving.

More carcasses are grading USDA Choice and Prime (see Figure 1). Tenderness for steaks continues to be favorable (see story on page 65), and favorability of those steaks among consumers continues to be high. Consumers also rate fresh beef highly when it comes to beef safety.

Figure 1. Changes in Prime and Choice Combined Changes in Prime and Choice Over Timeover Time 80 80 71% 71%

Re s e a rc h Ad d s P re c i s i o n To a n I n d u st r y Fo c u s

Percentage

70 70 61% 61%

60 60

55% 55% 49% 49%

50 50 40 40

1991 1991

1995 1995

51% 51%

2000 2000 Year Year

55% 55%

2005 2005

2011 2011

2016 2016

Cattle producers are doing their part in the effort to emphasize quality through good breeding and thoughtful, careful and determined animal care practices, as well as conscientious transportation. Their work over the 60

NATIONAL CATTLEMEN

DIRECTIONS 2017

STATE OF THE FEDERATION and bulls. Based on the past 25 years has been Table 1. Quality Challenges - Ranked according to priority results of the in-plant assisted by a checkoff1991 2005 2016 and interview research, funded research effort External Fat Traceability Food Safety beef industry participants called the National Beef Seam Fat Overall Uniformity Eating Satisfaction at a December Strategy Quality Audit (NBQA), Overall Palatability Instrument Grading Lean Fat and Bone Session focused on three which regularly provides Tenderness Market Signals Weight and Size areas: Food Safety and a set of guideposts and Overall Cutability Segmentation How and Where

Cattle Were Raised Animal Health, Eating measurements to help Marbling Carcass Weights Visual Characteristics Quality and Reduction determine the quality of Variety, and Optimizing Value and Eliminating Waste, conformance of the U.S. beef supply, both for steers and allowing them to focus proposed actions on industry needs. heifers, and for cows and bulls.

The 2016 NBQA provided another piece of evidence of the industryâ&#x20AC;&#x2122;s determined focus on quality.

Multiple Assessments The 2016 NBQA delivered data and information through industry-wide face-to-face interviews, extensive in-plant research, and a strategy session attended by individuals representing every sector of the beef industry, who considered the results and discussed implications. Each of the elements contained helpful insight into those issues that impact how those in the beef supply chain and consumers view quality.

In the face-to-face interviews with supply chain participants, food safety was a quality factor. Many respondents, in fact, said it was implied as a requirement of doing business. Other issues included size consistency of carcasses, eating satisfaction and an unfamiliarity with Beef Quality Assurance (BQA) among packers, processors, retailers and food service operators interviewed.

Separate in-plant research efforts were conducted at harvest facilities that process steers and heifers, and cows

www.NCBA.org

Like those in the face-to-face interviews, session participants were committed to creating greater education and communication of BQA and the principles it champions to the supply chain and consumers. They said increased certification of those who follow BQA practices could enhance respect for both the program and the industry.

Industry Opportunities Each NBQA identifies lost opportunities for the industry, suggesting areas producers and others could make improvements to increase profitability. Precise calculations are difficult, but total lost opportunities for 2016 and previous audits, adjusted to 2016 prices, provide guidance as the industry looks for areas of improvement.

This research demonstrates the beef industry has spent the last quarter century significantly improving the quality of its product. While thereâ&#x20AC;&#x2122;s always room for improvement, data also show that those in the industry have a valuable story to tell. Utilizing BQA to increase consumer confidence and enhance industry commitment could encourage greater beef demand, improve industry harmonization and benefit every audience.

NATIONAL CATTLEMEN

61

STATE OF THE FEDERATION Steers and Heifers – Changing Priorities NBQA in-plant research for the steer and heifer market began in 1991. Initially, NBQA researchers focused on physical attributes, such as marbling, external fat and blemishes. Many of the efforts addressing those attributes have seen positive results.

industries are varied, and it is important the industry understand the factors that lead to improved quality and minimized economic losses in this important component of its beef market.

As with its NBQA for steers and heifers, the industry has conducted in-plant research through its Beef Checkoff Program to assess the quality status of this Table 4. Lost opportunities in quality issues for NBQA - 1991, 1995, 2000, element of the beef chain regularly over the 2011 and 2016 (using 2016 prices) past two decades. The National Beef Quality

2016 2011 2005 2000 1995 1991 Audit for cows and bulls, managed by NCBA as Quality Grade -$15.75 -$30.44 -$26.62 -$29.66 -$33.23 -$33.14 Yield Grade -$12.91 -$5.93 -$15.60 -$15.53 -$10.20 -$22.19 a contractor to the beef checkoff, is a robust Carcass Weight -$10.88 -$6.41 -$4.46 -$3.44 -$5.68 -$4.52 look at ways the industry raises cows and bulls Hide/Branding -$0.84 -$1.95 -$1.90 -$2.39 -$2.67 -$2.43 for beef and brings them to market. Through Offal -$8.68 -$2.57 -$2.63 -$2.82 -$1.59 -$0.99 this research the industry seeks to assure Total -$49.06 -$47.30 -$51.21 -$53.84 -$53.36 -$63.28 the lives of these animals reflect the highest industry standards for beef stewardship and production.

In fact, the 2016 NBQA found that the number of blemishes, condemnations and other attributes that can have an impact on animal value remain small, and industry efforts to address these issues since 1995 have been generally encouraging. In-plant research also showed the incidence of bruising was higher in the 2016 study than in 2011, but the severity of bruising was less.

Fewer cattle had brands, and horns were less prevalent.

The mobility of cattle going into the harvest facilities was excellent: 97 percent of cattle walked easily and normally, with no apparent lameness. Almost none of the hanging carcasses (0.5 percent) had visible injection site lesions – of particular interest, since injection site lesions were among the most critical issues when the audits were first conducted in 1991.

Before 2016, the most recent Cow and Bull Audit had been conducted in 2007. The research conducted in the most recent study shows the industry is making progress.

Overall, the 2016 NBQA for cows and bulls demonstrated there has been progress made in the sector since 2007, including noticeable improvements as the animals entered the harvest facilities. This included better soundness of animals, a reduction in injection site lesions through the years, and an increased percentage of cattle that had no visible defects.

The research also suggested future research should be focused on: • Appropriate management of cull cows and bulls to increase muscle condition before harvest;

While the size of carcasses has increased, there has also been a significant increase in the frequency of USDA Choice and Prime carcasses. The majority of carcasses qualifying for Select were in the top half of the grade.

Cows and Bulls – Often Overlooked Cows and bulls are the foundation of our cattle herds.

More than that, though, cull animal sales in the industry now contribute up to 20 percent of operational gross revenue for both beef and dairy operations. The reasons to market breeding animals for beef in the dairy and beef 62

NATIONAL CATTLEMEN

Figure 2. Frequency Distribution of Cattle that were not Lame Beef Cows Beef Bulls Dairy Cows Dairy Bulls

100

Percentage

A review of instrument grading in the 2016 NBQA provided results similar to grading observed through in-plant research, giving confidence to the increasingly prevalent use of instrument grading in the industry. The trends echoed those seen in 2011.

• culling animals before physical defects are too severe and cause animal welfare concerns or carcass condemnation; and

80

60

40

1994

1999

Year

2007

2016

DIRECTIONS 2017

STATE OF THE FEDERATION • ways to eliminate carcass bruising on the farm, in transport and at the packing facility.

The full NBQA executive summaries for steers and heifers and for cows and bulls, along with more information about the 2016 NBQA and previous audits, can be found on the Beef Quality Assurance website at www.bqa.org.

Additional emphasis in extensive education and beef quality assurance programs can further propel the momentum of the cow and bull industry.

v

State Councils Join in Jerky Day Celebration

The Beef Checkoff Program identified a novel way to help celebrate Beef Jerky Day June 12, with some powerful support from state beef councils. That day, state beef council staffs delivered beef jerky bouquets created by the beef checkoff to news personalities at television outlets in many of the country’s top media and consumer markets in their states.

The bouquets, in custom “Beef. It’s What’s for Dinner” vases, were delivered to 115 television stations in the top 30 U.S. markets and others. They were accompanied by beef information that included tips on how beef jerky is the “ultimate snack hack” for consumers.

The project allowed the industry to help promote a powerhouse protein snack in a unique and promotable way. Beef jerky is a popular, low fat and high-quality protein that has many benefits, and the bouquets provided broadcasters with something fun and interesting to talk about on air.

The partnership between state beef councils and the Beef Checkoff Program gave the councils another opportunity to communicate with their target media outlets, and was a win-win for state beef councils and the entire beef industry. With the constant demand for content, and the increased noise in the media, it’s helpful to have innovative, creative pitches that increase the visibility for beef.

The national beef jerky letter to media representatives included five reasons beef jerky is the ideal snack hack, including: 1. It helps fuel kids through the final bell, keeping them attentive and ready to learn; 2. It helps you avoid the workday slump, as a healthier salty snack option; 3. It gives unexpected post-workout benefits as “nature’s protein bar”; 4. It’s a fun way to help kids celebrate a win or rebound from a loss, stamping out “hangry”; and

5. It lets you stay lively on the hiking trail. www.NCBA.org

NATIONAL CATTLEMEN

63

STATE OF THE FEDERATION Maintaining Favorable Tenderness Ratings

Favorable tenderness ratings for beef steaks, which have improved significantly since 1990, have remained steady over the past five years, despite environmental and financial challenges that could have derailed its progress. The ratings were confirmed by the beef checkoff-funded 2015/2016 National Beef Tenderness Survey, which was conducted at Texas A&M University.

The checkoff-funded research has surveyed beef tenderness regularly since 1990.

Potential challenges to beef quality over the past ten years, including drought, fluctuating supply and rising input costs, could have put tenderness gains in jeopardy.

Nevertheless, the tenderness of the beef being produced in the United States has not only remained steady, but often improved. The research suggests the industry continues to deliver to consumers when it comes to tenderness.

Results from the first survey, conducted in 1990, found significant tenderness issues with cuts from the chuck, round and sirloin. Over the next 15 years tremendous improvements in tenderness were realized. Results from the 1999 survey showed a 20 percent increase in tenderness, while a 2005/2006 survey showed an 18 percent improvement over 1999 â&#x20AC;&#x201C; and 34 percent improvement over results in 1990, with most steaks evaluated as tender.

64

NATIONAL CATTLEMEN

Reasons for the improvement included increased aging time, longer and slower chill rates and more branded programs at retail. In 2005/2006, about 47 percent of retail cuts were marketed through branded programs designed to guarantee certain quality traits, including tenderness.

While fewer branded products were surveyed compared to a decade ago, results from the 2015/2016 survey found that, as with the 2010/2011 survey, most steaks were considered tender. Warner-Bratzler shear force values, an objective measure of tenderness, were consistent with values noted five years ago for ribeye, top blade, top loin and sirloin steaks. Similar to previous surveys, the 2015/2016 survey indicated a need for more industry focus on tenderness and increasing the overall rating for cuts from the round. Because the survey shows rounds are sometimes not aged sufficiently, and consumer understanding of the different cooking methods necessary for round cuts is limited, enjoyment of cuts from this primal could be improved, the study suggested.

However, the research confirms that all cuts arenâ&#x20AC;&#x2122;t created equal. While they have a wonderful flavor profile, cuts from the round remain an industry tenderness challenge. Future focus by the industry could include a collective effort to utilize optimal DIRECTIONS 2017

STATE OF THE FEDERATION aging practices as well as more support for extensive consumer cooking education for round cuts.

With tenderness goals generally being achieved

Consumer Panel Panel “Overall “Overall Like” Like” Retail Retail Steaks Steaks Consumer NBTS NBTS2010/2011 2010.2011 and 2015/2016 Top Blade Ribeye, lip on, boneless Ribeye, lip on, Bone-in bone-in Top Loin, boneless Top Loin, bone-in T-bone Porterhouse Top Sirloin, boneless Top Round Bottom Round 4.5 4.7 4.7 4.9 4.9 5.1 5.1 5.3 5.3 5.5 5.5 5.7 5.7 5.9 5.9 6.1 6.1 6.3 6.3 6.5 6.7 6.9 6.9 7.1 4.5 6.5 6.7 7.1 2010/2011 2010/2011

2015/2016 2015/2016

across many cuts, additional focus and research could be placed by the industry on other quality traits, such as flavor.

Warner-Bratzler Warner-Bratzler Shear ShearForce ForceValues Values(to (tocut cutthrough throughmeat meatin in lbs. lbs.ofofpressure) pressure)ofofRetail RetailSteaks, Steaks,NBTS NBTS1990-2015/2016 1990-2015/2016 8.0 8.0 7.5 7.5 7.0 7.0 6.5 6.5 6.0 6.0 5.5 5.5 5.0 5.0 4.5 4.5

1990 1999 1990 1999 Ribeye, Ribeye, boneless boneless

2005/2006 2005/2006 Loin, Top Loin, boneless boneless

2010/2011 2015/2016 2010/2011 2015/2016 Top Sirloin, Sirloin, boneless, cap capoff off

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NATIONAL CATTLEMEN

65

STATE OF THE FEDERATION There are many checkoff-supported channels for helping communicate quality and other beef information to those in the beef supply chain who need it. Beef University, for instance – Beef U, for short – is a free online training program that is aimed at those who market beef to consumers and is focused on the latest information and research on marketing and selling beef. The checkoff-funded program was revamped for 2017, and captures the latest data and industry insights on key topics in a new, condensed, more userfriendly format.

Reaching Those Who Reach Consumers Beef Cuts AND RECOMMENDED COOKING METHODS CHUCK Blade Chuck Roast

Cross Rib Chuck Roast

RIB

LOIN

SIRLOIN

ROUND

OTHER

Ribeye Roast, Bone-In

Porterhouse Steak

Top Sirloin Steak

Top Round Steak*

Kabobs*

Bottom Round Roast

Strips

BAM

Blade Chuck Steak*

Shoulder Roast

Ribeye Steak, Bone-In

T-Bone Steak

Sirloin Steak

7-Bone Chuck Roast

Shoulder Steak*

Back Ribs

Strip Steak, Bone-In

Top Sirloin Petite Roast

Bottom Round Steak*

Cubed Steak

Chuck Center Roast

Ranch Steak

Ribeye Roast, Boneless

Strip Steak, Boneless

Top Sirloin Filet

Bottom Round Rump Roast

Stew Meat

Chuck Center Steak*

Flat Iron Steak

Ribeye Steak, Boneless

Strip Petite Roast

Coulotte Roast

Eye of Round Roast

Shank Cross Cut

Denver Steak

Top Blade Steak

Ribeye Cap Steak

Strip Filet

Tri-Tip Roast

Eye of Round Steak*

Ground Beef and Ground Beef Patties

Chuck Eye Roast

Petite Tender Roast

Ribeye Petite Roast

Tenderloin Roast

Tri -Tip Steak

BRISKET

PLATE & FLANK

Chuck Eye Steak

Petite Tender Medallions

Ribeye Filet

Tenderloin Filet

Petite Sirloin Steak

Brisket Flat

Skirt Steak*

Country-Style Ribs

Short Ribs, Bone-In

Sirloin Bavette*

Brisket Point

Flank Steak*

GRILL OR BROIL

STIR-FRY

SKILLET

* MARINATE BEFORE COOKING FOR BEST

B e e f A lt e r n At i v e M e r c h A n d i s i n g p r o g r A M

The course was developed for supply chain partners by NCBA, a beef checkoff contractor, to provide training and professional development resources on such topics as raising beef, nutrition and health, beef basics and cuts and the modern consumer. In a nutshell, the program educates and trains employees on marketing and selling beef, with the understanding that an informed and knowledgeable staff – particularly those who interact directly with consumers – leads to improved customer service and more beef sales.

SLOW COOKING

ROAST

Short Ribs, Bone-In*

SKILLETTO-OVEN RESULTS

These cuts meet the government guidelines for lean, based on cooked servings, visible fat trimmed.

©2013 Cattlemen’s Beef Board and National Cattlemen’s Beef Association All lean beef cuts have less than 10 grams of total fat, 4.5 grams or less

of saturated fat and less than 95 milligrams of cholesterol per 3½-oz

For more information on this market-building program, go to www.beefu.org.

serving. Based on cooked servings, visible fat trimmed.

v

Fund Fuels Projects to Boost Beef Demand

Established in 2006 by the Federation of State Beef Councils as a “state helping state” program, the Federation Initiative Fund invested $48,895 in fiscal year 2017 through its Federation Initiative Fund to assist state beef councils in areas of the country with high consumer populations. Nine state beef councils conducted nine projects that focused on Team BEEF, enhancing consumer influencer outreach or hosting immersion events highlighting nutrition and health, culinary, beef communications or production.

The chart below shows the Councils and programs that were funded.

State Program Arizona Gate-to-Plate Tour Series California Beef Leadership Summit Indiana Indiana Team BEEF Kentucky, Michigan and Ohio

#BLOG MEETS BEEF 2.0

New York Individualized Influencer Immersions New York Beef Corp NY and MBA Spokesperson Development Training Pennsylvania Team BEEF Promotion and Events Pennsylvania “Beefing-Up” the Beef and Veal in the Classroom Program Virginia Running with the Marine Corp Marathon 2017 66

NATIONAL CATTLEMEN

DIRECTIONS 2017

STATE OF THE FEDERATION Dear Fellow Producers, The quality of the beef in the consumer meal experience has always been important to U.S. beef producers. Thanks to the Beef Checkoff Program, the industryâ&#x20AC;&#x2122;s commitment to quality has taken on an even greater sense of value over the past 25 years.

Because of checkoff-funded research, for instance, we as an industry are concentrating on attributes that consumers seek. We are doing a better job of identifying qualities that result in improved consumer satisfaction, enhanced industry practices and increased demand for beef, all the way from conception to consumption. This includes research to determine best practices for raising and caring for beef animals, as well as studies on the resulting products, such as tenderness, safety and proper cooking times for appropriate cuts, among others.

Those efforts, many of them managed by NCBA as a contractor to the Beef Checkoff Program, are making a difference, and it shows. The percentage of cattle grading USDA Choice and Prime is higher. Tenderness is improving. Research shows consumers are increasingly confident in the safety of, and happy with, the beef they buy.

The process of producing high quality beef that is valued by consumers, which can lead to greater beef demand, takes years. It starts in the genetic selection and careful breeding of animals. Handling and feeding play a part, as do environment and transportation. How we treat the product through harvest and processing, and what we do to make sure those in the beef supply chain and consumers purchase, store and prepare it properly, are also crucial.

Federation Executive Committee: Chair

Jerry S Effertz, ND

Vice-Chair Dawn Caldwell, NE Region I

Bill Sexton, OH

Region II

Mark Pendleton, NC

Region III Katie Brenny, MN

Like all checkoff-funded programs, the quality-focused research, education and promotion efforts funded with your checkoff dollars stress results. We hope you find value in this information about what the checkoff has done to research beef quality and its relevance to consumers; to boost beef quality as consumers see it; and to show how itâ&#x20AC;&#x2122;s helping all of us improve in our efforts down the road.

Yours truly,

Region IV Weldon Wynn, AR

Jerry Effertz Velva, North Dakota Chairman, Federation of State Beef Councils

Rev. Seat Jaret Moyer, KS

Region V Dan Hinman, ID Region VI Lucy Rechel, NV Region VII Barb Downey, KS Rev. Seat Bradley W. Hastings, TX Rev. Seat Buck Wehrbein, NE

Federation members on the 2017 Beef Promotion Operating Committee are: (back row, left to right) Scott McGregor (Iowa), Buck Wehrbein (Nebraska), Brent Buckley (Hawaii), Gary Deering (South Dakota), Steve Hanson (Nebraska); (front row, left to right) Jerry Effertz, Federation Chair and BPOC Vice Chair (North Dakota) Dawn Caldwell, Federation Vice Chair (Nebraska), Kristin Larson (Montana), Laurie Munns (Utah), and Clay Burtrum Oklahoma).

www.NCBA.org

NATIONAL CATTLEMEN

67

STATE OF THE FEDERATION The Consumer ’s Take on Quality

Quality means different things to different people. That’s why it’s important for the Beef Checkoff Program to understand the ins and outs of not just quality, but the people looking for it.

Knowing what the consumer wants, and how they go about purchasing it, is at the heart of beef checkoff consumer research and marketing efforts. The research is conducted by the checkoff’s market research team at NCBA, a contractor to the Beef Checkoff Program, using a variety of surveys and data-driven consumer behavior and attitude research tools.

Safety Grades for Fresh Beef Year by year percent of Americans rating A or B grade for safety 100 91% 88% 90 83% 87% 84% 87% 84% 86% 79% 76% 77% 76% 80 74% 83% 84% 79% 76% 80% 80% 77% 75% 70 69% 66% 60 60% 66% 64% 50 40 30 20

10 0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2014 2015 2016

Fresh Beef Steaks/Roasts

Source: IPSOS Public Affairs

Steak Satisfaction Trends Ratings of steak satisfaction improved significantly in Sept. 2016 at that relatively high, and statistically stable, level through May 2017 Noteably, the mean scores in May 2017 are up directionally vs.

March 2017

These surveys show that beef 4-5 Stars Mean is making strides in the eyes of 90% 86% consumers. For instance, checkoff80% funded Consumer Beef Index (CBI) 4.23 4.43 4.35 research shows that beef performs well on key quality attributes July ‘16 Sept. ‘16 Nov. ‘16 important to those who eat beef.

Base (204-272) Almost 90 percent of consumers say beef is great tasting as well as a great source of protein. A checkoff-funded steak satisfaction tracker supports this, showing in a current survey that 90 percent of consumers say they were very satisfied with their recent beef eating experiences.

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Fresh Ground Beef

86%

89%

90%

4.39

4.39

4.53

Jan ‘17

March ‘17

May ‘17

Significantly different than prior period

Consumers surveyed in the 2016 CBI who say they are planning to consume more beef give their reasons as: • They prefer the taste (85 percent); • They want to add protein to their diet (77 percent); • They believe there is better availability of cuts (76 percent); and • They say beef is more of a family favorite (73 percent).

The checkoff-funded Beef It’s What’s For Dinner Culinary Center develops and shares a number of instructional brochures, fact sheets and videos on the BeefItsWhatsForDinner.com website and social media platforms to help consumers understand how to select and prepare the perfect cut for the right occasion – and data suggests these efforts are working.

According to the 2016 CBI:

• 79 percent of consumers say it is easy for them to pick the right cut of beef; • 78 percent says that beef delivers good results consistently; and • 83 percent say they know how to prepare beef well.

DIRECTIONS 2017

STATE OF THE FEDERATION Responding to the Cattle Markets In fiscal 2017 the Federation of State Beef Councils stepped up in response to a frustrating cattle market, dipping into its reserve funds to support national and international promotion programs that would help increase demand for beef. The Federation allocated more than $1.2 million from its reserve funds during the year for this effort, conducted during a time of high protein production that put significant pressures on the cattle market.

Many state beef councils contributed additional funding to promote the campaign to consumers in their markets.

They helped drive traffic to the app and create broader visibility for beef. The total value of the Ibotta campaign is estimated to be more than $4.4 million.

One of the efforts was a campaign by NCBA, a contractor to the Beef Checkoff Program, to drive nationwide sales of fresh beef at retail. That promotion is based on a program called Ibotta, a mobile shopping app with a subscriber rate of 22 million mostly-millennial consumers.

The partnership gave consumers the chance to engage with educational information about beef and then unlock a small cash-back rebate for any ground beef product at any store, nationwide. The Beef Checkoff Program paid for the rebates of verified sales.

A significant part of the Federation allocation was an international promotion conducted by the U.S. Meat Export Federation, another checkoff contractor, which helped move more than a million incremental pounds of beef in Japan and Korea. The effort included a push to have chilled U.S. beef replace Australian beef at all Costco outlets in Korea â&#x20AC;&#x201C; which came to full fruition in May 2017. This was accomplished through USMEF trainings, sampling demonstrations, regular visits and meetings to build relationships, and more. It means an incremental increase of over 33 million pounds, which will increase the total U.S. market share in Korea by about 3-4 percent.

Results from the effort significantly surpassed standard Ibotta campaigns. The redemption rate for ground beef was nearly 40 percent; the average Ibotta redemption rate is 23 percent. More than 1.45 million consumers unlocked the beef rebate and saw beef content, such as videos, recipes and messages, and more than 576,000 redeemed the rebates. In just four weeks more than 631,000 pounds of ground beef were sold.

Funds for this effort came from state beef council boards that voluntarily remit part of their half of the $1-perhead beef checkoff to be used at the national and international levels. Recognizing that states with high beef production donâ&#x20AC;&#x2122;t always have large population centers, state board members understand the benefits of spending checkoff dollars where most beef consumers live.

www.NCBA.org

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Beef It’s What’s For Dinner UPDATE Beef It’s What’s For Dinner; An Iconic Brand for Today’s Consumers

www.NCBA.org

Twenty Five years ago, an iconic consumer brand was launched. Featuring celebrity voices and Aaron Copland’s famous Rodeo score, the checkoff-funded “Beef. It’s What’s For Dinner” campaign burst onto the consumer stage in 1992 with a force that immediately pushed beef to the forefront of consumer advertising and onto the dinner plate.

Throughout its history as one of the top commodity food brands, the campaign has evolved as part of the primary promotion program funded by the checkoff. To celebrate its 25th anniversary, NCBA, as a contractor to the Cattlemen’s Beef Board, has refreshed and relaunched the brand through a modern campaign that is relevant to today’s consumer.

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Beef It’s What’s For Dinner UPDATE The new “Beef It’s What’s For Dinner” campaign for the first time will package promotion of the product with the promotion of the people who produce it.

Consumer research earlier this year showed that even though the advertising campaign has been funded at lower levels over the past decade, the brand still holds tremendous equity. And, whether people recognized the campaign or not, the idea is powerful and it does a great job of communicating many key messages, including: • Beef is a substantial meal that fills people up.

• Beef brings families together around the table.

• There are many ways to serve beef at dinner.

• A beef dinner is worth looking forward to.

People in the research study happily discussed that “It’s What’s For Dinner” is a powerful declarative statement, not a mere suggestion, staking it’s claim at the top of the food world. With the focus on dinner as the showcase meal of people’s day, people still understood that beef is still appropriate for lunches or snacks.

With today’s push for transparency, people are intrigued to learn more about who is behind the campaign messages. People reacted positively to the stories of the beef farmers and ranchers who funded the campaign and how they produce safe and nutritious beef.

The research made it clear that telling the whole story of beef is an opportunity to build broader engagement with today’s consumers, thereby leading to more beef purchases.

So, starting this month NCBA will launch an effort to promote: the delicious taste and desirability of beef and the pleasure it brings to meals; the people who produce beef; and beef’s position as a powerful protein for today’s consumers’ active lifestyles.

To reach consumers, opinion leaders, foodservice and retail partners and the media, the campaign will tell the story of beef through a new consolidated website, BeefItsWhatsForDinner.com, that for the first time includes not only information about the different beef cuts and how to prepare them, but also nutrition information and information on how beef is produced from real farmers and ranchers.

information in the hands of consumers wherever and whenever they want it. Providing beef preparation information on Amazon’s Echo or Facebook Messenger using robot platforms will help consumers overcome one of the biggest hurdles to including beef in their meal choices, “How do I cook this?”

In addition, a new logo has been created that emphasizes beef far more than before and will be prominently display across all promotion, consumer and industry information materials to make producer checkoff dollars go further in the market place.

A centerpiece of the campaign is a new video that tells the beef production story from cow-calf, to feeder, to the packer, to the consumer by showing the modern use of technology in today’s beef business. The 90-second video, located on BeefItsWhatsForDinner.com and title “Rethink the Ranch,” emphasizes the care that beef and cattle producers take to produce a safe and wholesome product. The video will be promoted through a national digital advertising campaign. For audiences that want to learn more about beef production, interviews with farmers and ranchers will highlight how beef is produced using resources responsibly.

And for those who can’t visit a farm or ranch in person, NCBA has utilized the latest in technology to provide a virtual tour of farms and ranchers using digital platforms to further educate consumers about beef production.

Later in the campaign, new advertisements celebrating beef’s unique qualities as a protein source will launch, appealing to consumers’ genuine love for beef.

Rebranding the “Beef It’s What’s For Dinner” campaign will connect the heritage of an iconic brand with the desire of today’s consumer to know how their food is raised, how to prepare it and trust that it is good for them and their families. The repositioning of “Beef It’s What’s For Dinner” will help to ensure that the brand stands the test of time for another 25 years.

The use of new AI (artificial intelligence) technology, will provide consumers and retailers tools to put preparation 72

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DIRECTIONS 2017

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