Beef is Arizona Agriculture's Largest Ag Commodity
Arizona’s beef industry typically leads our top agriculture commodities in the state. The most recent USDA calculation is no exception with cash receipts valued at nearly a billion dollars. So, it’s only appropriate to have a conversation about our leading ag industry and who better to talk with than Jay Whetten, owner of the 76 Ranch near Bonita in Cochise County and the current president of the Arizona Cattle Growers Association.
Also a member of Arizona Farm Bureau, Whetten lived in Mexico for more than 50 years. His father started as a cowboy working on different ranches in the State of Chihuahua until eventually building his own business. Whetten credits his dad’s increased knowledge of the industry and networking with other ranchers as invaluable to the success the family had later. “I had the privilege of working with him for more than 30 years,” says Whetten. “In this time, we witnessed breed trends, market changes and the necessity to produce more pounds per animal with higher quality yields. We worked together, along with my brother, Mark, to transition from the old-time idea of running cows to raising beef. My brother and I continue to learn and produce the best beef we can in the environment we live in.”
Part of an agriculture commodity panel during Arizona Farm Bureau’s Annual Meeting last fall, Jay Whetten (right) says the industry has transitioned from the old-time idea of running cows to raising beef. Pictured to the left is the diary industry’s Paul Rovey. Dairy is Arizona's second leading agriculture commodity.
After graduating High School in Colonia Juarez, Chihuahua, Whetten went to Eastern Arizona College for a year and then to the University of Arizona for a semester. “My father decided I could do more good at home than at school so I moved back to Chihuahua in January of 1976. We were busy, we took care of cow-calf operations and bought calves and pastured them. Apple and peach orchards were another venture. I also made horseshoes for a few years.”
In early 1994, a good friend asked Whetten to serve on the Chihuahua State Cattle Growers board of directors. During that time, U.S. cattle producers were pressured to address Bovine tuberculosis (bTB). At the time, USDA demanded to reduce, if not eradicate, the disease. Says Whetten, “A very large percentage of the disease came from Mexico and border States threatened to cease commerce with Mexico unless it was cleaned up. I was given the charge to begin an eradication campaign in Chihuahua and at the same time negotiate with USDA and Border States to keep commerce going. It was a valuable experience, I made a lot of friends and learned a lot.”
In the fall of 2008 Whetten and his family left Mexico. Described as an uneasy, tough time with much uncertainty the family felt like someone was looking out for them, because in the fall of 2010 they put a down payment on the 76 Ranch. “We have enjoyed immensely our time here along with the challenges that we face. Arizona is a fantastic place to live and work. Our son, Derryl, and his wife, Dejah, their two kids, Greysen and Charlie Jae, live here at the ranch with us. They make it possible for me to leave as I try to serve the industry.”
The Whetten family run mostly Black Angus cows, along with a few Red Angus, with an emphasis on total pounds produced and desirable carcass traits. “We are constantly learning, I don’t think we will ever get it perfect.”
Whetten and wife, Jennifer, are blessed with five wonderful children who have given them 16 grandkids. “Life has not always been easy, but it has certainly been worth it,” he explains.
In our conversation, I was curious about Whetten’s modern-day approach to managing a healthy herd of cattle and what makes Arizona special in the production of high-quality beef, certainly because of his global perspective having originally lived in Mexico. Plus, he gives us a real sense of how important the industry is to a hungry world.
Arizona Agriculture : Recently during the University of Arizona’s Water Resources Research Center’s “State of the Watershed” you said, “As ranchers, many years ago we used to run cows. Today we raise beef.” Talk about this.
Whetten : If Arizona ranchers are going to keep up with the massive growing global beef market, we have to analyze what beef products are in most demand and make efficient, intelligent and swift decisions on how we as Arizona ranchers keep our businesses profitable. Markets have changed dramatically which obligates us as producers to change our production practices. The United States of America now produces a record 222.8 pounds of meat and poultry per capita, per year, thanks to five years of bumper crop grains produced by American farmers. Acronyms, like NAFTA, TPP and others are bantered about, and retail giants such as Amazon are making moves to join the great grocery store wars we will see in 2018 by competing with the likes of Walmart, Sam’s Club and Costco. Protein giants like Tyson Foods and Seaboard Farms are building new modernized plants to accommodate the new “normal” increase in protein tons. The U.S. beef cattle herd has expanded by 12% over the last four years. My interpretation of these facts is that the stakes are high for the Arizona rancher and we have to move from the inefficient ways of the past to a new streamlined version of beef production that accommodates the voracious appetite we call demand, which is phenomenal.
Arizona Agriculture : If today’s beef industry is a dynamic, fast changing industry, what are key elements for Arizona’s ranching families to keep up with this pace?
Whetten : History teaches us that there are always opportunities in the beef business. It is essential for each Ranching operation to find those practices that could be implemented to create a more positive bottom line. In today’s world, information is at our fingertips. We need to use it, analyze it and implement the changes that are necessary to be able to maintain profitability. Talk to people who are having success, develop relationships with those who are involved in marketing, and work toward producing a product that meets today’s requirements. The folks at the end of the marketing chain set the standard, know what that is.
Arizona Agriculture : If our beef industry is so dynamic, what kind of market inflection points can we watch for, if any? In other words, are their obvious market challenges and/or opportunities to look for that might be standard or expected. To define inflection point, it’s that point in the market curve at which a change in the direction of the curve occurs, positive or negative.
Whetten : The American herd has expanded to near record numbers, and people I talk to discuss two possibilities for the near future. There are as many commodity forecasters out there as there are weathermen, and as we have seen in the past, few get it right. I certainly have no insight on what this year’s prices will be. One line of thinking is quite traditional which is a direct supply and demand formula that implies that as we begin to over-produce what the market can absorb, prices will back up. The other line of thinking is that prices are affected greatly by attitude and because of the strong economic policies implemented by President Trump, people will spend their extra money on beef and the increased demand will take up the slack. Also, we are seeing an improved economic attitude around the world that also translates into more demand for U.S. Beef. Inflection points in the market are difficult for a cowboy to understand, we need to become more familiar with them as an industry in Arizona. Hedging is a great tool, contracting your cattle is also. In the end, a quality product can always be marketed well.
Arizona Agriculture : Make comparisons with Arizona’s beef market and other regions of the country and even globally. Why is Arizona beef so special?
Whetten : Arizona is a wonderful place to produce beef. We have strengths in our weather throughout most of the state in that we don’t have the hay and supplement costs some other beef-producing states have. If we can get enough rain to get by, our input costs are generally on the low end of the national average. Our quality of product that we offer is on the rise and there is a greater demand for it now than there was in the past. Our down side is the fact that our beef cattle are exported to other states and the freight comes off from the price we receive.
Arizona Agriculture : Talk about our opportunities in the China markets, and as buyers what are they expecting from us?
Whetten : The China market is still in its infancy and has not yet shown a demand that is significant, but the potential is there and soon they will be a factor that increases the value in the market. One very important fact is that they buy what they want with the bells and whistles “they” want, not what “we” want. They are more concerned with birth place of origin, traceability, quality and other factors than cost. This market will grow but we will have to meet their demands, which we can.
Arizona Agriculture : What does the cattle industry in Arizona need to do differently?
Whetten : An Arizona rancher’s first concern is to assure a viable, profitable operation with an acceptable bottom line. Imagine yourself sitting on the front porch, in serious thought, with the experience that you have in the business and you design and plan the best production unit that you know how with the environment that you must work with that will meet the demands of the market now and in the future. Ranchers in Arizona have traditionally and notoriously been known for their expert ability to grit themselves though drought and water challenges of an arid state; feast or famine as they say.
If Arizona ranchers are going to be able to keep up with the massive growing global beef market that is growing at record pace, we must embrace obstacles with an efficient and intelligent viewpoint and act swiftly. Grass and water management can no longer be overlooked. Tools, such as increased watering and cross-fencing to allow pasture rest, herd quality and health must be seriously examined. Mineral supplement is a must. Bulls need to be Trich tested, veterinary and nutritionist advice should be sought, prenatal vaccinations for calves at pregnancy testing assures that our future Beef supply begins its lifecycle with the best possible chance of being safe, healthy and reliable.
RFID tags ensure that our calf crop can be traced back to its birthplace of origin and that our source of beef can be authenticated to anyone in the world. Genetics that target the beef products that the consumer demands need to be part of our plan. These things are key elements to embracing the American rancher’s journey to efficient, profitable production. We ranchers in Arizona, as well as in America, are being called to task to create the most safe, reliable, authentic, nutritious, traceable and delicious beef in the world, by the world. We must know our market and respect the fact that there are consumers, like millennials, that have very specific ideas about the food they consume. We, as ranchers, must sit up and pay attention to what is going on around us if we expect to embrace the opportunities as they present themselves.
Editor's Note: This article appeared first in the February 2018 issue of Arizona Agriculture.Join Our Family