Raw materials, other issues covered at NAMP event

by Meat&Poultry Staff
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SCOTTSDALE, Ariz. – Attendees at the three-day North American Meat Processors Association Outlook Conference in Scottsdale, Ariz., were presented with an outlook for raw materials in North America by Steve Meyer, Ph.D. Founder & President of Paragon Economics on the second day of the event. Several key factors were outlined by Dr. Meyer that would affect the price and availability of raw products in 2011. Ethanol and biofuels – and the added cost created by diverted grains the feed supply – were discussed first.

“With as much as one-third of corn production being used for the ethanol industry, you can expect some pricing irregularities and spot shortages,” he said.

The Nov. 2 mid-term elections, the proposed changes in the Grain Inspection, Packers and Stockyards Administration (GIPSA), and mandatory price reporting also will be major factors. Attendees were also warned about the effects of mandated changes in how antibiotics can be used in animal agriculture, and the growing influence of the animal-welfare movement as important influences on supply next year.

“The ethanol business results in little or no profit,” he said, “and I wonder how a business with so much government backing can’t make a profit.”

Dr. Meyer added the drawdown on corn supplies created by increases in ethanol production will mean a battle for acreage between corn, soybeans and wheat. “We’ll probably see 200 bushel acreage in the next 10 years,” he said, “but we’ll need to fulfill demand.”

The supply of good quality beef may be the most effected by GIPSA rule changes. “The proposed rule states nothing can demonstrate an undue preference, but it doesn’t define what ‘undue’ preference might be,” he said. “We’re in effect overturning about 80 years of case law here. With it becoming much more difficult to justify paying premiums for higher-quality cattle, the real impact becomes homogenization. We’re stepping into legislation by regulation. It’s likely to lead to further verticalization.”

As Dr. Meyer saw it, the current problem in beef supply was large-scale defections by the small, part-time producers. “They’re liquidating because they need the money for other things,” he said.

Kay Johnson-Smith, executive director of the Animal Agriculture Alliance, presented “Insights into Consumer Views on Animal Welfare and Biotechnology.” She outlined how the animal welfare movement, originally fighting against the use of animals in research 20 years ago, has changed.

“They’re now working against animal agriculture,” she said, noting many of its proponents are now animal-rights people.

The movement has gained influence through the use of the Internet. Electronic communication has allowed what was once a small, almost unnoticed idea to spread and make a significant dent in public opinion, she said.

The increase in the number of vegan and vegetarian lifestyle-oriented books and the influence they’ve gained through media coverage, especially with the major afternoon talk shows, was covered by Johnson-Smith. “Understand that only about 3% of us are vegetarians or vegans,” she said, “but they are the well-funded and vocal when it comes to pushing their agenda.”

More than 400 groups have a combined budget in excess of $400 million, she said. “It makes them a powerful group of organizations capable of telling their story to a wide audience,” she added.
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