A virus outbreak.
The perils for cattle ranchers, beef processors and retailers are many and can impact everything from the cost of feed to the price of a steak at the store.
Keeping a close eye on it all is Petaluma resident Steve Kay, editor and publisher of Cattle Buyers Weekly, a tiny publication with editorial offices inside the McNear building.
Although it’s just four pages, Kay’s newsletter is jam-packed with information about recent virus outbreaks at plants, mergers and acquisitions and comments from analysts Kay speaks with on a regular basis. He also frequently gives conference talks on industry trends and consults foreign governments, which keeps him jetting around the world.
“Nobody has ever attempted to look very closely at the financial and structural aspects of the beef industry, which generates $60 billion and contributes an estimated 6.5 percent to the country’s GDP,” Kay said. “It fuels much of rural America, which I think is very important.”
Kay, who is 63, started the publication in 1987 shortly after relocating to the United States from London where he was a journalist for Farmers Weekly, Europe’s largest agricultural publication. Today, his newsletter has more than 1,500 subscribers who are more than willing to shell out the $199 a year for the info they say is crucial to staying on top of a rapidly-changing industry.
“What Steve provides is ground-level information about the industry,” said Rosemary Mucklow, a director emeritus of the North American Meat Association, a trade association with offices in Oakland and Virginia. “It’s very current, he gives it with analysis, but doesn’t talk down to anyone...My Monday wouldn’t be the same without it.”
The biggest news in the beef industry over the past year has been the drought in Texas, Oklahoma and nearby states that reduced the total number of beef cows in the country by more than 900,000.
Another is the rising price of corn, which today hovers at more than $7 a bushel, three times higher than what it was a decade ago. The increase is spurred by Bush-era regulations that require a higher percentage of U.S.-produced ethanol to come from corn, resulting in less feed for cattle.
“The available supply of beef is shrinking as many ranchers can’t afford the price of feed and go out of business or retire,” Kay said. “This year, the average American will eat 54 pounds of beef, down from about 90 pounds of beef a year in the '70s, which has nothing to do with preferences.”
"They still want the taste of beef, but they are having to scale down to something cheaper, like ground beef, he said.
Kay’s office is packed with filing cabinets, cow sculptures and posters that are a testament to three decades of covering the beef business. But he has also lived it, having grown up on a cattle ranch in New Zealand.
There, young Kay developed a profound respect for animals and say that they existed for a purpose, he says.
Before heading off to school each morning, Kay milked the cows and fed the calves. Summers were spent shearing sheep and bailing hay alongside his father and brothers.
“I loved every minute of it, even if you had to go out in a rainstorm and rescue a calf,” he said. “To me it was a heroic existence.”
Kay eventually left the family farm and studied journalism. But he soon found a way to merge his two passions as he progressed in his career. He covered New Zealand’s meat industry for a daily newspaper, then moved to Europe where he focused on European and world dairy and meat industries.
“I just love conveying the essence of the business and what it looks like on a national, global basis,” said Kay. “I have a great passion for it…I love the people and its dynamics.”
But if you’re looking for tips on where to place your money, you best look elsewhere.
“I don’t advise or make forecasts,” Kay said. “All I do is try to be an honest broker.”
Know of someone interesting in the community who deserves mention on Petaluma Patch? Drop Local Editor Karina Ioffee a line at email@example.com