Be Alert and Adjust
By Terry Stokes, Chief Executive Officer of NCBA
This is a condensed version of the address given by Terry Stokes at the 2008 Cattle Industry
Convention
The cow/calf producer is not expanding. There are higher input costs, increased land
values and changing demographics. The feeding segment is changing its business model due to
over capacity. The packing segment is showing signs of contraction due to extended losses.
Input costs for all segments of our industry are increasing. Trade is well below expectations due
to limited trade with Japan and no trade with Korea, our two largest customers pre-2003.
Times of uncertainty require that we be alert and adjust.
We do have nuggets of success. Mexico is our No. 1 trading partner who purchased over
$1 billion in beef this past year. The value of these exports has increased significantly since
2003.
After 20 years of declining beef demand, we have seen growth. Consumer expenditures
for beef exceeded $70 billion which is a record. U.S. consumers tell us nothing compares to a
great beef meal. Why? We adjusted to what consumers want.
And this month, your Beef Checkoff Program launched new advertising that shines a
light on beef’s nutritional benefit, an important aspect in consumers’ every day meal planning.
The future for beef is bright, yet the decisions you have to make every day are colored by
an extraordinarily complex environment that is filled with trepidation and opportunity.
What does this mean for NCBA? We are you. We have experienced success:
 Increased membership revenue by 12.24% in fiscal year 2007 and 22% in last five years.
 Increased membership 8.37% in fiscal year 2007 compared to 2006. Membership now
exceeds 30,000.
 Launched Cattlemen to Cattlemen, a weekly television show, on RFD-TV. It is the
“favorite” cattle show on RFD-TV with a weekly viewership of 90,000 households according to
Neilson ratings.
 Expanded our Producer Education program resulting in a $2.1 million grant from USDA last
fall.
 Increased Product Council revenue 7.38% in fiscal year 2007 compared to 2006 and 67% in
last 5 years.
 Allied industry, in spite of consolidation, increased revenue in the last five years 57%.
 Put NCBA staff in the country to build relationships with our members.
 Increased state investments 136% in Year 2 of the Federation Initiative. This is a three-year
effort by NCBA to help high cattle population states support and fund beef councils and beef
promotion efforts in low cattle/high population states.
 We have entered into two key partnerships with Cabela’s and Caterpillar enhancing the
benefits we offer members.
But, we also feel the accelerating winds of change. Tyson’s closing of its plant in Emporia,
Kan., impacts you and NCBA. That plant harvested about 4,000 head per day. That daily
production represents $150,000 annually in lost Product Council and feeder revenues. For the
beef checkoff, the plant production represented over $1 million annually.
NCBA’s membership dues are based upon numbers of people and cattle. Neither is
increasing. Reduced capacity results in reduced opportunity and that is the impact on NCBA
from structural changes in our industry.
So, we, too, are evaluating our business. What will you, our members and stakeholders,
expect of your association in the future?
There are more issues; they are more complex, and they have more impact on your
business. Our industry needs a strong and leading trade association that plows the hard ground
for its members so it is easier for you to sow the seeds of a successful business.
More of the same will not answer the challenge of “more.” NCBA will adjust. We
intend to be the association that leads this industry into the future, that increases profit
opportunities for cattle and beef producers by enhancing the business climate and building
consumer demand.
We have 6 goals:
•
•
•
•
•
•
Serve as the definitive industry voice on cattle and beef issues
Provide services valued by members
Protect cattle and beef producers’ rights and freedoms
Defend and market beef domestically and globally
Achieve financial strength
Maintain strong producer leadership
We have defined three-year performance objectives to measure our progress toward these
goals:
•
•
•
Increase Policy Division reserves by $900K
Increase membership to 40,000
Reach the following financial targets:
* $5 million in membership revenue (dues and services)
* $5 million in non-producer revenue
* $5 million in NCF revenues
We have made progress but have a ways to go. Since 2003, total revenue for the Policy
Division has increased from $7.38 million to $10.2 million; membership revenue has increased
from the low of $2.8 million in fiscal year 04 to $3.55 million in fiscal year 07; non-producer
revenue has increased from $2.8 million to $4.53 million in five years. With the restructuring of
the National Cattlemen’s Foundation, we received our first multi-million grant for producer
education.
If we adjust, we will make a difference. Together we will create a beef industry that is
profitable, growing and sustainable for future generations. And be:
 An organization that is strong, innovative, and nimble to serve this profitable, growing, and
sustainable beef industry.
 An organization that engages its stakeholders to build ownership.
 An organization made up of the smartest minds in the industry who debate issues to create
the best solutions, who look to the horizon and not just across the fence, and who have a servant
heart at the core of all that we do.
 An organization that says that the way we do things today is not good enough for tomorrow
and is willing to adjust.
Be alert and adjust through strong fiscal management, strong leadership, and strong
partnerships. This, my friends, will be our legacy.