Bap-Beef Advantege Proyect

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Friona Industries -- Producing for a Brand
Betty Jo Gigot, Editor and Publisher

President and CEO of Friona Industries James Herring oversees boththe customer feeding division and Hi-Pro Feeds. The two companies serve over 10,000 customers, including ranchers, farmers and stocker operators as well as packers and retail outlets. Their customerfeeding division, the fourth largest cattle feeder in the nation, consists of four feedyards with a one-time capacity of 275,000 head. They market 500,000 cattle per year and mill 1.2 million tons offeed.

Searching for solutions Herring views his company s place in the industry as a facilitator between the cow-calf and stocker sectors, and the packer who works with retail and foodserviceoutlets. Each of those sectors make decisions that affect the next segment in the chain. All have to make purchasing and marketing decisions and all suffer from lack of capital, understanding andinformation about the industry as a whole, Herring said. He also sees a lack of communication between feedlots, packers and retailers. Beef industry concentration is a fact of life for most segments, accordingto Herring. There are over 800,000 producers with an average herd size of 40 head, while the 50 largest companies in cattle feeding have 240 feedyards and 65 percent of market share. Five majorpackers have 85 percent of the market share and the big 10 in the retail chain share 55 percent of the market. Beef is dispersed to 240 million domestic consumers and, currently, nine percent is exported.Beef is a value equation, Herring said in a speech delivered to the Texas and Southwestern Cattle Raisers Association recently. The public loves our product, but they would value it more if it was moreconsistent, more cost efficient, more tender and more convenient. In 1995, Friona Industries started working on the Beef Advantage Project, an integrated program that involved procurement of cattle...