Rock on

You were the rock stars at last week’s Certified Angus Beef annual conference.

Yes, you, the American cattleman. Among the business suits and loafers, cocktail dresses and stilettos, that are commonplace at The Greenbrier Resort, the ranchers and feeders stood out…and not just because of the cowboy hats they sported.

“They were the only award winners to receive a standing ovation,” Mark says. “There was a real appreciation by our end-users for the job they do every day.”

The couple dozen producers who traveled to West Virginia for the event were ambassadors of sorts for those of you who spent last week just like any other: caring for the herd, perhaps harvesting some crops or weaning calves.

Our award winners and a handful of producer board members were just a small subset of the 600-some people attending our conference, but they represented that iconic, hard-working, steward of the land and livestock.

Producers aren’t segregated into their own track, but rather immersed in the same sessions that the restaurant and retail trade takes in. They learn about the educational tools and marketing ideas we share with our partners, but it also gives them a chance to interact with all the people who use what they create: Certified Angus Beef.

These brave souls fielded questions about a typical day on the ranch, how they care for sick animals, and what effect the drought is having on them personally.

From my home office, I watched the twitter feed light up when four of the producers took the stage for a panel.

AC standing o — The producer panel also earned a standing ovation.

“Frank Scheilfelbein is my hero,” one tweet said. (Hey, I couldn’t agree more!) But the Cliff’s Notes on the real-time coverage: the cattlemen stole the show. Mark was there and he concurred.

“The producer panel was far more about getting to know the people than it was full of controversial questions,” he says. “When they know there are real people with a shared value system taking care of these animals, things like implants become almost a non-issue to them.”

Gary Darnall talked about how his son Lane was home hauling water to cattle. Frank talked about how big their farm is and why it has to be to support him, his eight sons and their families. Dale Moore shared how he and his wife packed up, moved states and jumped headfirst into the feedyard business.

The overall reaction? From those who cook, sell and present beef every day: a resounding THANK YOU!!

And since a remote, solo, standing ovation carries a little less weight, I’ll just say, “Ditto!”

May your bottom line be filled with black ink,

Miranda

PS—To read about any of our award-winning producers, check out their individual stories available here.

Beef: bigger and bigger

By Steve Suther

Cattle feeders don’t like $7 or $8 corn, but they know what to do at those higher prices. Most of them feed cattle longer to heavier weights and sort them to market on a grid.

Maybe not all cattle feeders see it that way, but in the big picture, that’s what is happening, says Shawn Walter, president of Professional Cattle Consultants (PCC). He presented “How big can we go?” at last month’s Feeding Quality Forum in Grand Island, Neb., and Amarillo, Texas.

“Every few years we talk about it, can we make carcasses any bigger? Well, we keep doing it,” he said, noting one of many graphs. “This is never a straight line, but we’ve had an upward trend for carcass weights since the 1960s all the way through the current year.”

You might wonder why,unless you think about how the market gets what it pays for. Packers have been paying for more pounds.

Walter studied historical carcass-weight data for steers and cows and surmised the first wave of steer increases came from crossbreeding.

“During the ’60s and ’70s, we had those increases in steer carcass weights without changing our cow size much,” he said. “However, as we got into 1980s, we saw more of the Continental crosses retained as females and in that decade, cow weights increased faster than steer weights.”

The next decade saw a boom in growth technologies in the feeding sector, especially trenbolone acetate (TBA) implants. Grid marketing developed a weight range that discounted outliers – but the upper limit has stair-stepped as both cow and steer weights keep trending higher.

From 1990 to 2010, the heavyweight carcass limit moved from 900 lb. with 5% of steers heavier at the start, to 1,000 lb. and 4.1% exceeding those limits by 2010. Some U.S. grids have moved up to a 1,050-lb. limit now.

“We have increased the production, the genetics and the growth in our cowherd,” Walter said.“This train is headed down the tracks with a pretty good head of steam and to just turn that around is not likely. Bigger cows equal more dollars per calf, but profit? That’s an operation-by-operation question.”

Feedlots have economic pressure to maximize weight potential from those calves, once they cross the threshold to grade-and-yield pricing. Gridded cattle tend to push up against the heavyweight discount limit, while cash cattle find their way to market at the earliest possible date to cut down on feed costs.

That’s because of the differing profit dynamics between cattle in those two marketing channels, Walter explained. Using a PCC model based on cattle placed at 750 lb. this February, live cattle sold on cash bids start losing money before 130 days on feed or 1,200 lb., but cattle could be fed for a couple more months to add 180 lb. for value-based marketing.

“The incremental cost of gain on a carcass-weight basis towards the end of the feeding period is more efficient than live-weight gain, with 80% of it going to carcass gain by then,” he said, noting that phenomenon is known as “carcass transfer.”

As more cattle feeders realize this, fewer sell cash live cattle and demand increases for the kind of feeder cattle that will grow and grade. Pressure also mounts for the use of more aggressive growth technologies and strategies that can help improve feed efficiency, Walter added. “Sorting to top off pens for the grid and putting the rest on a beta-agonist ration can result in more pounds with less heavyweight discounts. When the corn price doubles, the ROI on these strategies doubles,” he said. The beef industry may be approaching a practical limit on carcass size, but that is not so much driven by the concern over ribeyes too big for a plate. Innovations in beef merchandizing have stepped up to that plate, and larger size is actually an advantage for some cuts. Boxed beef offerings may adjust to better sort for similar size cuts. Rather, the limit has to do with plant equipment, human labor and how much weight the workers can easily handle in fabrication and processing, Walter said. Still, packers have incentive to increase average weights as the number of carcasses declines, he added. “I don’t know that we have seen the economic signals telling us to limit carcass weights, so we’ll keep making cattle and carcasses bigger to be more efficient.” The meetings were sponsored by Pfizer Animal Health, Certified Angus Beef^® brand, Purina Land O’Lakes and Feedlot Magazine.

What costs more than buying hay?

Some costs of the drought are easy to calculate.

2012_09_17_mr_Anderjaska-61 — Angus producers Brenda and Joe Anderjaska are in the thick of the drought, like so many across cattle country.

Like the extra hay that ranchers Joe and Brenda Anderjaska, of Hayes Center, Neb., are going to buy this year. It’s those longer-term costs that get a little harder to figure when trying to assign exact values.

I rode shotgun through some of Anderjaska’s summer pastures on Monday. As we looked at their commericial and registered Angus herd, the sky was gloomy. The clouds teased with a few sprinkles, but, like so many times this summer, moved along before offering reprieve.

So the couple is weighing their options, and when they do that, they think behind the fiscal year.

Joe says he’s seen others swath and bale their poor corn stands, but, “That’s slicked off so bad. It’s not going to catch snow, that thing might blow all winter long. We’re going to turn cows into our stalks and see what they can graze.”

Buying hay is expensive, but what is the cost of letting your soil fly away?

2012_09_17_mr_Anderjaska-1 — They’ve been working their whole career to fine-tune their females. It’s hard to put a value on that.

“The only way you’re going to make a living is if you keep your natural resources and make them better for the next year,” he says.

The logical equation is either find more feed or run fewer critters.

“People are saying, ‘Well, with this drought, sell your cows off and buy them back later.’ I’ve got a lot, a lot of years in history and genetics that I’m not going to just haul to the salebarn and get rid of,” Joe says. “I’ll figure out some way, I don’t care what it is. We’ll probably go through cows really, really hard this fall, but we’re going to try to keep numbers as close as we can.”

It’s pretty difficult to put a value on a quarter of a century of engineering their perfect herd, but they do know they don’t want to start that process over.

They’re securing more hay and looking at grass in the Southeast, and thanking their lucky stars that they’ve focused on moderate-framed, efficient cows from the get-go.

“We don’t feed them corn and we don’t feed them silage. They don’t get all these good rations hauled out to them,” Joe says. “We’ve worked really hard to get cows that can convert grass and roughage to pounds as efficiently as possible.”

What are you doing to deal with the drought? Are you looking at any creative ways to keep the cows without breaking the bank?

May your bottom line be filled with black ink,

Miranda

Stocker strategies affect value

by Steve Suther

There was a time when corn was $3 per bushel and finished cattle were clocking in at younger and younger ages, that the stocker phase may have seemed less important. Nobody would say that, after a decade of increasing feed prices for fewer calves that finish at ever higher weights.

An estimated 76% of calves spend some time as stockers, and since marbling is a lifetime event, what happens then plays a key role in subsequent beef quality grade after finishing.

A white paper for Certified Angus Beef LLC (CAB) entitled, “Effects of nutrition and management during the stocker phase on quality grade,” evaluates the body of research in the area and finds pathways to profit that maintain consumer satisfaction.

The Oklahoma State University animal science and veterinary team led by ruminant nutritionist Clint Krehbiel sees the potential for increasing efficiency and carcass quality. It might just take a few critical changes in management “during early phases of the production cycle that increase intramuscular fat (IMF) deposition” while decreasing other fat deposition.

While noting that net dollars depend on both carcass weight and quality, the paper focuses on stocker nutrition and management strategies that can impact marbling. On the related tangent, however, it also concludes that increasing carcass weight will increase marbling scores.

Of course, differences in calves start before the stocker phase, which must deal with the range of genetics, nutrition and health. In general, prior sickness leads to poorer average daily gain (ADG) en route to a lower value carcass.

The effects of bovine respiratory disease (BRD) have been studied in more detail, always showing “negative effects on carcass characteristics.” ADG is also compromised, but research shows that, except for those chronically infected, more days on feed help to recover carcass quality.

The white paper cites several studies that support deworming as a way to add weight and quality. Application in the feedlot to steers not dewormed on pasture added 49 pounds (lb.) of gain, but deworming on pasture added $33.75 per head to the stocker phase. Use in both the stocker and feedlot phases improved subsequent marbling score.

A 1984 study established that IMF fat cells prefer glucose for development while external fat grows with more acetate in the rumen. That led to Illinois work in the 1990s showing glucose from corn starch in creep feed and starting rations for early-weaned calves gives marbling a head start.

That’s especially true when calves are gaining below their genetic potential.

After a meta-analysis of 14 studies that compared dietary starch in backgrounding, Krehbiel’s team reports cattle grown with a high level of starch had higher ADG in the finishing phase, but no difference in efficiency or carcass quality compared to other cattle.

Studies of high-starch supplementation on grass may show a boost to final marbling score only for cattle that enter the grazing phase weighing more than 800 lb., or nearly two-thirds of their final, finished bodyweight. More studies are needed to confirm that, however.
The highest gains on grass lead to heavier placements on feed and heavier subsequent carcass weights. Adjusted for rib-fat thickness, marbling score was positively related to ADG, placement weight and carcass weight.

However, the same rib fat-adjusted analysis shows lower ADG over longer grazing periods can also achieve the heavier weights that generally boost marbling scores.

“Marbling scores can be improved by ‘making cattle bigger’ through increasing the rate of gain during the stocker phase,” but the paper concludes that also increases yield grades. “In contrast, rib fat-adjusted marbling score can be improved by using low to moderate rates of gain for longer grazing periods.”

In taking a look at DNA-assisted selection, the paper concludes those new tools carry the potential to “maintain or increase muscle growth (ribeye area), while at the same time improving carcass quality (marbling score).”

The complete paper is available online at https://cabcattle.com/research.

Light at the end

Survive nine months of bad news, better days follow for feeders

by Miranda Reiman

Don’t expect corn values to get dramatically lower….this year.

Feeding Quality Forum attendees were probably not surprised to hear Dan Basse, Ag Resource Company, say that pricing inputs would be their top challenge in the last quarter of 2012. But the fact that those costs could normalize in the latter part of next year surely piqued their interest.

The market analyst addressed feeders, allied industry and educators at the seventh annual meetings held in Grand Island, Neb., and Amarillo, Texas, last month.

“There aren’t too many years in my career that I’ve talked about surety of supply,” Basse said. “I want all of you to not only think of the cost of feed, but making sure you that you have it.”

He expects the U.S. corn crop to drop substantially from USDA’s estimates, which have not reflected any reduction in harvested acres. Ag Resource puts the average corn yield at the lower range of industry estimates, but their numbers are based on actual field research. If the average falls to 113 bushels per acre, it would move corn prices to above $11 per bushel.

That average is around 28% to 30% below trend, Basse said, also noting that ending stocks will be tight.

“I can’t show deficit stocks,” he said. “Someone has to go without. What is that last residual bushel of corn worth? I don’t know. I don’t know how high is high.”

Corn stocks will likely settle around 650 million to 700 million bushels. They’ve only been that low about 3% of the time since 1973. “Historically, this is unprecedented,” Basse said.

That doesn’t necessarily mean the beef business will have to deal with back-to-back record corn-price years.

Regardless of the status of the renewable fuels mandate, Basse says the “ethanol monster” is not the factor it has been the past five years.

“He’s not dead, but he is at least in hibernation. Ethanol has reached its zenith,” Basse said. More efficient cars and driving fewer miles, along with the lower ethanol exports, make that a reality.

“This will be the first year since 2005 in which the world per-capita grain use will decline,” he said. “That’s why this year was looking promising until Mother Nature dealt us this big blow in terms of heat and dryness.”

Digging into historical data, there have never been two consecutive years of widespread drought in the central U.S.

“Even in the 1930s, we had drought in 1934 and 1936, but in 1935 we had average rainfall,” Basse said. “So if I’m in the cattle feeding business, I’m very hopeful that next year’s weather will be normal.”

If farmers ratchet up corn acres to 98.5 million and get an average yield of 160 bushels per acre next year, that puts corn in the $4.50 to $5.00 per-bushel range.

“Won’t that be nice?” he asked. “But that’s three or four quarters away.”

To add to the immediate stress, hay production is forecast at 120 million metric tons, or the lowest level since 1976.

The poor corn crop may provide one saving grace: “The only good news for you is that this is really bad quality corn. There might be some nice discounts offered relative to poor quality.”

Low test weights and aflatoxin issues are some of the widespread concerns.

Herd liquidation is another factor as feeders look to source calves, but Basse says crop insurance might help. Some Midwestern farmers are looking to chop poor-quality corn and invest their payout in cows.

“What does that mean for the cowherd in the United States? I’m not quite certain, but I do believe it will allow it be more withstanding than I’ve seen in other drought years,” he said.

As the domestic population ages, beef demand is down slightly, but the worldwide trend contradicts that.

“When I look at consumption, it is still moving up, so the story of being a livestock producer is still relatively bullish longer term,” Basse said. “We’re also finding from our overseas customers that importing beef is less costly than importing the grain itself.”

That bodes well for trade.

Individual balance sheets are based not only on costs and inputs, but on getting the highest possible revenue. Supporting a branded program is one option: “That’s good for the farmer, and everybody up and down the chain gets the most value,” Basse said. “It helps everyone, including the consumer because he knows he’s getting a high-quality product, so I’m big on branding, going forward.”

Another thing he’s big on? Foresight.

“I want every cattleman to think forward, at least for three quarters, and then we can plan for the good times which will probably happen nine months from now.”

The forum was co-sponsored by Purina Land O’ Lakes, Certified Angus Beef^® brand, Feedlot Magazine and Pfizer Animal Health. Watch for more information in the weeks ahead at www.cabcattle.com.

Gimme the good news!

Our Feeding Quality Forum the week before last, was full of some kind of gloomy news for cattle feeders, like this:

2012_08_28_mr_Nebraska FQF 12-3 — Dan Basse, Ag Resource Company, talked about many challenges, but he also forecast an end date for some of those.

“I’d like to tell you here today that the corn market is acting tired and not doing well, but the problem is, every time it drops there are buyers.”

Or this:

“We do see over the next few years, something on the order of a 3-million-head drop in the size of the cowherd and a 4-million-head drop over the last four years. In three years we’re gonna see some empty pens; we’ve got excess capacity. We’re gonna have to deal with it.”

But I inherited optimism from a lady who does a crummy job with a smile on her face, because my mom is thinking, “Well, this is better than driving the rendering truck.”

So rather than go on and on with all the challenges facing y’all, I thought I’d capture one good news comment from each speaker:

“We are not in the camp that this corn crop is getting better. The only good news that we have for all of you is that this is really bad quality corn. Test weights yesterday at several fields were as low as 37 pounds per bushel, for corn. A lot of them are coming in between 49 and 52. Now if you are feeding corn, there might be some nice discounts that you are offered relative to that poor quality.”—Dan Basse, Ag Resource Company
“Those are record-high retail beef prices. We’ve set a record almost every month the better part of the last two years. And if you extend my comments over the next two or three years that’s going higher.”—Mike Sands, Informa Economics
“Looking at the foodservice and retail side, there are positives there as well <related to the trend toward increasing carcass weights> because that retailer, distributor, they’re in the business of selling pounds of
CAB meat scientist Phil Bass says you can have the best of both worlds.

beef. They’re as concerned about a shrinking cowherd and less beef to sell as we are because their markets are very driven by beef sales. The increased carcass weight will help to keep the overall beef production up.” –Shawn Walter, Professional Cattle Consultants
“Can we have a high-quality animal and still have a lot of meat coming off that carcass? Absolutely. We’re seeing it today. In the past, the old paradigm in our brain was, ‘No, not really.’”-Phil Bass, Certified Angus Beef
“About 9% of our disposable income is what we spend on food in this country to feed our families. In some of the similar developed countries, Europe for instance, anywhere from 13% to 28% of their income is being spent on food. What am I getting at with this? One, we take it for granted. Two, it’s cheap.” –Brad Morgan, Pfizer Animaal Health

If you want the whole scoop, taking the good with the bad, feel free to check out the wrap up article . We’ll have more in-depth stories on each of the presentations in the coming weeks.

May your bottom line be filled with black ink,

Miranda

Asheville perfect setting for N.C. field day

NC Angus 1 - Tent — This tent was strategically placed in one of the most beautiful places in the country, Mark says.

Our crew gets to go to some pretty cool places, see lots of high-quality cattle and meet some great people. Even so, Mark felt like he hit the jackpot with his weekend trip to the Biltmore Estate in Asheville, N.C., for the 2012 North Carolina Angus Association Field Day.

“In my opinion,” Mark says, “Asheville is one of the prettiest spots on the planet! For anyone who has never visited, you need to go.”

(Make a note to yourself: Add Asheville, N.C., to must-see list. Mark says.)

But back to the event.

Ted Katsigianis, vice president of agricultural and environmental sciences for the Biltmore Estate, organized the affair, which brought together more than 125 Angus enthusiasts from the Southeast, a roster of speakers — including Mark — to cover current industry topics and great cattle from the Biltmore program.

NC Angus 3 - Cattle — A quick glance at the Biltmore cattle.

The herd, which consists of several hundred registered Angus cattle bred to thrive in their environment and on a Southeast forage base, is quality- and efficiency-driven.

“Interestingly, Ted has recently used the GeneMax™ test on his steer calves to determine those with the highest marbling and gain potential,” Mark says.

The Biltmore farm finishes out those highest potential steers at their feedlot and that meat will be used by the foodservice team of the Biltmore properties.

The program kicked off with a joint presentation by Mark and Tonya Amen of Angus Genetics Inc. The duo gave an overview on the use of genomics and then introduced GeneMax™.

NC Angus 2 - Joe Hampton — Mark was in good company. Here former AAA Board President, Joe Hampton, addresses the crowd.

American Angus Association (AAA) Past President Joe Hampton was also on the program, sharing insight from his time on the board. AAA Regional Manager David Gazda provided association updates, too.

“All in all, a great turnout, wonderful hospitality, really good Angus cattle and a very educational field day,” Mark says.

Congratulations to Ted and his crew for pulling together such a successful event!

Angus to Limousin=Apples to oranges

Every ranch I’ve been to this summer has been pretty much focused on straightbred Angus cattle. (Remember my visits to Zutavern Ranch Co. and Guggenmos River Ranch?)

2012_07_07_mr_Guggenmos River Ranch Ranch-245 — Angus works at Guggenmos River Ranch, so they see no reason to add any variation or complicate matters.

They know Angus EPDs (expected progeny differences) like nobody’s business. Er, nobody else’s business. They can recall what were good numbers in say a milk EPD from two decades ago and how that compares to today. I’m not sure how much they could tell you these measures in other breeds, because frankly it doesn’t matter a whole lot to them.

So today’s myth hasn’t come up lately, but we do hear it out in the country so I’m bringing it to light here, too:

Myth: You can compare EPDs from one breed to the next straight up. No conversion needed.

Fact: The Angus.org EPD page describes an EPD as “the prediction of how future progeny of each animal are expected to perform relative to the progeny of other animals listed in the database.” If you’re reading carefully it’s that very last part that carries so much importance.

“Relative to the progeny of other animals listed in the database.”

Each breed compares all its sires to other sires in the same breed registry. As a hypothetical example, if you lined up all the Charolais bulls and found one that would be considered fairly low birthweight compared to that whole population and then you took that same bull and put it in a lineup of all the Angus bulls it probably wouldn’t register as a “low birthweight bull” by Angus standards. You’re comparing against different measures.

So the U.S. Meat Animal Research Center (MARC) in Clay Center, Neb., has calculated across-breed EPDs for years. They use Angus as the base.

Rather than go through and list all the traits and the adjustments, I’ll point to this article that appeared in BEEF Magazine, written by MARC scientists: MARC Releases 2012 Across-Breed EPD Table

“Bulls of different breeds can be compared on the same EPD scale by adding the appropriate adjustment factor to the EPDs produced in the most recent genetic evaluations for each of the 18 breeds. The AB-EPDs [across-breed EPDs] are most useful to commercial producers purchasing bulls of more than one breed to use in crossbreeding programs. For example, in terminal crossbreeding systems, AB-EPDs can be used to identify bulls in different breeds with high growth potential or favorable carcass characteristics.

As an example, suppose a Simmental bull has a yearling weight EPD of + 52.1 lbs., and a Gelbvieh bull has a yearling weight EPD of + 84.0 lbs. The AB adjustment factors for yearling weight (Table 1) are 22.4 lbs. for Simmental and -13.5 lb for Gelbvieh. The AB-EPD is 52.1 lbs. + 22.4 lbs. = 74.5 lbs. for the Simmmental bull, and 84.0 – 13.5 = 70.5 lbs. for the Gelbvieh bull. The expected yearling weight difference when both are mated to cows of another breed (e.g., Angus) would be 74.5 lbs. – 70.5 lbs. = 4.0 lbs.”

Of course if you want to avoid all that math, you could just go with straightbred Angus.

Only kidding.

Well, kind of.

May your bottom line be filled with black ink,

Miranda

Getting what you want from your grocer

Tips from a CAB superfan

We love hearing about Certified Angus Beef® brand superfans. The diehards, who eat nothing else. They’ve tasted the best and won’t go back. They know not all Angus is created equal and they’re not fooled by imitators.

Cindy is one of those superfans.

Making her testimonial even stronger? The 55-year-old Texan, wife and mother has no ties to the Angus breed. Though she — and most of her family — works in the agricultural industry, it’s on the allied industry side. The only cattle on their place are the Mexican steers she and her husband, Mitch, use for team roping practice.

And yet, she is loyal to CAB.

So loyal, in fact, that she didn’t sit back quietly when her favorite local retailer started scaling back on their CAB orders in favor of their own branded program. She recounts a typical conversation with one retailer:

Cindy: “Do you have any CAB sirloins?”

Retailer: “Yes, they are in the cooler behind you.”

Cindy: “No, those are [other branded program]. I want Certified Angus Beef.”

Retailer: “But these are good, too. And on sale!”

Cindy: “I don’t really care if they are on sale if they don’t taste as good.”

Retailer: “Well, how about some [other branded program] T-bones?”

And that’s the moment she walked away.

But she didn’t give up. She persisted, threatened to order online and spoke to the meat manager. (She tells us the talking point “We’re allergic to tough beef!” came up at one point. How great is that?) And when that didn’t work out to her satisfaction, she went across town to the same retailer’s other location. It turns out they are happy to keep her in all the CAB sirloins she can cook.

Not getting what you want out of your retailer? Take a cue from Cindy. Be informed (Don’t know how CAB is different from other branded programs? Refresh your memory on the 10 requirements here.) and be persistent.

Grocers, like cattlemen, are always looking for a premium. And for both, CAB is the answer!

*And if you’d like to locate a CAB partner near you, visit our “Where to Buy” page.

High-quality beef grilled

Certified Angus Beef brad partners enjoy record June

As Labor Day ushered in the fall grilling season, with a nod toward the season’s more traditional pot roast, some in the beef trade were stewing over supply concerns. While all beef costs more this fall, those selling the best can maintain confidence in consumer acceptance, as seen in June sales reports announced this month.

Partners with the Certified Angus Beef^® brand sold 74 million pounds of steaks, roasts, burgers and other products in June, 4% above a year ago and the highest monthly volume in the brand’s 34-year history, said Mark Polzer, vice president of business development.

“We’ve been fortunate to continue growing in spite of the declining overall beef supply,” he said, noting the result of recognized value for the money. “As beef prices in general have had to go up, that created an opportunity for our brand to set itself further apart. If you have to pay a bit more for beef, you certainly want an enjoyable experience, and I think that is what we deliver.”

Promotions such as the retail “Steaks of Summer” and the foodservice “Middle Meat Smackdown” helped lift sales, especially among licensed restaurants.

“Foodservice business has been up all year, and June sales of 23.5 million pounds in that sector accounted for 31.8% of the total,” said David O’Diam, CAB business development assistant director (see Table). It didn’t hurt to have eight new foodservice distributors sign on this year, he added.

“Retailers had a harder time keeping CAB at a ‘hot price point’ on front-page flyers, the ads that drive about 70% of their sales, so they were down slightly,” O’Diam said. “But they are rolling out some new strategies this fall to hit those price points.”

International business was brisk and on pace for a new annual record. The 11.5% of June sales as exports to 54 countries compared to 10.1% of the smaller 2011 month and 9.6% of June 2010, Polzer reported.

Sales by primal cut favored the chuck and round, and grinds–drawn mainly from those end meats–were up most of all.

“We’ve seen that people are a little more adventuresome and willing to try more of the new cuts like the flat iron, teres major and boneless short ribs,” Polzer said. Sales of those cuts were up 26.7%, 17.8% and 47.6%, respectively, June over June volume, the short ribs nearly doubling to 1.34 million pounds.

Fewer cattle have been accepted for the brand in fiscal 2012 to date, and overall USDA-inspected harvest was down 2.5% through June. Yet Certified Angus Beef^® brand sales are on pace to match or exceed last year’s annual record.

Carcass weights averaging 15 pounds (lb.) more for the year at 836 lb. help explain that, O’Diam said. “But it’s more than that. Demand has been significant on the declining national beef cattle harvest,” he said.“Our brand drives demand and packer profitability as shown by their willingness to put more pounds from each carcass in a box.”

That average carcass utilization number was 248 lb. sold this June compared to 211 lb. the previous year.

Volume is only part of the story, added CAB Vice President Larry Corah. “We not only are selling a lot of pounds but at a significantly higher price point.

“The spread between CAB and Choice is twice what it was last year and individual cuts are as much as $1.50 higher per pound,” he noted. “Grinds are 21.7% higher than last year—all of this is telling us consumers are willing to pay more for a great eating experience.”

Summer months tend to be among the heaviest in Certified Angus Beef^® brand commissioned sales, O’Diam said. Over the past five years, June, July and August have accounted for 8.92%, 9.08% and 9.19% of annual sales, while other months range down to 7.4%. Given that trend, the next monthly record could be waiting in the late-summer reports.

Polzer assigned credit beyond the brand’s marketing team: “It’s our licensed partners who really do all the heavy lifting, getting the product into the proper channels. That it is paying off with these positive results.”

Rock on

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