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In the Cattle Markets

Ag economist shares outlook for the future of North America’s
beef industry.

I had the pleasure last week to provide a joint talk with Ted Schroeder at the 2016 Beef Improvement Federation (BIF) Annual Meeting and Symposium.1 Our presentation sketched a broad vision of how the integrated U.S. and Canadian beef industry may look in 20 years.2 To set the stage for our assessment, we outlined comparative advantages in major global beef producers.

The key comparative advantages currently enjoyed by North America’s integrated industry include a strong trust and premium being placed on its grain-finished beef. The presence of sound and effective infrastructure spanning from physical assets like transportation networks and sophisticated processing facilities to intellectual expertise on issues including genetics and meat quality, along with legal property rights supporting investment, are additional global strengths.

Comparative disadvantages are equally important to assess and appreciate in analyzing any entity or industry’s future. The North American beef industry is not the lowest-price producer globally, reflecting differences in production costs not only relative to pork, chicken and other proteins, but also compared to competing beef systems around the world that are not as heavily focused on grain-finished production.

While these production-cost differentials may well adjust, they seem unlikely to shrink substantially. This reinforces the need to appreciate the fragmented nature of many inner-industry discussions and the associated partially effective coordination and signaling that occurs both vertically and horizontally throughout the North American beef industry.

One only has to examine debates around animal identification (ID) and traceability, proposed international trade deals, and generic advertising to appreciate this point and the associated challenges with pursuing immense economic opportunities with expected growing global beef demand during the next 20 years.

As noted in past articles specific to individual operations, identifying and effectively acting upon one’s comparative advantage is key for successful progression of any industry.

The core goal of this article is to have each reader pause and think critically about two things: (1) how the North American beef industry can best be positioned for success during the next 20 years and (2) how the individual actions of stakeholders throughout the industry can help (or inhibit) realization of this success. It is much more enjoyable, and arguably economically rewarding over the longer term, to work together and “build a larger pie to share” than to focus on getting the “largest slice of today’s pie.”

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Editor’s Note: Glynn Tonsor is associate professor in the Department of Agricultural Economics at Kansas State University.

1 A copy of the presentation is available at:

2 Given time constraints we did not outline points specific to Mexico but those similarly warrant appreciation given ongoing adjustments in their beef industry and the historic connection of both beef and cattle trade with the United States.

For Angus Media’s comprehensive coverage of the 2016 BIF Annual Meeting and Symposium, visit the Newsroom and the Awards pages of

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