Balanced Approach to Vaccine Safety, Efficacy

by Micah Mensing

You want a cattle vaccine that’s both safe and effective, but sometimes you have to choose which of those ideals gets the upper hand.

That’s according to Paul Walz, the Auburn University veterinarian who spoke at the Feeding Quality Forum late this summer in Sioux City, Iowa.

Vaccination programs must be true to the label protocols, yet individualized for each farm or ranch and the level of risk they can accept.

Using killed or modified-live viruses is not so much about vaccine merit as the level of risk, Walz said, noting Kansas State University has one of the best online risk assessment tools.

For most operations, BVD (bovine viral diarrhea) is a major risk. How do you expose your herd to that?

“Purchase a pregnant replacement female,” Walz said. “More times than not, she will test negative but could be carrying a persistently infected fetus.” At calving, she will shed the virus and contaminate your entire herd.

Prevention is often noted as the key, “but do we rely too much on our vaccines?” he asked. “Following any protocol does not mean our cattle are protected from disease.” Vaccination is only one part of a control program that includes isolation and sanitation.

With vaccination, the goal is immunization in that the immune system recognizes what you have injected and develops the cells to mount a response.

Modified-live vaccines are not 100% safe, and killed vaccines are not 100% efficacious, Walz said. That’s why he said it’s about risk level.

“If you are one purchasing animals from off farm and worried about bringing BVD or IBR (infectious bovine rhinotracheitis) onto your farm, you’ll want to use a vaccine that is highly efficacious,” he said.

“If you are practicing high levels of bio-security, testing everything that comes onto your farm, you may want to stay on the opposite side of the fulcrum,” Walz said. “This may not provide the same level of efficacy but it’s guaranteed not to create any problems.”

He said the IBR virus creates most of the abortion and infertility problems in beef cow herds.

Using a modified-live prior to heifer breeding can mean problems if they’ve never been exposed or vaccinated before.

“What we do know is that using a revaccination when the pre-breeding shot is a modified-live and was given at branding age, weaning age or even post-weaning, we know we will have enough immunity generated when we come back with the second booster. Is this 100% safe? No,” Walz said.

Still, he assured cattlemen that revaccinating with a modified-live vaccine in a breeding program “minimizes the risk of infertility.”

One take-home on safety? It is risky to breed replacement or purchased heifers that were not previously immunized. Labels say that’s 30 days prior to breeding, but Walz said 45 days is even better because it covers two estrous cycles.

The take-homes on efficacy? Using modified-live vaccines can reduce the risk of fetal infection 10-fold, while an acclimated or killed vaccine may reduce that risk by 5-fold. “Killed vaccines are effective, but they are only half as effective at reducing the risk as modified-lives,” Walz said.

What should you never do?

“The worst is to use killed doses, especially just one dose, and then not use an annual revaccination program in the cow,” the Auburn veterinary professor said.

Balancing efficacy and safety takes careful consideration. Walz suggested weighing the risks and rewards with your veterinarian to formulate health management plans to fit your operation.

The forum was presented by the Certified Angus Beef^® (CAB^®) brand, with cosponsors Where Food Comes From, Roto-Mix, Feedlot Magazine, Tyson Foods, Intellibond, Zoetis and Diamond V.

Lower heifer costs, not fertility

by Katrina Huffstutler

It’s a great time to own cows, but only if you have a competitive cost structure with the right genetics and management to compete in today’s marketplace, Rick Funston said.

The reproductive physiologist with the University of Nebraska-North Platte addressed 200 cattlemen at the Feeding Quality Forum this summer in Sioux City, Iowa. While input costs should be minimized in times like these, “breakeven at best” for many, he said, it won’t pay to compromise fertility in the process.

“Fertility is the most important trait in beef production, especially in the cow-calf sector, but all the way to the plate,” Funston said. “If we don’t have a live calf, we don’t have anything for the consumer.”

That’s why he focuses much of his work on replacement female development.

“It’s a huge financial cost before she produces a weaned calf,” Funston said. “We have to look at low input development so we don’t have exorbitant costs for a female that’s difficult to get rebred.”

Relatively cheaper feed such as corn residue may bring slower gains, but he noted that’s often no problem for five-weight weaned heifers that only need to gain 250 pounds.

When the optimum percentage get bred and move on to better nutrition on summer grass, they respond more favorably than their peers developed to a higher weight on better feed. The slower-start heifers rebreed at a higher rate and stay in the herd longer because their diets fluctuate less than heifers given every early feed advantage.

“You feed them up on whatever your byproduct is, get them all pregnant and say, ‘Oh, by the way, you are never going to see that again.’ A lot of our work,” Funston said, “is focused on let’s treat that heifer like she is going to be treated as a cow.”

Aiming for 95% or more bred is folly, he added. “If I can get that, am I really selecting for the more fertile ones?” Better to get cattle to rebreed a few points lower than that, but on low-cost feed such as corn stalks.

Data on early-born steers has shown their advantage from feedyard to packinghouse and beef quality grade, but recent data also shows heifers born in the first 21 days of a calving season are heavier at weaning, gain at the average rate after that and begin cycling before the breeding season. They have a higher pregnancy rate, more in the first 21 days, breed back sooner and wean a heavier calf than average.

Unfortunately, many producers cull the early-born heifers for being too big, not realizing they are simply older.

“This is a mistake,” Funston said, urging adoption of some quick visual tool such as notching ears of those early heifers. “Get rid of those that are born late.”

Heifers most likely to settle the first time and then rebreed on time are more likely to stay in the herd long enough to make a profit.

The forum was presented by the Certified Angus Beef ® (CAB® ) brand, with cosponsors Where Food Comes From, Roto-Mix, Feedlot Magazine, Tyson Foods, Intellibond, Zoetis and Diamond V.

Time tested

We’ve dubbed it the “smiling house.”

On my family’s regular route through the Sandhills, there’s a lonely old place, rain and time have left the wood devoid of color. Yet, with its classic, square farmhouse design—and a little imagination—its two upstairs windows make eyes. It sags so much that the porch looks like it’s turned up in a smile.

Every time we pass the “smiling house,” I do the opposite, however. There are no signs that anybody has cared about the place in quite some time, but I can’t help thinking about a time when someone did. “That was somebody’s dream, somebody’s hope,” as the old Tracy Byrd song goes. “They had big plans, they had no doubts.”

We always wonder when we’ll drive past and find it’s disappeared into the sea of grass, either due to Mother Nature or management.

Of course, it could be they have a bigger, nicer place more suitable for ranch headquarters, or dozens of other explanations, but my mind often settles on the depressing thought that perhaps that operation didn’t survive a ’50s drought or the ’80s Farm Crisis.

A little way down the sparse highway, I see a ranch that probably dates back to the same period, but it’s a starkly different picture. The well-kept house could look much like it did new, perhaps 100 years ago. There’s a bustle of activity around the place, with evidence that the people living there grow everything from tomatoes and cucumbers to kids and cattle.

As I travel past slices of the country with a past I know only in general, I often wonder about their specific history. What could we learn from the places that failed and the ones that flourish?

Sometimes I’m lucky enough to learn those stories.

Earlier this summer, I sat down with two different cattle feeders. One male, one female. One 96, one close to 80. One in Nebraska, one in Colorado. One large scale, one small. There were many differences in their journey, but also many similarities of how one ends up looking back on a career in agriculture with collectively more wins than losses.

Here are a few pearls of wisdom:

- Work hard, spend wisely. “First, you’re so busy trying to make a living, you haven’t got time to wonder what’s going to happen in the years to come,” one said. They both talked about the physical labor and mental energy it took building their businesses. They still practice frugality. “Keep enough reserves that you know you’re going to weather a storm,” said the other.
- Challenges aren’t something to fear, but rather something to learn from. “Some of those are good because it will humble you. You get to going along pretty good and you get to feeling pretty good about yourself and you get in one of those and you’ll get a little humility back,” said the cattleman.
- Embrace technology. An adding machine and typewriter have given way to the computer, “but that’s progress; and we’re always for progress, really. Not progress for itself. Not progress because the neighbors have it,” she said. “Progress, that it will fit your business and be profitable in your business.
- Remember your buyer. “If you give them what they want, you can rest assured you’re going to have a profit.” Both feeders have watched quality grades increase and consumer demand follow suit. “You’ll be rewarded for your work. It’s easier to go downhill than it is to push something uphill.”

I’ll be smiling at the gems I picked up from these seasoned producers, long after that landmark house falls into a final frown.

May your bottom line be filled with black ink,

Miranda

About the author: Miranda Reiman

I love God, my kids, my hubby, rural life, agriculture and working for CAB. I’m officially the director of producer communications, which basically means I get to learn from lots of smart people and pass that information along to lots of other smart people: you. I’m so lucky to work with cattle producers and other folks in this great industry. (Oh, and one more job perk? I get to eat lots of really yummy beef.)

Hard work, luck and smarts

Sometimes it’s easy to see where a person is and forget where they’ve been. It’s easy to stare down the success in the here-and-now, without even a glance at their past.

When I learned Gerald Timmerman won our Feeding Quality Forum Industry Achievement Award, I knew the family in generalities…for their feeding businesses spread across Nebraska and surrounding states. I knew they had some ranching and other beef industry interests.

In short: they are successful.

But then, I got to spend a day with Gerald Timmerman this summer. He’s the oldest of four brothers and in the first five minutes of making small-talk while waiting for a videographer in a hotel lobby, he said, “This only worked because it’s simple. All those years, we never had titles, bonuses or company vehicles.”

Then he said Certified Angus Beef LLC worked because, in essence, it’s simple, too….just specifications at a packing plant.

I learned pretty quickly he’s a get-down-to-business, daylights-a-burning-so-let’s-not-waste-it kind of guy.

Anyone who knows me, understands why we hit it off.

As if to underscore that, he talked about having five kids in five years and the realities of growing his family and his feed yards at the same time.

“I was flying high when I proposed on Good Friday, and by June when we got married? I was broke,” he recalled. Those kids filled up their single-wide to the window sills.

“To this day, I won’t ever put an employee up in a trailer house, because I remember how damned cold it was in the winter,” he laughed.

He gives credit to his wife Lynn for keeping the home in line while he and his brothers poured their attention into the business.

“I think we went about close to 10 years at 7 days a week without ever taking a day off, every one of us, and as we went through we just drew a salary,” he said.

Success didn’t just happen. It was hard work, with some luck and shrewdness thrown in, too.

Gerald’s dad taught him to listen to advice, to learn from those who had been there before, to prepare for a wreck, and to save. I loved his latest example—buying a fleet of ranch trucks when a hailstorm left a slew of new ones marked down to half price at a large dealership. Even at this point in his career, he still saves.

Another thing Leo Timmerman taught his firstborn? Always keep the customer in mind.

“I’m a consumer advocate because I believe you have to produce what the consumer wants, not what you think he ought to have,” Gerald said. “If you give them what they want, you can rest assured you’re going to have a profit. You’ll be rewarded for your work.”

Isn’t that what we all want at the end of the day? Do a job well and reap the rewards.

May your bottom line be filled with black ink,

Miranda

About the author: Miranda Reiman

A packer buyer’s favorite cross

As the Brand the Barn intern, I’ve attended a lot of barn celebrations this summer (18 to be exact). Each time I’m struck by the variety of people in attendance. Sometimes, it’s a seedstock operation and bull buyers attend. Other times, it’s a closeknit group, just family and friends. On occasion, we get licensed partners and restaurateurs.

In Otwell, Indiana, I met a character who stood out. His presence felt special.

In his late eighties, he towers well above 6 feet tall. Wearing a white cowboy hat, a crisp button-up and pointed-toe cowboy boots, some of his first words of the day were, “Well, hello there honey!” in a slight Southern drawl.

Jamie and Kim Hoffman, owners of Hoffman Angus, lit up when he shook their hand. Then he made his way to me.

“Hello, ma’am, I’m Bowen McKinney,” he said, while giving my arm a good pump.

Bowen is a cattle buyer, and has been since 1955. He’s combed through thousands of head of cattle in his lifetime, with no intention to stop any time soon.

He was thrown into the world of livestock buying when he took his first job at Fischer Packing Company in Louisville, Kentucky.

He learned quickly in the field what types of cattle would result in good quality beef.

“I had to really pay attention,” he says. “A lot of times in auction houses you’ve got about 30 seconds to decide on a price. You have to analyze the weight, age, degree of finish and potential yield.”

McKinney became rather good at his skill. He consistently purchased groups of cattle that did well on the rail. So good, in fact, that he attracted the attention of other packing companies.

“Mr. Dawson owned Dawson-Baker Packing Company,” he recalls. “One day he told me that he was tired of losing cattle because I would buy them first. So the only way to stop that was to hire me,” he says with a chuckle.

The job at Dawson-Baker provided McKinney with a whole new perspective: carcass data.

“Not only did I get to see the cattle on foot, but I also got to see them on the rail and that really helped me to know what to look for,” he says.

When Bowen was buying cattle, the packing plant averaged 90% Choice and Prime. “We didn’t want to buy cattle just to buy them, we wanted good cattle. Cattle that would grade well and cattle that could meet Certified Angus Beef ^® standards (CAB).”

That’s what started the relationship Bowen has with the Hoffman family, commercial Angus producers in southern Indiana.

Bowen frequently visited the Hoffman Farm, commercial producers he could “count on to have the best cattle.”

He still remembers one of the first loads of cattle the Hoffman family sold shortly after CAB had been established in the late 1970s: “They brought me 36 head of cattle, 35 of them graded either CAB or Prime. I could always rely on the Hoffmans to send me high-quality cattle, and they [starting with Jamie’s dad Albert] have been raising the best for over 50 years. That’s saying something.”

At a time when other cattle reigned king, Bowen wanted the Angus cattle fed in southern Indiana. The quality ensured that the packing plant would also uphold a reputation of quality with their customers.

The premiums Hoffman earned kept him on the same track. Today, he hits the target of 100% Choice or better, with recent loads earning 75% CAB, including 32.5% Prime.

“I was a guest speaker at a Kentucky Beef meeting once,” Bowen says. “I was talking about Angus cattle and why we liked that breed more than others. One of the questions a fella asked was, ‘What is the best cross with Angus cattle for better beef?’ I was a bit caught off guard but then realized it was a pretty easy answer,” he says with a grin.

“The best cross with black Angus cattle is just yellow dent corn.”

Brianna

About the author: Brianna Gwirtz

Brianna Gwirtz is a former intern turned full-time employee at CAB. After graduating from Ohio State and spending the summer working with farmers and ranchers as the Brand the Barn intern, she is excited to be able to write and share stories of high-quality cattle producers.

Putting it in perspective

“You know, a dredge ditch…”

I was explaining the Minnesota farm I grew up on and I was met with blank stares from some of my South Dakota State University classmates.

“…where you drain water off the field,” I continued.

They looked dumbfounded, and I was equally as puzzled. Then one spoke up, asking why in tarnation we’d be draining water off the field. They spent their summers irrigating or praying for rain, as they had well-drained soil, not the native swamp ground we farmed.

The older I get, the more I realize perspective is important.

What would be a drought in Minnesota might be a really good summer in west Texas; what is a lot of noise to one family might be an average day in our house full of kids; what might seem cheap to some would be a lifetime’s savings for another.

Considering perspective is important when looking at data and reading about studies.

“There is data out there that can support anything,” said Andress Kniss, a Wyoming Ph.D. weed scientist I heard at the Ag Media Summit this summer. He was telling a room full of ag communicators to be vigilant for distorted use of numbers, to think critically and certainly not be part of the problem.

In the age of click-bait headlines and shareable infographics, it’s trendy to highlight a monumental cause and effect.

A few years ago there was a lot of buzz about grass-fed beef having at least twice as much of the heart-healthy omega-3 fatty acids as corn-fed beef. That is true. Heck, it may have 100% or even 150% more. Scientists would call it “statistically significant.”

But that’s when you have to ask yourself, “Compared to what?” Well, the 80 to 90 milligrams (mg) in a 3.5-ounce serving of grass-fed beef may be double or triple the 30 to 40 mg in its conventional counterpart. But compared to salmon’s 1,000 to 2,000 mg, it’s not enough to make a difference in your diet. It’s an irrelevant, moot point.

Consider the “vanishing zero.” We can measure to smaller and smaller concentrations. So if there is five times as much of a substance in water, does that mean it was a difference in 1 vs. 5, or was it really 1 parts per trillion (ppt.) vs. 5 ppt.? That’s 1,000 times less than 1 part per billion (ppb). Comparing parts per trillion to the old standard parts per million? Well, it’s a million times smaller than that.

For a bit of an illustration, a part per billion would be like finding one kernel of corn in a 70 acre field. (Just to show my work, that’s an average 180 bushels/acre, with 80,000 kernels per bushel.) All that is to say it’s small, very small.

I’m not expecting you to get out your calculator or dust off an old college stats notebook every time you read up on the latest technology or new best practices, but think about how a change might really affect your herd. Will this new program increase rebreeding rates a lot or a little? Will it be worth the investment in a year, five years, or still doubtful in 10?

If a salesman says “it doesn’t really hurt marbling,” does that mean it flat-out doesn’t affect it? Or does it mean some new product or plan reduces intramuscular fat “just 20 or 30 points on a 999-point scale?” Do you realize how many of your cattle typically end up 20 points either side of the Choice/Select or even the Choice/Prime line? What sounds like a little can have a big impact.

There is always a cause and effect. Sometimes it just takes a little perspective to recognize it.

May your bottom line be filled with black ink,

Miranda

About the author: Miranda Reiman

CAB at 40: The Beef Community’s Brand

by Laura Conaway

October 2018

The Certified Angus Beef^® (CAB^®) brand turned 40 this year, tapping into an increased well of available and qualified cattle, up 25% in two years. With annual global sales reaching beyond 1.2 billion pounds (lb.), it’s pulled far ahead of a very large pack, the hundreds of other brands combined falling short.

To be fair, it’s always held a big lead. The last decade of year-over-year growth only shows what an elemental force the brand has become, gaining momentum with every stride.

Yet, before the billion-pound years and consecutive records, it was like any other good idea trying to take root. For reasons that have never been replicated, it worked.

“Everything lined up,” says Randy Blach, CEO of CattleFax. “Consumers had to understand the value of the brand, producers had to produce enough of it and the economy had to be strong enough to support consumers’ buying habits.

“All those stars had to come together.”

It was a perfect storm, comprised of resilient leadership and ordained timing. Seen in another light, it was all just an accident, an entertained idea gone right.

Those on the inside, the brand’s closest confidants know it was never predestined. It took time. The early days in a house in West Salem, Ohio, remnants of the fertile soil where integrity was planted and a good thing outgrew its roots.

Life in Wooster moves faster for CAB and its partners. The 145 men and women on staff see to that.

With its mission unchanged – to increase demand for registered Angus cattle through a specification-based branded beef program to identify consistent, high quality beef with superior taste – the future now looks a lot like it did in 1978: unchartered, yet highly anticipated.

On the brink of its fifth decade, the world’s leading and looked-at beef brand keeps a bit of mystery to its vest. Every opportunity and challenge births more of the same; the key is to control it, harness its power for good.

“It’s not an easy space to navigate,” says Ted Schroeder, agricultural economist at Kansas State University. A tough environment to survive in, many a CAB competitor has come and gone.

“It’s more than just, ‘let’s put a piece of steak on a plate and the consumer is going to love it.’” Schroeder says. It takes a deep dive into figuring out how to make an entire system work; even then, it’s no guaranteed win.

“I’m amazed by it,” the professor says. His team’s studied the brand from afar and tips their hat to its success. “Our blackboard said it should work, but CAB showed us, pragmatically, that it does.”

Like rungs on a ladder, each new step laid the foundation for the next worth noting.

“It’s rare and it’s why you don’t have 50 CABs out there,” Schroeder says. “You’ve got one and that’s all it takes.”

The tipping point

Economic disasters, perhaps predicted, show up uninvited.

The ink barely dry on the pages of CAB’s 30^th fiscal year, brand president John Stika had suggested, “Our best days are yet in front of us.”

In the fall of 2008 CAB was arguably still a niche. The Choice/Select spread drove premiums in a market that higher quality beef would later dominate.

CAB had recovered enough to set modest sales records after the global trade disruptions of 2004 when the worst economic disaster since the Great Depression made landfall. Partners in the industry tightened resources and the brand braced for impact.

“When all you have is a premium brand to sell, you believe that, by God, tomorrow’s going to be a better day,” Stika says.

His team in Wooster had confidence in the product and saw the value in its price, but for good reason, the industry worried.

“The assumption was consumers were going to move away from beef or go to cheap beef,” Brent Eichar says of the financial crisis. “We saw the opposite.”

The senior vice president of CAB brings an unrivaled perspective. He signed on just after everything moved out of that little house on Ruff Road in West Salem and now has an office next door to Stika’s.

“People stayed home, they didn’t go out to dinner.”

Instead they went to the store and bought high-quality beef because it was worth their hard-earned money.

“For every pound we lost in foodservice, we probably picked up two pounds in retail,” Eichar says.

The price/value relationship, what economists will call a theory, CAB watched develop in real time. Dollars saved on generic green beans meant more was available for premium protein, but still the disbelief and questions came.

“You guys are crazy. We assume your sales are down,” was the commodity side’s consensus.

Be that as it may, brand sales weren’t down and wouldn’t be again for at least a decade.

“There was the mortgage crisis; the stock market didn’t collapse but had significant declines, and the latter affected almost every for-profit business,” Eichar recalls. “Well here we were, a not-for-profit, so we didn’t care about stock price, we’re paid on a cents-per-pound basis so we didn’t have to cover margins.”

“I mean, it was amazing,” Stika adds. A decade doesn’t dim his appreciation. “Consumers didn’t quit eating and they didn’t quit buying premium items. They just got more discerning.”

Candidly he’ll admit, he didn’t see it coming.

“To be perfectly honest, it’s not something you plan for. You can’t create a strategic session around a global recession that doesn’t affect our economic model, but that in and of itself was almost perfect timing.”

Or fate.

Regardless, it stirred in them a fresh confidence and laid the groundwork for a decade unlike any other.

“It set the stage for everything else we experienced,” Stika says. Take the drought in 2010: “If we wouldn’t have seen that kind of pull-though in relation to value in ’08, boy, when the drought gets here, we’re in no position to see a maintenance of supply.”

The data was striking. Producers responded to the signals. “Hey, this CAB thing seems to be working in tough times,” Stika says.

The U.S. cowherd was the smallest it had been in ages, yet CAB certified head counts were at an all-time high. Herds were rebuilt with premiums in mind and producers went home with dollars in their pockets.

Other CAB partners did, too.

“I want to say we were up 10% in retail that year (’08 recession),” Eichar says, noting the effects of a model that pays a set amount on pounds sold. “Everybody else was pulling back and we were sitting there with resources to invest,” and equally as important, ideas to execute.

That was the tipping point, the first domino to fall precisely in the right direction.

Responsibility never weighed heavier.

A need for transparency

The brand went to the drawing board. In side rooms and corner offices, conversations brought on ideas and people, passion. The goal remained to increase demand for Angus cattle. The freedom, the challenge lay in how to do it.

A Montana ranch visit came to mind.

“It was one of the first intentional chef experiences that we did,” Stika recalls with candor. John Doherty, New York City’s electric culinary innovator was then executive chef at the Waldorf Astoria New York and the brand’s only chef ambassador at the time. Doherty believed in the product but wanted to see it for himself. A camera followed him to Sitz Angus Ranch, near Dillon, Mont.

Cowboys on horseback, dogs trailing behind, the snowcapped mountains – all fit the chef’s wondering imagination to a tee. But Doherty thought it was curated.

“So this cowboy rides up beside him and John asks, ‘so you’re here for the photo shoot, too?’ Stika tells.

To hear Doherty’s recount is even better: “We’re walking toward the ranch and galloping down the road come these cowboys with actual ropes, and I’m like, ‘son of a gun, they even went as far as bringing in cowboys for this film.’”

That was a reasonable misunderstanding, but the chef represented a greater need for transparency.

“It was a big realization that until you show them everything,” take them to the big-scale feedyard, let them set foot in a pasture, Stika says, “there’s always going to be some doubt in the back of their mind, like we’re hiding something.”

CAB would drop the curtain.

With production in full swing, attention turned to the streets and the army of a sales force needed to get the brand in more restaurants. The Masters of Brand Advantages program was born.

A three-week intensive course for distribution-house sales staff, what’s known as the brand’s MBA is serious work. For Steve Weissler’s crew at Performance Foodservice Middendorf, near St. Louis, Mo., it’s a requirement for business.

The MBA program mitigates most worries. Recently retired from PFS, Weissler has sent at least 25 employees through CAB’s flagship program.

“If your career path is foodservice sales, then it’s a must to attend,” Weissler says. His company has partnered with the brand since 1986. “Not only is it incredible at connecting to the farm, but it’s a tremendous resource and gives my guys the confidence to go out and sell the greatest brand of beef in the world.”

The MBA success initiated the next move. Borrowed space in a university meat lab or meeting hall wasn’t working well. But there was a kind of intrigue tied to Wooster. What exactly did CAB employees do there and how did they add value to the brand?

A home base could answer those questions.

It was Eichar who threw out the idea of buying a restaurant next door. It could be worthwhile, it seemed, to have a place where people could gather to experience the brand rather than just be told about it.

Funds from the unexpectedly large commissions of ’08 and ’09 led to the purchase of what would become CAB’s Culinary Center, the catalyst in a complete evolution of how CAB trains and interacts with its industry partners. Since opening in 2012, nearly 600 groups have walked through its doors.

A smart change

Well before the people arrive, the cattle better show up first.

A specification adjustment in November 2014 would help. A requirement of less than 1,000-lb. hot carcass weight increased to an upper limit of 1,050 lb.

It wasn’t a rash decision, says Doug Schroeder, CAB board chairman at the time. The cattleman from Clarence, Iowa, recalls many a table conversation where motives were analyzed, and the consumer was always considered first.

“Are we doing this for money,” he recalls the examinations of conscience, “or because we need to stay relevant to meet the demand people want?”

The board answered and made the call.

“The cattle were getting bigger,” says Mark McCully, CAB vice president of production. There was no arguing with reality. “The economics supported it, and we needed them to get bigger to make sure our end users had enough product to sell.”

Plain and simple

“It wasn’t about gaining sales,” McCully says. “It was about staying relevant within an industry whose economics were driving carcasses bigger and putting at risk the program and the position of the program within our retailers.”

The brand celebrated a 15-million lb. increase in sales that year. Had the adjustment not been made, calculations had CAB fiscal numbers down 50 million compared to the year prior. Instead, producers saw more premiums and customers filled their meat cases.

Ed Steinmetz, vice president of meat and seafood for Giant Eagle, a Pittsburgh-based retailer with more than 230 locations, saw the benefit firsthand.

“Managing ever-increasing carcass weights at retail from a cost-per-package perspective is a challenge,” Steinmetz says. He won’t sugarcoat it. But the old specification for CAB was keeping out a lot of the higher grading cattle that would have otherwise qualified.

“By opening up that spec, you’ve now enabled a lot more CAB into the market,” he allows, “and that’s always a plus.”

Economist Ted Schroeder argues it’s critical for success.

“If you stock out, you’re out of the game.”

Once you develop a product with loyal customers who have loyal customers of their own, “you absolutely have to be able to supply that product,” Schroeder says. “Otherwise it’s bells and whistles with nothing to deliver.”

Profit for the cow man

CAB wanted results, and there’s nothing like cash in hand to solidify a point.

The way you make a brand work, Schroeder says, is you have everybody in the entire value chain pulling it the same way.

“The individual producer,” he says, “is an opportunist.” He has to be. CAB had to get down to that level.

Shifts in quality signals since ’08 show they did.

“The dollars coming back on grids over the last 10 years is pretty amazing,” McCully says. His team works with cattlemen to grow supply and, in turn, boost their individual profitability.

The data shows it works.

It was a heavy ship to turn. At the brand’s inception in 1978, cattle were sold live, all as commodity. Ferrari or Honda, it made no difference, both were going to the scrap yard for disassembly.

Tireless efforts from founder Mick Colvin and the team he built saw premiums start to trickle in by the 1990s.

Today it’s a different story. At a rate of $8,500/hour, cattlemen collected $75 million in CAB premiums in 2017. That’s up $23 million since 2015, bringing accumulated total premiums to more than $700 million, more than half of that paid in the last seven years of the brand’s reign.

In tandem, premium Choice and Prime surpassed Select as a percentage of beef from all fed cattle.

“One could argue it took 30 years to get to 500-600 million lb. sold, and the next 10 more than doubled that figure,” Eichar says. “We’ll be at a billion-two this year.”

There’s a silence that surrounds it all. It took so long to get here, diligence and time of folks who no longer even work for the brand, and yet the present brings a loss for words.

“We moved out of the nice little niche program into an economic signal of significance,” McCully musters.

There’s nobody to argue the point.

Blach adds his thoughts with this quality grade analysis: not long ago, calves from the U.S. beef cow herd were grading close to 50% USDA Choice and Prime; it’s 80% at present.

The real story goes beyond that achievement, he says. “We’ve been able to maintain premiums paid that were comparable to when cattlemen were producing 15 to 20 percentage points less of this supply.”

Premiums have held in spite of the positive change they encouraged.

“That tells you beef demand is very strong,” Blach says, “and consumers want that high-quality eating experience they know and understand coincides with CAB.”

The brand has been the single biggest driver in the quality grade movement that we’ve seen over the course of the last 20 years, he says. In the meantime that incentivizes producers to keep making the good ones.

From 1979 to 1998, U.S. cow-calf producers made, on average, $2 per head on an annual basis.

“Two dollars,” Blach says. “Since that 1998 low, producers have, on average made $175 per head.

“That’s a marked improvement in profitability that’s been driven by demand growth, and that demand growth is tied right back to CAB.”

A conduit for community

It’s obvious CAB is on an upward trajectory. At 3.07 million lb. sold per calendar day, USDA’s original certified program is still the market leader. But those who don’t bend can break.

“Maintaining relevance requires constant change,” K-State’s Schroeder says. In an industry where technology is on the rise, “you have to evolve with it. You can’t be the same company that started this deal 40 years ago.”

For CAB, that’s looked like all of the above and then some – big picture ideas and strategic hires.

The culinary staff expansion reflects where it’s headed.

Another reason John Doherty, now executive chef and owner of New York City’s Black Barn Restaurant, is still a fan.

“Good cooking starts with great product, but it’s also about handling that product in a way that brings out the best qualities of it,” Doherty says. “To be able to inspire chefs with innovation and flavor and taste, it’s beyond raising the bar.

“It’s a total re-fabrication of the brand.”

CAB’s Culinary Center has been at the forefront of that change. With a full-service bar and kitchen, a meat cooler and butcher block, the brand comes to life within its walls.

But that’s all it is, Stika says, just a building with walls. It’s the people (including six chefs today), “these relationships that make it so cool.”

Cattlemen and chefs, packers and feeders, they’re all connected through a thread that is the consumer. The honor becomes strengthening those bonds, being a conduit in the community.

“We’re finding out now that it doesn’t always have to be about us,” Stika says. “Sometimes you win in a relationship when you bring people together.”

Altruism at its finest.

It’s not about relinquishing control on the brand’s own turf, neither stepping aside nor letting things go. It’s sincerity found in subtleties, establishing a home that exudes the premium nature expected of the product, but doesn’t force it.

“The logo doesn’t always have to be studded in rhinestones,” Stika says. Partners sharing in an experience does the brand just fine.

If CAB’s good at anything it’s connecting people, telling a true story.

So what’s to come of the brand that changed beef? If the last 10 years are a testament, it’s anyone’s guess.

But success has a way of refining things, and the brand has a knack for putting the right people in the right spot. As dreams drive it forward, its roots keep it grounded.

“CAB carries a name that in and of itself speaks to quality, but not just of quality product, quality of a vision,” economist Schroeder says. “I think there’s a lot we can learn from CAB that has nothing to do with food.”

More CAB stimulates more demand

by Steve Suther

The long-term growth in premium beef production, market share and demand is starting to redefine overall beef demand and how it is measured.

Economic theory suggests more supply will lower the price, and higher prices tend to lower sales for a commodity. “A commodity like beef,” older textbooks might say. Premium beef has not always borne that out, particularly in the decade since the Great Recession of 2008, says CattleFax analyst Lance Zimmerman.

“Demand for high-quality beef remains exceptional, and producers really only need to look at the start of 2018 to recognize that,” he says.

The share of USDA Prime-grade fed cattle made new weekly record highs above 8% recently, even as the fed harvest continues to increase.

“That combination led to the number of Prime cattle being up more than 26% compared to last year,” Zimmerman says. “With 6,500 additional Prime carcasses each week, you’d think Prime cutout must be suffering.

Actually, it’s higher than last year, up nearly $13/cwt. through February.”

Eight years ago as a graduate student at Kansas State University, he and economist Ted Schroeder created a demand index model on a 2002 base, though adjusted last year to reflect a more conservative demand curve. It set aside the annual elasticity estimate for the Certified Angus Beef ® (CAB®) brand obtained by a survey of 15 economists in favor of elasticity figures from monthly data in Missouri research.

The original model began to show a breakaway separation after 2010, when the CAB demand index had advanced more than 50% since 2002. Choice demand was gaining less and heading lower for the next four years as CAB moved ever higher. By 2016, the CAB demand index would have reached nearly 380 and last year 640 (a 540% increase), while Choice failed to surpass 150 on that scale.

Using the more inelastic estimate, CAB demand set records for only eight years in a row compared to 13 consecutive years on the former scale. The brand reached an index value of 168 compared to 142 for Choice, also a record fractionally higher than the Choice demand index in 2015.

Another K-State model from economist Glynn Tonsor, “Annual all-fresh beef demand index” goes back to a 1990 base and showed a 23-year high in 2015 before falling off a bit since then.

Tonsor says recent years have shown “pork and chicken are not as substitutable for beef as once thought.”

He allows that may have to do with a steep decline in the share of Select-grade beef to less than 20% of cattle.

“I also think it reflects household changes,” Tonsor says. “We moved to two-income households, the value of time has grown and willingness to alter the primary meat ingredients for a meal has shrunk…this would reduce cross-price sensitivity.”

Still, that sensitivity changes with an individual’s situation, he adds. “Folks are willing to pay up for higher quality beef as their economic status improves. As the share of steaks being consumed by robustly employed folks has increased, that may well have reduced steak price sensitivity.”

Zimmerman notes that the increase of more than 8.5% in U.S. average household disposable income from a 2014 dip to 2016 is the largest two-year growth in the 30 years that data has been charted. That helped maintain beef demand when prices climbed from $5.55 per pound in July 2014 to the record $6.15 the next year before falling back to $5.77 in 2016.

“The price trend increased again slightly in July 2017 ($5.83), but I bet median household income growth offset that,” he says. Tonsor’s recent checkoff-funded demand study examined the impact of media coverage, too. Those numbers show a steady increase in beef stories that mention taste, tenderness and flavor in the past decade, showing “a large marginal impact on beef demand, but not nearly as variable in media coverage as other topics.”

Some observers point out all fresh beef at retail has held a three-to-one price advantage over the broiler composite (chicken) for more than three years. That could be due to the increasingly larger share of that beef comprised of premium quality.

Boxed beef prices in the first quarter of 2018 say demand for the higher quality kind continues to lead demand factors. The CAB brand makes up 80% of all USDA certified programs that require Modest or higher marbling.

“Whether you look at the Prime, CAB or Choice cutouts,” Zimmerman says, “the increased value consumers are placing on higher quality cuts is driving most of the year-over-year gains. Middle meat demand is up 4% to start the year.”

It looks like beef demand continues strong, but primarily thanks to that premium quality. Retail beef prices have remained relatively stagnant since summer 2017, Zimmerman says.

“If consumer beef prices are going to maintain historically wide premiums to pork and poultry, that puts more pressure on beef merchandizers to make sure it is worth the premium,” he says.

“Higher quality beef offers that concession, and I think that is where Certified Angus Beef offers a point of differentiation to wholesale meat buyers.”

850,000 Records say: Marbling Still Matters

by Miranda Reiman

Just missed it. Just missing a flight, a deadline for a major rebate, or watching your child’s winning shot at a ball game. The feeling is much the same.

What if you knew you “just missed it” when it comes to cattle qualifying for the Certified Angus Beef ^® (CAB^®) brand?

For many cattle across the United States that’s the difference in a marbling score of 492 versus 500. Those commodity Choice carcasses are just a few fat flecks away from upper two-thirds Choice and their share of the $50 million that packers pay each year for cattle earning that high-quality designation.

“I don’t think many producers know just how close they are to being ‘in the money’ so to speak,” says Justin Sexten, CAB director of supply development. “So many cattle sit right on that line and shifting that line ever so slightly is a big deal.”

Take selecting for Angus bulls with breed average marbling expected progeny differences (EPDs), for example. At 0.56, just moving that up to 0.81 would suggest a 25-point improvement of marbling score, or a quarter of a score. That would move them from “just missed it” to “made it.”

“That’s a potential 21% increase in supply to the CAB brand,” Sexten says. “For producers, that means thousands more cattle that could earn the average $40/head bonus.”

That’s just one take-away from the brand’s 2016 study that looked at data on nearly 40% of the Angus-influenced, or “A-stamped,” carcasses in three, two-week periods.

“It allows us to measure and monitor average characteristics on CAB-certified carcasses over time,” says Clint Walenciak, CAB packing director.

The analysis contains 850,000 records that include four of the brand’s 10 carcass measurements: ribeye area, hot carcass weight, fat thickness and marbling. The team also uses that data to look at what keeps cattle from making CAB.

“This information can then be passed along to producers as validation that they are still focusing in the right areas to produce CAB-qualifying cattle, or redirect if need be,” he says.

In each of five studies from 2008 to 2016, marbling easily rises to the top as the No. 1 reason cattle fail to qualify. In 2016, 92.6% of the A-stamped cattle that were kicked out had insufficient marbling. That’s compared to a high of 95% in 2012.

“It’s improving,” Sexten says. That 492 average marbling score, or low Choice, was 472 nearly a decade ago on the 1,000-point scale. “But that’s the barrier to entry here.”

Even though the average is very close to CAB’s marbling requirement of 500, the median is 20 points lower.

“Producers hear us talking about 75% of the cattle grading Choice and Prime and they might think, ‘Mission accomplished,’ and move on to another trait. But more than half of the Angus cattle fall short of the brand’s marbling requirement,” he says.

That’s why the focus continues on improvement through genetic selection and management. Some suggest the drive for quality has spurred the upward trend in hot carcass weight (HCW), Sexten says.

“They’ll say, ‘If you make them big enough, they’re going to meet your specs,’” the animal scientist repeats. The data show even at a relatively light 650 lb. HCW “there are a whole pile of cattle that marble.”

At the same time, there are a great many Select grade carcasses with heavyweight discounts. “Carcass weight is certainly an indicator,” Sexten says, “but it’s not a perfect relationship.”

In 2014, CAB moved to include up to 1,050-lb. carcasses, a 50-lb. increase from its prior specification, but Sexten says that was just to “to keep the brand relevant to all stakeholders.” Indeed, 9.1% of Angus-type animals now fail to qualify because of carcasses too heavy (though some would also fail to make CAB for lack of marbling). That’s compared to just 2.6% of them in 2008, when the brand’s limit was 1,000 lb.

“As cattle have gotten bigger, so have ribeyes,” he notes. CAB requires a 10- to 16-square-inch ribeye, and very few (.4%) fall short of the threshold, but more than a tenth (11.2%) of those cattle have ribeyes greater than the 16-inch cap.

“That’s really a concern for our foodservice partners, when it comes to portion control and plating, so we try to address variability with that specification,” Sexten says.

Only 3.5% of the records. were above the 1-inch back fat limit.

“Even during these times of record high grading, the fact is lack of marbling is still by far the leading obstacle that keeps cattle from our brand,” Walenciak says. “That’s been true historically and it is today.”

Balance vs. the trade-off

by Justin Sexten, Ph.D.

One of the big challenges of livestock judging is explaining “balance” to a new evaluator. As we attend county fairs, state previews and junior nationals, we’ll hear the term used to describe cattle in nearly every class. After the judge remarks on the calf’s balance, they’ll follow up with a collection of terms that support their view of balance.

Ask anyone to explain balance; the wide range of answers you get shows why this is a tough concept for beginning livestock judges. I once heard it described as “when all things come together correctly.” You’d think a judge could simply justify a class winner by saying they are the nicest balanced, and then move on, but no, there are other roads to balance. It has also been described as “when visually divided in half, the animal is proportional on both ends.” Yet, in most steer shows you watch this summer, animals with this definition will likely not prevail, because a well-balanced steer has a chiseled front end with a square hip and thick quarter. You’re more likely to hear “wedge-shaped” than proportional.

Historically, we talk about performance data with little focus on phenotype. Wait, why the sudden change in topic? What’s performance got to do with balance? Well, a balanced phenotype discussion gives us a chance to highlight different management philosophies, breeding objectives and carcass value.

As a fan of quality, I reviewed a collection of data that incorporated Waygu cattle into a terminal breeding program. Could it be a logical progression for those who want to take marbling to the next level? Not so much, because of net losses to the trade-off effect. The data illustrated that the most profit potential still comes from a balanced approach rather than chasing extremes.

Cow genetics in the report covered a range of breeding programs from straight Hereford cows in Australia to SimAngus and Angus cows in the American Midwest. Calf management ranged from 140-day weaned calf-feds to traditional, 7-month weaning with long yearling backgrounding periods and short, 100-day finishing. Across this variety of systems the results between Angus- and Waygu-sired calves was relatively consistent. Angus-sired calves were heavier at weaning and faster gaining after that to finish quicker and produce heavier carcass weights. The Waygu-sired calves produced carcasses with greater marbling.

Selection for extremes generally requires trade-offs. In this case, chasing extreme marbling resulted in longer feeding periods and lighter carcass weights because of reduced genetic growth potential. For those marketing at weaning or after backgrounding, the challenge is greater because the extreme benefit is not recognized while the reduced pre-weaning growth is fully realized. For any breeding plan and sire breed, a balanced approach helps avoid making trade-offs that are contrary to the long-term market.

If you want enhanced marbling with lighter carcass weights, remember that management can get there faster than genetics. This spring, for example, carcass weights declined as cattle feeders marketed earlier than usual; switching to a calf-fed system can also reduce carcass weights while enhancing quality. In both cases, the changes are quickly reversible by adjusting management. Genetic change takes longer to reverse and sometimes the tradeoffs are more costly than the gain.

As we reflect on that balanced show steer and the economics of how it’s put together, remember each beef primal contributes differently because of value and weight. Comparing a steer that qualifies for the Certified Angus Beef® (CAB®) brand versus one that simply grades USDA Choice, there was a $79 value difference favoring the brand through May. The loin contributed $30, the rib made up $18 and the chuck provided $15 in value, those three primals chipping in $63 of the $79 in value difference. The round added $9 in value to the CAB cutout while the plate, brisket and flank combined to make up the remaining $7.

When it comes to picking a class winner, that steer with the largest rear quarter may represent a negative tradeoff, versus a more valuable one with more in the front end that “balances” up a bit better.

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