Sherrard: Sustainable beef industry requires leadership to overcome challenges

Because consumers think about as many as 15 to 20 issues as they are making decisions about beef, Rabobank Research Global Strategist for Animal Protein Justin Sherrard says, “It’s complicated.” 

While the issue isn’t an easy one to tackle, Sherrard comments that the beef industry also seems to lack a sense of urgency when it comes to addressing things like sustainability in the beef industry. 

Moving forward

“Who are the people, who are the organizations, who are the companies and who are the farmers that are setting the direction and giving us the confidence to turn issues upside down and say our issues aren’t threats, but they’re opportunities,” he asks, asserting that more leaders are necessary in the beef industry to set the direction of the beef industry for the future. 

“We have a great product, and we should all be proud of it,” Sherrard summarizes. “Lots of people are going to keep eating beef, the market is changing.”

As the market changes, the number and complexity of issues facing the industry will only continue to increase.

“We need to be ready for more change, too,” he says. 

Rabobank’s research shows that global beef production will only continue a steady trend upward in 2019, increasing by several percentage points.

“This is the continuation of a couple of years of growth, and we see more growth ahead,” Sherrard explains. “North America and South America are really driving progress and growth.” 

Driving issues

In the near-term, Rabobank has also identified four issues that drive the near-term future of the industry.

“Consumer confidence is high in most parts of the world in general,” Sherrard says. “Generally, we know that is a good thing for beef consumption.”

However, Sherrard says several markets may be reaching a point of protein oversupply, so consumer confidence is necessary to maintain prices. 

“This is something for us to just be aware of,” he explains. 

Further, though African Swine Fever outbreaks in China and parts of Europe only affect the pork industry, Sherrard sees potential impacts beyond just pork to include seafood, beef and other proteins, as well.

“Finally, if we think about it, we’re quite conscious of two cost of production issues that are starting to weigh in some markets,” he explains. “Feed prices in some markets are going up 10 to 20 percent, and for some commodities, they look like they might go up even further.” 

Labor costs are also rising, he says, which can impact farmers over both the long- and short-term. 

Long-term outlook

Into the next 10 years, Sherrard says generally protein consumption will continue to rise. 

“In southeast Asia, we’ll see a structural deficit where production will be below consumption over the next 10 years, and also, in China, consumption is rising and production can’t keep up with that,” he explains. “These are the key regions that are going to keep importing beef.” 

“It’s very important for us to understand where trade opportunities are in the future,” Sherrard adds.

Important industries

However, to realize impending opportunities, a spectrum of issues impact the outlook for markets, including trade, consumer preferences and competing products. 

Firstly, trade flow may be disrupted as protectionist strategies grow. 

“We should take this quite seriously,” Sherrard says. “The future of trade is not the last 10 years repeated.”

He continues, “Secondly, consumer preferences and the competitive responses in the retail landscape are huge issues that will shape the future of our industry.” 

As alternative proteins rise, Sherrard explains a slew of challenges also hit the industry. 

Beyond just competition for the center of the plate, Sherrard says, “The rise of alternative proteins impacts what people are eating and where it comes from. This is an issue we need to take seriously.”

Potential activity on greenhouse gas emissions – both in opportunities and threats facing agriculture, and the integration of technology in production, processing and supply chains will both “shake the outlook over the long-term.” 

Volatility

“But, make no mistake, it’s a busy world and an unpredictable world,” Sherrard comments. “The changes that we see are happening faster, and it feels harder to judge the future than it has in the past.”

Potential leaders in the beef sustainability movement, for example, could arise from a number of segments and areas in the world, he explains.

“Leadership requires us to look at a variety of issues and to spot the pathway through a barrier, to look at those issues from a glass half-full perspective and find a way to make it happen,” Sherrard continues. “It’s about finding the solution, working together, looking at issues as potential opportunities and building the solution.” 

He comments, “In this fast, unpredictable world, who shapes the industry? Our leaders do. They have the ability to flip problems to opportunities, draw others in and build the partners we need to be successful.” 

Making investments

Beyond just solving issues, Sherrard asserts that making investments in leadership to solve upcoming challenges results in positive outcomes for businesses. 

As an example, investments in leadership should be forward-thinking on issues which allows management of risk.

“Leadership brings with it the ability to maintain or grow access to markets by engaging with consumers in deeper and more thoughtful ways,” he continues, noting that engagement is a key factor in the industry’s future. 

He summarizes, “There is a key and compelling case for more people to step up in the beef industry.”

Sherrard spoke during the October 2018 Global Roundtable for Sustainable Beef Conference, held in Ireland. 

Saige Albert is managing editor of the Wyoming Livestock Roundup. Send comments on this article to saige@wylr.net.