00:00Companion animals, we're talking about pets, but let's talk about the other side of your business,
00:04and that, of course, is more livestock, because you're down in D.C. to talk about the future of U
00:09.S. agriculture and protein demand.
00:12And on that note, I am curious, you know, whether or not what we're seeing in the Middle East right
00:17now
00:17factored in to the discussions that you've been having today, because certainly, as you've seen,
00:22fertilizer prices rise, you've seen grain prices rise, and I have to imagine at a certain point
00:28that filters into things such as cattle, Jeff.
00:32Yeah, absolutely, that's a factor.
00:34But, you know, we come back, yes, today's been a lot about the protein craze that's going on.
00:39Katie, you and I have talked about it from meat sticks to cottage cheese to yogurts,
00:43where we are today to maybe five years ago when people were saying, you know, is meat and that have
00:48a future?
00:49And we've seen meat sales double the last five years.
00:53Now we've got dietary guidelines recommending double the daily requirements, and all of this has really created a craze.
01:01And I would say, yes, there's no question there's lots of dynamics out there right now.
01:05But I think to the American livestock farmers, you know, the big focus right now is, hey,
01:10let's make sure we've got the innovation and the competitiveness to take advantage of a market opportunity
01:16that we see is going to have quite a long runway here domestically right here in the U.S.
01:20It is happening globally, but I think domestically it's a great opportunity.
01:24And when we were together at the J.P. Morgan Health Care Conference in San Francisco back in January,
01:31you know, we were talking about this cattle shortage that's underway in the U.S.,
01:35how that's impacting Elanco.
01:37And I was hoping that you could just give us an update here because, you know, we're sitting here at
01:42the end of March.
01:43How are things looking when it comes to, you know, the herd shortage that we're seeing in the U.S.?
01:49Yeah, it takes a while to build back the beef herd.
01:53So we're talking about the beef cattle in the United States.
01:55And it takes a while to actually build that herd back.
01:58And we've seen that come back, but it's coming very slowly.
02:02It's going to take some time.
02:03It takes, you know, three to four years to build that herd fully back.
02:06So it will be some time.
02:08But I would say the American farmers have stepped into the challenge, all sides of the protein.
02:13But on the beef side, you know, they're taking advantage of innovation.
02:17They're taking advantage of keeping cattle a little longer so they can actually, you know,
02:22create more protein and doing the best they can to sustain that competitiveness and continue.
02:28It's all about accessibility of protein.
02:30It's all about the affordability of that, as you know, Katie.
02:33And that's what we're focused on.
02:35But I would also say as you spread out and look at the dairy industry, you look at poultry and
02:39pigs.
02:40We're number one right now in all of those major segments.
02:43And what we're seeing today is, you know, farmers are looking for the freedom to operate.
02:48That's what got them in the business.
02:49And American farmers are as competitive as any farmers.
02:52You know, they need innovation and they need strong markets.
02:55And today they're seeing a market.
02:57There's differences around the country between different segments and different protein groups.
03:02But as a whole, you know, everyone has a pretty robust outlook.
03:06And that's what we talked about today over the next five years for the American farmer that's creating this protein.
03:12I am curious, though, Jeff.
03:13I mean, are you already seeing or getting hints here that we are going to see an increase in production?
03:19And my question to you is, A, do we have the capacity here in the U.S., both the land
03:23capacity,
03:24but also the capacity, of course, with regards to what you produce in order to be able to treat these
03:29animals
03:29and make sure that what we're getting to the table is safe and healthy?
03:34Yeah, the answer is clearly yes.
03:36And I know that American agriculture is up for this challenge and this opportunity because it is a big opportunity.
03:41And, yes, we do have that.
03:43But I will come right to our business, Animal Health, and the role that we play.
03:47And really, to answer that, Romaine, without question, it comes back to innovation and the need for innovation.
03:53Farm animals are actually bigger than pet health.
03:55And why this industry, animal health, is so durable and so strong is you've got a pet business
04:00and this whole humanization of pets, as we've talked about.
04:03Now you've got this protein craze, but innovation.
04:06So let me just give you a sense.
04:07When you look at the protein overall, we've got about 20 percent that's lost to health and productivity overall.
04:14If we could close that gap globally, we could feed somewhere in the neighborhood of 1.5 to 2 billion
04:21more people.
04:21So the opportunity for health and wellness, respiratory, mastitis, just the basic husbandry diseases,
04:28if we can handle that, we're going to create the productivity with really the same number of animals
04:33and no additional land usage or water usage needed.
04:37So the health and the well-being of an animal creates a stronger farm,
04:42creates more accessible and affordable meat, milk, and eggs for the American consumer.
04:46And that we know is absolutely essential today in today's environment.
04:50Do you need more help right now from Washington with regard to the regulation and laws on the books?
04:55Or can you do this with what we have?
04:57Look, I think we always say, hey, I think the opportunity to have less regulation and freedom to operate
05:05derives productivity in American business and American agriculture.
05:08And I know that's what American farmers want.
05:11They also need predictable, great innovation coming through.
05:14And I will tell you, the pipeline of innovation in farm animal has never been more robust.
05:19I mean, for us, we're looking at historical innovation right now that we're launching into the marketplace,
05:24like a key product that we're launching, Xperia, in the beef market that's been critical to this beef shortage,
05:30but also the next generation.
05:32Look at monoclonal antibodies, highly used in human pharmaceuticals, used in pets.
05:36We're working at bringing them to solve.
05:39You know, it's a targeted innovation.
05:42It stimulates the animal's immune system and really decreases the need, you know, for other products.
05:48It's a cleaner way to bring, you know, what the animal needs and what the consumer wants.
05:52So we've got the innovation to do this.
05:55Innovation is critical to the American farmer to stay competitive.
05:57And that's what we're asking for here in Washington is, you know, continue to deregulate
06:01and create a more competitive regulatory system to bring innovation.
06:05Now it's good to be watching the Nafton demostracial advantage of this organization.
Comments