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Beef Research Money Tied to Record Low Cattle Population

America's cattle numbers are lower than ever, but safety research hangs on

Beef lovers, you might want to make sure you’re sitting down.

In 2013, the population of cattle in the U.S. hit its lowest point since the 1950s.

It might not look like it from the line at the fast-food drive-through, but America’s herd size has actually been in decline since its peak in 1975, when 132 million cattle grazed on American pastures – or at least munched corn on American soil.

Today, the number is down to about 89 million, a gradual 33-percent drop from the peak over the past 38 years.

At the same time, beef prices continue to rise. Just over the course of 2011, the average cost of beef rose by more than 14 percent, mainly to offset the collective toll taken by droughts, rising feed prices, loss of farmland, an aging farmer population, and falling beef consumption. From 1980 to 2012, per-capita U.S. beef consumption declined from 76.6 pounds to 57.4 per year.

But while America may not be in any immediate risk of a hamburger famine, the size of the country’s cattle population does have an impact on more than just beef prices.

Through a program called the Beef Checkoff, the size of America’s cattle herd also directly influences the amount of money available for marketing, promotion and research within the beef industry. Every time a cow is sold down the production chain (ranch to feedlot, feedlot to slaughterhouse, etc.), the Checkoff collects $1 into a general industry fund.

Part of that money, in turn, is used to fund a variety of research on beef, including food safety. In theory, fewer research dollars might translate into fewer studies on the most pressing current beef-safety issues, such as minimizing Salmonella contamination and levels of toxic E. coli in the gut.

So, is money for beef-safety research drying up? Is beef at risk of becoming any less safe? Food Safety News wanted to find out.

The short answer to both those questions is no. In fact, industry spending on research appears to remain relatively consistent, while other areas of spending, such as promotion, have tapered off.

That’s likely because, after deadly outbreaks in the 1990s and record-setting recalls in the early 2000s, the industry sees its success relying on the perception of beef as a safe product, said Polly Ruhland, CEO of the Cattlemen’s Beef Board, which oversees the Beef Checkoff program.

“We know that safety is the price of entry for our customers,” Ruhland told Food Safety News. “If we don’t have safety, we don’t have anything.”

Beef Checkoff program takes a hit, but not as big as expected

The Cattlemen’s Beef Board (CBB) has been operating since 1988, accruing $1 every time beef, dairy or veal cattle change ownership, no matter how many times that occurs between birth and slaughter. Grass-fed cattle may only change ownership once, while others might change hands five times or more.

From each dollar, 50 cents goes to the local state’s beef board, while the other 50 cents goes the national CBB. The money is intended to promote and support the beef industry in a generic way that doesn’t reference any particular beef producers. (Think of the marketing slogan, “Beef: It’s what’s for dinner.”) Commodity checkoff programs exist for other food industries as well, such as almonds, eggs, and popcorn.

According to the CBB, that money specifically gets used for activities such as promoting U.S. beef in foreign markets, “working to continue growth in beef demand,” and investing annually in beef-safety and product-technology research. A few years after the Jack in the Box E. coli outbreak of 1993 and the subsequent USDA declaration of E. coli as an adulterant in ground beef, major players in the industry agreed not to turn beef safety into a competitive issue and instead channel major safety research through the Checkoff program.

Money for research projects is doled out by the CBB to bidding researchers at industry organizations such as the National Cattlemen’s Beef Association and the North American Meat Association.

In 1988, the U.S. cattle population was at 116 million, meaning it has fallen 25 percent since the Checkoff’s first year of operation. But the money hasn’t fallen nearly as drastically as the herd.

Total revenue for the Checkoff was $46.9 million in 1988. In 2012, it still reached $42.1 million. (Granted, calculating for inflation, the 1988 revenue was worth $89.6 million in 2012 dollars.) Revenue peaked in 2000, with $49.7 million.

So why doesn’t revenue correlate to population?

The Checkoff money has been boosted, thanks to cattle imports and the fact that droughts and rising feed prices – two factors contributing to cattle declines – means that more cows are sent to slaughter who would otherwise be culled to produce more steers and heifers.

The trend of culling fewer cows should reverse in 2014 when some droughts are expected to relent, Ruhland said. But that means there will be fewer cattle available for beef in the interim. Imports may make up for the culled cows in that time as well.

“Frankly, imports have saved our bacon the last few years,” Ruhland said.

Beef safety spending

Over time, spending on research has significantly increased in proportion to the total revenue of the Checkoff. In 1988, research took up $700,000 compared to $46.9 million in revenue.

Research spending hit its peak in 2008, at $7.9 million against $44 million in revenue. In 2010, 2011, and 2012, the Checkoff spent about $5.7 million on research annually. That’s up from the $3.8 million spent in 1994, the year E. coli O157:H7 was declared an adulterant in ground beef.

Of course, safety research is just one portion of the total research budget. Ruhland said that, for the past 10 years, beef-safety research has taken up an average of 22 percent of the total research budget, which translates to about $1.25 million in each of the past three years.

Spending varies by year according to the promise of a given research project. But that $1.25 million has to cover projects across multiple bidders.

A cursory glance at the numbers shows that, while research spending is still just a fraction of spending on promotion, the gap has narrowed considerably over the years, with promotion dollars taking most of the brunt of declining revenue.

What is that safety research money spent on?

Historically, the majority of safety research has focused on fighting E. coli, said Dr. Mandy Carr Johnson, executive director of research at the National Cattlemen’s Beef Association. Recently, more focus has been given to Salmonella, following ground beef recalls tied to that bacteria.

Beyond safety, the research budget also funds product quality research on juiciness, flavor, and nutrition. More recently, the Checkoff has started putting money into sustainability research, Johnson said. Findings are shared across the industry.

“If one company is hurt, the whole commodity is hurt,” she said.

Individual companies may do their own additional research beyond the Checkoff program, Johnson added.

Not everyone agrees with Checkoff spending

A fundamental problem with the Checkoff program is that it provides money to organizations that undertake both research and policymaking ventures, according to Bill Bullard, CEO of R-CALF, the largest producer-only trade association in the U.S. cattle industry.

“R-CALF’s position is that the Checkoff funds should not flow to any policy-oriented organization, such as R-CALF or the National Cattlemen’s Beef Association (NCBA),” Bullard told Food Safety News. “It’s currently being used, either directly or indirectly, to fund political agendas.”

While many members of R-CALF supported the Checkoff when it was proposed in 1986, the industry has shrunk and become vertically integrated at an “alarming rate,” he said.

Over the past 25 years since the Checkoff was created, the industry has lost about 12,000 cattle workers per year, according to Bullard, while production has stagnated.

“We don’t think we have received value for the money contributed to the Checkoff,” Bullard said. “We believe the funds have been used to facilitate efforts by meatpackers to capture control of the beef supply through vertical integration,” meaning the industry is moving toward systems in which a single company controls each step of the supply chain – from birth to growing to slaughter.

In March 2013, USDA’s Office of Inspector General (OIG) released a report following an investigation into the Beef Checkoff program regarding the alleged misuse of around $200,000 in Checkoff funds for NCBA corporate expenses. The OIG report eventually concluded that the Checkoff managers and the industry organizations receiving Checkoff funds had complied with the law. However, the OIG also determined that USDA should strengthen its oversight of the Checkoff program.

But Bullard and members of R-CALF weren’t buying it.

“The OIG report exemplifies the despicable cronyism that pervades the relationship between the USDA and the meatpacker lobby, which latter group is represented in the OIG report by the National Cattlemen’s Beef Association,” Bullard wrote in a letter to Agriculture Secretary Tom Vilsack dated April 5.

Bullard went on to urge USDA to suspend the NCBA from receiving Checkoff dollars, or revise the Checkoff rules so that no lobbying groups were eligible to contract for Checkoff funds.

Those recommendations have not been adopted. The 2014 Checkoff budget includes $4.6 million for research, of which $1.3 million, or 28 percent, will be allocated to beef-safety research.

Graphs use data from Beef Checkoff annual reports and USDA’s National Agricultural Statistics Service.

© Food Safety News
  • Russell La Claire

    Is this drop in beef cattle being seen elsewhere in the world? Or, is this unique to the U.S.?

  • Mike_Mychajlonka_PhD

    It is nothing less than extraordinary that “A few years after the Jack in the Box E. coli outbreak of 1993 and the
    subsequent USDA declaration of E. coli as an adulterant in ground beef,
    major players in the industry agreed not to turn beef safety into a
    competitive issue and instead channel major safety research through the
    Checkoff program.” The major driver behind research of any kind is to develop products and processes that are better, faster and/or cheaper. If beef safety is not to be a competitive issue then exactly what do these “major players” think is going to drive improvements in beef safety, which Ms. Polly Ruhland claims is so important? In any case, for an operation the size of the American beef industry, a research spending rate of $1.25 million per year actually seems pretty anemic, rather than “major.” Perhaps that explains the meat industry’s “Just Cook It” dogma, which seeks to blame the consumer for getting sick from meat contaminated with pathogens of various types. This brings up the business of the very significant fall in per capita meat consumption, from ” . . . from 76.6 pounds to 57.4 per year.” Does the meat industry seriously believe that this market shrinkage occurs because Americans are becoming vegetarians? My own view is that consumers sufficiently mistrust the safety of the food products offered them at retail that they direct their spending elsewhere. This loss of potential market (and profit) is tremendous. A meat supplier willing to make beef safety a competitive issue will, I think, find a willing public anxious to buy his product over that of the “major players” who have cynically determined not to turn beef safety into a competitive issue. After such a “food safety competitor” eats their lunches, the “major players” mentioned above may not be so major any more.

  • flame

    Sounds fantastic that beef herds are declining. The methane gas that beef cattle give off is staggering and detrimental to the environment, just like the body waste both solid and liquid that’s often times run off into the waterways of this country. On top of all that and more including the safety of consumers who eat this countries beef. Until all beef cattle can be tracked from farm to feedlot then slaughterhouse and onto the the supermarkets, restaurants, and peoples plates the consumer will never know where the beef they eat and/or feed their loved ones has been. Total tracking will enable guardians of the consumers safety to tell where the source of contaminated beef has been. Also they need to stop using a mixture of hundreds-thousands of cows in ground beef. Cattle for human food are also treated inhumanely and dosed with all sorts of chemicals.

    • 12345

      you sicken me. it is not fantastic in anyway that the herds are declining. You do not know what really is going on with the slaughter houses. PETA and other organizations try to find the worse evidence they can to dis the beef industry. In all reality you need the beef industry, without it our population you fail. with the decline of the beef industry many farmers are going completely broke. you may not know the trials us farmers face everyday. Its a love hate relationship, I understand big corporations may not be totally distraught over a lost calf or cow but their are those of us who that is our life, its our world. We love, feed and take the proper steps to keep out herds healthy. if you have a problem with the beef industry how about you go out and buy some cattle, you find the joys and discomforts of farming. Maybe then you will see. Also you can trace your darn food right to where it came from, if that is what it take to make you happy.

    • invalidnametwo

      And we can presume than, you’ll be standing with the communists when they demand, and, “pole vault” over the heads of an unwilling people, their, “anti-farting” legislation?
      If you only could see how ridiculously ignorant you sound.
      The only way to correct the problems caused by corporate farming ventures, is for small timers to start telling the Feds where to shtick all their anti-natural, safe food promoting via regulations, threats to small farmers, etc.. After which, the time will come for a return to local supply chains of “unregulated” and therefore, “real” beef, that requires no research on, “how to “make it juicier” or any of the other mentally ill “non-science” issues these idiots think need to be carried out.
      BEEF, in stores today, tastes exactly the crap government regulation, demands be put in it, just like, tobacco today, is much more deadly than unadulterated – unregulated, tobacco in the stores. Is it any wonder young people don’t eat as much beef? Why should they? Did you realize, thanks to our communist government’s interference, we have entire generations of young people (now) that have NO clue what “real” beef tastes like? And you’re worried about their farts? I propose we enact a LAW that says, every liberal who’s for reducing cattle or any other, methane producing animal production, MUST equip their bodies and homes with bio-gaseous detection and collection systems, thereby, eliminating their “fart print” within the ecology of the earth they claim to be so worried about? And with that, a requirement of LAW, they drive cars that run off their waste. Then we’ll give that twenty or so years, and see how many blathering hypocrite liberals remain.

  • cow mister

    cows r freakin awesome