Cows are not Chickens

A lot of regular readers check-in on this blog whenever something strange in the cattle industry pops-up in the mainstream news media.  Since we here at YM read the trades ...so YOU don't have to ...it's time to talk about Zilmax.

Zilmax or zilpaterol is a drug administered to cattle at feedlots ...and you may be glad to know that Argentina does not allow it.  The US feedlots, of course, love the stuff.

What popped-up in the press recently was the fact that US meatpackers do not like Zilmax ...and recently took steps to ban cattle from feedlots that use it.

Giant commercial cattle operations fighting giant commercial cattle operations ...gotta be a story there!

Well, here's the skinny on fat Zilmax beef cattle:

The drug makes cattle fatter faster with less feed.  It also has a reputation for making beef even less tasty than feedlot beef already is.  Even worse, it is said to make tender cuts like steaks tougher.

But if you're a feedlot operator, more-faster-cheaper ...is gonna beat "better" every time.

Feedlots, however, don't sell to consumers ...they sell to meatpackers.  Meatpackers sell to consumers who might (or might not) take offense at less tasty, less tender sirloin ...especially at a time of very high beef prices in the supermarket.

So, as you might imagine, meatpackers were slow to accept cattle that were tougher and less tasty ...but eventually all of them had to accept Zilmax-treated cattle because EVERY feedlot started to use it.

What made the news about a month ago was that a major US meatpacker back-tracked and informed the feedlots that it would no longer accept such cattle.

I didn't write about it at the time because ...hey, I've been a little lazy ...and I was a little suspicious.

I have no great love for meatpackers OR feedlots ...and I couldn't quite swallow the story that meatpackers were cutting-off Zilmax feedlots simply because they wanted to provide the public with a higher quality product.

As it turns out, a major beef publication (We Read the Trades so YOU don't Have to!) published a story about meatpacker complaints that Zilmax treated cattle can't walk very well.

Since cattle walk most of the way through meatpacking operations ...it's important to the meatpackers that they walk well.  If they can't walk very well (or not at all) it slows down the production line.

Now THAT make sense.

Of course, the feedlot operators are screaming that without Zilmax their costs are going to go up and they will eventually go out of business (a pretty standard response from the industry.)  They are also howling that the walking problems are due to only a tiny few of feedlots that don't administer the drug properly (also a very standard response.)  And finally, "if everyone would just use the drug like Merck says in the instructions, we can all go back to making some money."

What's all that go to do with chickens?

The chicken industry has been driving the cattlemen crazy for years.

The centralization and drug regimen of the chicken producers have dropped consumer prices and increased profits tremendously.  (Almost the same thing with hogs ...which are getting more and more Zilmax everyday, too.)

Both chickens and hogs reproduce a lot!  Eggs everyday, litters of hogs every few months.

Cattle rarely give birth to more than one offspring at a time ...and the gestation period is just like humans: 9 months.  Add to that the months a newborn calf needs to nurse from its mother before he can be shipped-off to the feedlots ...and you can see why cattlemen are jealous of the others.

So cattlemen have been trying ANYTHING they can find or think of to get similar production out of cattle.  That is what has given us doped-up, anti-biotic filled, kill them before they drop dead, tasteless, tough, can't-walk cattle.

I guess you can't blame them for trying ...but nature has a brick wall for industrial cattle.

Taking the cowness out of cows has produced a pretty poor product.  WHO KNEW?

Argentines Continue to Eat Less Beef

Fine.
216 pounds per person in 1958 boggles the imagination.
135 pounds per person in 2009 was still the world record.
118 pounds per person for last year is still massive
...103 lbs, however, is the all time record (1920) and we´re on track for that this year.
(US beef consumption per person peaked in 1975 at 88 lbs. and probably stands at less than 70 today.)

Sure, there are lots of reasons you can point to for the decline: high prices, short supply ...not to mention the change to feedlot beef.

If you´re a beef producer like me, however, you have to wonder, "how low can it go?"

Are Argentines simply losing interest in beef?  How 'bout you?

Argentine Beef Exports Halved Again

(mla.com.au) Very tight beef supplies and high retail prices in Argentina contributed to a 51% year-on-year fall in exports during 2010-11, to 151,872 tonnes swt. Moreover, export returns jumped 63% year-on-year, to average US$6,471/tonne - easily the highest on record for the period.

With the higher Argentine beef prices, the largest falls in exports were recorded to lower priced markets. Exports to Russia fell 76% year-on-year, to 26,737 tonnes swt, accounting for only 18% of total shipments, compared with 36% of the total in 2009-10.

Israel became Argentina's main export destination in 2010-11, despite shipments slipping 9% year-on-year, to 27,530 tonnes swt. Germany was Argentina's third largest market, falling 13% year-on-year, to 25,172 tonnes swt.

Although shipments under the European 'Hilton' high quality beef quota rose 52% in 2010-11 (due to a delay in the allocation distribution in 2009-10 which hampered trade), Argentina still failed to fill its 28,000 tonne quota allocation for the past year, exporting only 25,536 tonnes swt.

Fresh Argentine Beef!

The Meatman

The Year in Argentine Beef 2010: Good Luck Finding Grass-fed Beef in Argentina; It´s All Feedlot Now.

This is astonishing news ...and I don´t blame you if you do not believe me... but your chances of finding real, grass-fed beef in Argentina are almost nil.

My most popular post of all time on this blog is this one from 2009: more than a year later, it receives hundreds of page views every month.

On facebook, there´s a lot of activity on another recent post regarding the state of Argentine beef, too.

Right now, as we speak (and eat) no one in Buenos Aires knows where to find a real cut of grass-fed Argentine beef ...anywhere ...at any price. 

In fact, the more you pay for a steak, the LESS likely it will be from anywhere other than a confinment operation (feedlot, cowshwitz.)

Confusing?  Yes, it is.

IF (and this is a big "if") your butcher or waiter or restauranteur CAN answer the question at all ...he will, most likely, tell you that the beef is "finished", terminada with corn.  That should indicate that a grass-fed animal was fed corn for a period before slaughter in order to gain weight and "improve" the meat. Problem is that the term "finished" has lost all meaning ...and Argentine beef has lost all its prized flavor ...and consumers have lost-out completely.

If a calf has EVER eaten a blade of grass in its life, it is called "finished on grain."

"If I pay more, can I haz real Argentine beef like 5 years ago?"  Answer: nope.

In fact, the tonier the venue, from big supermarket chain to Puerto Madero restaurant, your chances of diving into a thick hunk of grass-fed beef become even less likely.

Full disclosure:  real Argentine beef is not for everyone ...especially yanquis.  Anyone raised on good ol' Iowa Corn-fed Beef is liable to have had problems with steaks in Buenos Aires.  What Iowa calls "tender", we call "mushy."  What we call "flavorful", they call "gamey."  What they might call "savory", we call "greasy."

I´ve always praised the occasional honest foreigner for saying that they simply do not enjoy Argentine beef; there is enough of a difference that the two groups don´t generally overlap very much.

With locals, there seems to be a different dynamic.  Along the lines of yanquis and their own particular national patrimony, cheap gasoline.  The attitude here seems to be "if I can fill my belly readily and relatively cheaply, everything is cool.  Corn-fed beef for Argentines could be having an additional effect: the meat is less chewy and has some tasty fat, something that grass-fed beef could rarely provide and was prized among many.

When I first tasted Argentine beef, I was struck by a beefy flavor that I imagined my grandfather might have encountered in the US.  The question now is: will Argentines come to miss the flavor that is within the living memory of everyone.

Now, it must be said that real Argentine beef still exists!  It´s just getting impossible to find on your plate!  My missus and I raise it, Frances Perry Pichon has neighbors that raise it, but if you were to seek it out ...it would be difficult, nigh onto impossible, to find.

Why?  Because the major chains have now have their own supply-chains ...and they rely on the dependable feedlot operations ...and their customers don´t seem to care or, perhaps, have forgotten the fabled taste of old.

The major restaurants sling big steaks (from those reliable sources) to customers who have rarely, if ever, experienced free-range beef ...they may not be amazed like tourists of old ...but the steaks are as good or better than the best back in Des Moines, etc.  As to their being worthy of writing home about, however, I think that they will only note that the enormous slab was cheap ...and the malbec was great.  Ho-hum beef could become a boon for the Argentine wine industry.

On the bright side, feedlot operations are struggling.  Their subsidies have petered-out and many of them borrowed heavily against those checks that never came.

As well, feedlots are experiencing a shortage of feeder cattle as the remaining ranchers become fewer and  either charge much more for beef on the hoof ...or begin to take advantage of the much higher cattle prices to fatten their cattle on their own grass.  But not every cattle rancher can afford to "skip a payday" and not sell to the feedlots that have become the only buyers other than the slaughterhouses.

Maybe more grass-fed ranchers can go to market directly, thereby increasing your chance of receiving a cut of beef like the old days.

Most probably, however, it will be much more "miss" than "hit" for seekers of the beef that made Argentina famous ...and only then in places far from Buenos Aires' Capital.

World Meat Congress In Baires, Tight Beef Supplies Are Hot Topic ...with audio!

The World Meat Congress!  Bet you didn´t know that existed.  I applied for press credentials ...but I never heard back.

The congress runs through Wednesday ...and I might just get an opportunity to interview an attendee tomorrow.

I´m sure there´s lots to talk about there.  CattleNetwork.com reports today,

"While the conference focuses annually on global trends in meat production and consumption, this year’s venue has specifically cast a spotlight on Argentina’s dwindling beef supplies – which are the result of severe drought and interventionist government policies that have hampered its beef industry’s ability to export. Daley says these circumstances are making grain farming much more attractive than ranching, contributing to a shift in this region’s land use. She adds that while it was the Argentine government’s intent to limit exports in an effort to keep domestic beef supplies plentiful and prices low, the policy has clearly backfired as resources have shifted, beef supplies have tightened and domestic beef consumption has declined sharply"

Wish them well, your beefy goodness could be at stake. (audio here)

Meat Porn

Meanwhile, back at the ranch ...our beloved Grupo Cambio Rural (Group for Rural Change) held another meeting in which we endeavored as always to keep the grand tradition of Argentine Beef ...while introducing the very latest and most modern production techniques.

Well, maybe it was the glorious weather ...or our gracious host-member taking his turn in the barrel of our constructive group criticism ...but we spent a little more time than than usual with meat and grape while furthering the cause of bringing you grass-fed goodness.

Eat yer heart out (all images clickable to enlarge):

Your Argentine Meat Team is in Big Trouble ...Beef in Argentina Today

All parts of the Argentine economy that produce beef are in big trouble right now ...and it´s not going to get any better for a long time.  It´s time for a long post!

Quality:
As I reported about a year ago in these pages, feedlot beef continues to increase its market share to the point where, this year, I have no idea where you can find a grass fed steak in Argentina.

If you like good ol' Iowa corn-fed beef, you're in luck!  If, however, you travelled 10,000km to have that chewy, screamingly beefy goodness ...I´m afraid you are too late.  Real grass-fed beef still exists in Argentina ...but the only way that I actually know that is because my missus and I still raise them.

We don´t get a higher price for them in the market, however ...so our lovely steers just go into the system and get sold side-by-side all along the chain with mushy, greasy, antibiotic laden feedlot beef.

I would like to report this year a percentage figure for feedlot beef ...but I can´t.  I simply can´t find anyone who is doing it anymore ...and I´m a rancher in the famous pampas with lots of rancher friends!

Quantity:
The number of beef cattle has shrunk by about 21% over the last 3 years.  OK, maybe it was too high to begin with ...but now, it´s too low.

"Too low for what?", you ask... too low to keep Argentina as the biggest beef eating nation on earth, too low to keep all the meat packing plants in business, too low to maintain exports, and too low to keep prices low.

Uruguayans are suspected to now be the beef eatingest people on the planet.  Argentinos who can afford it are still eating beef as usual.  Argentines who cannot (the vast majority) are having beef-less days ...long gone are the days of local construction workers building a lunchtime fire to roast beef ribs.

But pork and chicken production here has always been dwarfed by that of carne de vaca and doesn´t offer much of a low-cost alternative.  In fact, when the president mentioned the aphrodisiacal properties of pork, pig producers shuddered ...there simply are not enough pigs or chickens in Argentina to compensate for a major switch to other meats.

About 5% of meat packing plants here have shut their doors.  Many if not most of the other packers have reduced their output and workers.  Almost all of the plants are either up for sale or could be very soon.

With Argentine beef production down about 24% this year alone, there's just not enough cattle in the pipeline to keep the big plants working at an efficient level.  Smaller, more efficient plants might be indicated ...but who is going to invest big money in Argentine beef at this point?

Exports of beef today from Argentina are a catastrophe.  At the close of this year, Argentina will have exported half of the amount from 2009 ...maybe less.  That might make 2010 the worst year in Argentine history.  Who cares?  Maybe everybody on the planet that eats beef ...and maybe everyone in this country.

This is even today a very agricultural country ...and with more arable land per person than almost anywhere ...agriculture becomes more important to the world.  The resultant drop in euros, pounds, and dollars will affect everyone who both lives and earns here. 

Something to keep in mind:  there´s 2 kinds of beef exports.  Canned beef is one thing.  Fresh beef is another.  Soups, stews, corned beef, beef extracts ...even pet food ...is cheap and has a long shelf life.  Fresh cuts of beef... especially yummy steaks and roasts are another.

Much the way God created whiskey in order to keep the Irish from taking over the world, man created the Hilton Quota to keep Argentines from putting every other cattleman out of business.

20th century US cattlemen lived in dire fear of the capacity of Argentina becoming the world's low cost producer of fine quality cuts of beef.  To this day, fresh cuts of Argentine beef are not allowed into the US.

The Hilton Quota is a European tariff to spread the allowed amounts of imports across the great beef exporting countries of the world (most countries don´t have excess beef for export.)  When I first began ranching in Argentina, the cry here was for Europe to increase Argentina's share of that lucrative quota.  Today, Argentina cannot find enough cattle to even fulfill the amount allowed to her.

Due to the lack of beef available for export, Argentina is losing international customers to other countries.  Some of those customers will never come back.  That makes the possibility of a rebound in beef production here even less likely to occur for some time.

Price:
Prices are already at all-time highs.  My missus and I kept our cattle when everyone else was "gittin' out the cow bidness" more out of spite than good business sense.  We simply refused to sell at firesale prices during the time when it seemed that everyone was getting out.  We were lucky;  we had the resources to refuse.

We now receive about 3 times more for cattle on the hoof than last year ...only because we have cattle and almost no one else does.  That encourages us to continue to raise traditional grass-fed Argentine cattle to full market weight.

Those prices are not transmitted directly to the supermarket, though.  We ranchers have been sucking it up for years.  Now, the meatpackers are lowering their profit margins.  Your local butcher or supermercado has been making less income from the sale of a steak for a long time because he doesn´t want to scare you off permanently from buying beef.  Restauranteurs have a bigger price margin ...so their prices are not 3 times much as a year ago.

How long can this last?
I´ve said that we can expect this ...and worse ...for the next 3 years.  That´s probably because I can´t see farther than three years!  A recent university study here, though, says that cattle production won´t recover for 10 years.

It takes a lot of time and money to rebuild a herd of cattle.

Even worse, converting pastureland to crops is very easy compared to converting cropland to cattle pasture.

To change your pasture to crops only takes a tractor, a lot of chemicals, and widely available and affordable seeds.

To change your soybean field to cow pasture, however, means grass-seed that is just as expensive as soy-seed ...passing up a harvest season of soy ...and having to buy cows that are already terribly expensive due to the cattle shortage.

In short: not gonna happen.

What´s gonna happen, then?
Since I´m apparently in the prediction mode, I´ll try my hand at the future:  cattle producers will attempt to rebuild their remaining herds as best they can with their limited resources and their uncertainty.

Some cropland in Argentina will go out of production because some of it was never very suitable for crops in the first place.  That land will go back to natural pasture (full of weeds) ...or could be sown with seeds of natural pasture grasses on a risky, expensive bet that current owners of cows will come to rent it for grazing.

Some cropland will go back to both pasture and cattle ...if their owners are willing to buy expensive pasture seed, very expensive cows and bulls, and wait until calves are produced.  That scenario will take lots of money, time, and balls of titanium.  All in short supply nowadays.

In the meantime, cattle producers like my missus and I will enjoy prices unheard of in Argentina ...at least until people stop eating so much beef here, until Argentina's export markets dry up, until so many meatpacking plants close that we have to slaughter them ourselves for sale (against the law.)

What could happen, however, is that two market streams could develop:  one for feedlot cattle (that´s not going to go away) ...and another for the famous traditional Argentine grass-fed beef.  That might reward those ranchers that keep the great national patrimony enough to keep it going.

As it is, even my missus and I could still be persuaded to get out of the cow bidness.

We´ll see.

"Let them eat meat – but farm it properly"

by George Monbiot 
guardian.co.uk

"In Meat: A Benign Extravagance, Simon Fairlie pays handsome tribute to vegans for opening up the debate. He then subjects their case to the first treatment I've read that is both objective and forensic. His book is an abattoir for misleading claims and dodgy figures, on both sides of the argument."

"There's no doubt that the livestock system has gone horribly wrong. Fairlie describes the feedlot beef industry (in which animals are kept in pens) in the US as "one of the biggest ecological cock-ups in modern history". It pumps grain and forage from irrigated pastures into the farm animal species least able to process them efficiently, to produce beef fatty enough for hamburger production. Cattle are excellent converters of grass but terrible converters of concentrated feed."

"Like many greens I have thoughtlessly repeated the claim that it requires 100,000 litres of water to produce every kilogram of beef. Fairlie shows that this figure is wrong by around three orders of magnitude. It arose from the absurd assumption that every drop of water that falls on a pasture disappears into the animals that graze it, never to re-emerge. A ridiculous amount of fossil water is used to feed cattle on irrigated crops in California, but this is a stark exception."

Read the review!  Buy the book!

Argentine Beef Overtaken by Mercosur Partners

By Marcela Valente

BUENOS AIRES, Aug 30, 2010 (IPS) - South America's Mercosur trade bloc is becoming established as the top world producer of beef, with 40 percent of the international market. But while in Brazil, Paraguay and Uruguay production and exports are growing, Argentina, the home of the legendary "asado" barbecue, is falling behind.

A report by the Argentine Ministry of Agriculture, Livestock and Fisheries, based on data from the United States Department of Agriculture, indicates that rising beef consumption in Asia finds Mercosur (Southern Common Market), with the exception of Argentina, well-placed to increase sales.

What happened to Argentina, which exported 770,000 tonnes of beef in 2004 and now exports less than 380,000 tonnes? Producers and local analysts attribute this mainly to the shrinking profit margin and to government restrictions on exports, introduced in 2006 in an oft-unsuccessful attempt to maintain price stability in the domestic market.  

Read more...

Weird times for cattle in Argentina

A little update on that beefy goodness we all love down Argentine way.

As I´ve mentioned before, prices for cattle on the hoof have more than tripled.  My missus and I got a first hand taste of that yesterday at an auction near our ranch.

It´s hard to figger what these buyers are planning for castrated calves that need a lot of fattening.  Sure, the bottom has fallen out of corn prices, so feed is cheap.  However, at the prices being paid, even with cheap corn, the prices they will need after fattening will have to be even more extraordinary ...or they will take a loss.  Most likely, they´ll be able to pass their costs along and we´ll all be paying even higher prices at the supermercado for beef that doesn´t taste much different from any other beef producing nation.

They´ll probably call it "grass-fed / grain-finished."  Yeah, right.

Or we could be looking at something new.

Many ranchers here have elected to get out of the cow bidness.  Not all have plowed up their pastures for corn and soybeans.  That leaves lots of grassland right now in Argentina with no crops and no cows.

If you have cows at this moment, you can find vacant pastures with lots of grass.  Once springtime comes, there will be even more luscious grass in those pastures ...the kind that fattens cows and calves deliciously.

The trick is actually having those cows.  If you don´t have them at this moment, however, it´s going to cost you to get into the game.

Maybe these buyers are trying to get into the game at the top of the market.  God bless them; anyway you look at it, though, it could mean more grass-fed beef at lower prices for consumers.

It will be interesting to watch.  Keep watching here.  I´ll try to keep you informed.