Mythbuster Monday: Not just the middle that counts

A cattleman presented to a room of his colleagues, telling them that they focus on Angus, coordinating their business relationships and managing the cattle right in an effort to qualify for the Certified Angus Beef  brand.

He said it was the most profitable target.

But at last month’s Cattle Industry Convention and Trade Show, the moderator was quick to point out that (and I’m paraphrasing here) those branded programs were great for some environments and to sell the middle meats, but we had to market the whole animal in this business and when it comes to end meats, grade just doesn’t matter quite as much.

Myth: Certified Angus Beef does nothing to elevate the value of the end meats.

Fact: It does. And the value our brand adds is increasing.

This chart pretty much tells the whole story. It shows the premium for some common CAB end meats, when compared to Choice grade. As you can see, last year CAB added 11-13 cents above the Choice. That’s nearly double what it added in 2008.

Sure it’s not the 85-cent premium over Choice that wholesale meat buyers paid for CAB tenderloins in 2012, but its extra dough. And there is WAY more product to multiply the smaller premium by than there is in the case of the small but valuable tenderloin.

David O’Diam, our assistant director of business development, says that’s a factor of the continued growth in the spread between Choice and CAB.

Side note: For October-December the Choice-Select spread increased 6.7%. The CAB-Choice spread went up by 74%. Did you catch those numbers? 6.7% vs. 74%. Wow.

“As that premium continues to increase, it proves that quality pays,” David says.

That’s part of the increasing premium among branded end meats, but it’s also the tremendous amount of effort our sales team places on end meats at retail.

As people look to have a high-quality eating experience for a bargain, they look to the ends.

“Prices have influenced people’s decisions,” David says. “A consumer might say, ‘I’m not going to buy a strip, but we’re going to buy high quality.’”

Retailers who want to provide that for their customers know it pays to stick with the brand known for superior taste and tenderness, even in those end meats.

So rest assured, if you’re trying to produce cattle that will meet CAB’s strict criteria, that premium you’re paid will come from the added value you provide on the entire carcass, not just because you’re making high-end steaks.

May your bottom line be filled with black ink,

Miranda

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