It’s Prime time
Is the rising tide of Prime beef good news or too much of a good thing?
by Katrina Huffstutler
There was a time when targeting the Choice grade seemed like a lofty goal.
But as the song goes, the times, they are a-changin’.
While Choice numbers rose steadily since 2007, it wasn’t until 2015 that Prime carcasses in the mix really began to make an impact. Since then? They’ve continued to increase dramatically, frequently setting records. The latest of those shattered the first week of November, when 9.8% of steer and heifer carcasses qualified for the highest grade.
Clint Walenciak, director of packing for the Certified Angus Beef ® (CAB®) brand, spoke in the Learning Lounge at the Cattle Industry Convention in New Orleans this winter on how the industry got here and what it means for demand.
What’s driving this trend is one of the biggest points of debate, he said. Is it genetics, or is it management?
“That’s a 50/50 equation; we can play either one of those hands if and when we need to,” Walenciak said. “There’s no doubt the price of corn is contributing to this, but when you look at a trend over that many years with that much longevity, you really have to come back and start looking at the genetics.”
Those genetic improvements came so quickly thanks to Mother Nature. Drastic drought-related herd reductions in 2011 and 2012 allowed for building a much better cow herd from 2013 to ’15.
“As we rebuilt that herd, it was painful at times, but we experienced some really good growth with the nicest, freshest genetics we had available being forced into the pipeline,” Walenciak said.
Many cattlemen took that opportunity to increase the Angus influence in their herds, another factor that contributed to the rise in quality.
“When we look at the number of cattle coming to packing plants today and being identified under the Angus and Angus-cross category within the plant, we’re seeing that number grow by 2 and 3 percentage points a year toward somewhere in the ballpark of about 66 or 67%,” Walenciak said. “And that’s across the entire fed cattle population.
“But regardless of the color of the hide or the breed that’s behind it,” he said, “I think the industry as a whole has been very laser focused on the genetic component.”
Those factors have combined to produce a volume in the neighborhood of 40,000 Prime carcasses per week, regularly much more than twice the long-term average of 3.3%.
“Everybody likes to look at historical averages because it helps you set your compass out on the horizon and see where you’re going,” Walenciak said. “But the packers are in uncharted waters now. There has been such a huge increase, it becomes a little bit difficult.”
Still, all indications say more Prime beef is simply a good thing, rather than too much of a good thing. Demand has risen with supply, and that’s partly because the dependable volume has buyers looking at the whole carcass.
Walenciak said while most people associate Prime with middle meats, the industry doesn’t just sell Prime steaks anymore. Prime briskets have exploded in popularity, and there’s a good market for Prime clods and ground beef, too.
That means opportunities to gain new customers, too, making this a prime example of a rising tide that lifts all boats, he said.
“When we talk about where a lot of these products flow, you’ve essentially got three options,” Walenciak said. “They can go to foodservice, they can go to retail or they can go to international markets.”
Because Prime was previously a middle meat program, its dominance was within the foodservice sector. But today, the biggest increases are in retail, at 40%, and international, up 60%. Even within the foodservice category, new opportunities are available as Prime increases.
Walenciak said fine dining, white-tablecloth steakhouses are no longer the only ones that have access to Prime. For example, Texas barbecue joints are now boasting CAB brand Prime briskets.
“It’s a brave new world,” he said. “Everybody is trying to get adjusted. No matter if you’re on the packer side of it, putting this product into a box, or if you’re on the purchasing side. You’re thinking, ‘I don’t want to get left behind,’ and that’s the good thing. The volume and the buzz has gotten large enough that everybody’s looking at it. It may not be a fit for everybody that’s bringing beef in their door out there, but at least everybody’s challenging themselves to take another look at Prime.”