Sorting the opportunities from the challenges
by Miranda Reiman
Everyone in the beef chain seems to agree we need more of it.
That’s the simple explanation for a trend that shows hot carcass weights (HCW) have increased 200 pounds (lb.) in four decades. But for all the opportunities that presents, there are many challenges.
John Stika, president of Certified Angus Beef LLC (CAB), talked about both at last month’s Harlan Ritchie Beef Symposium during Midwest American Society of Animal Science meetings in Des Moines, Iowa.
“The production side is looking for something bigger to cover their increased costs,” he said, “but the retail and foodservice sides are looking for [more units of] something much smaller that’s easier to manage from a portion-control standpoint and a unit-cost standpoint.”
Increasing HCW is like adding many more finished cattle. Stika noted Cattle-Fax estimates show such increases from last November into March have made up for 256,000 head of cattle.
As the nation’s cowherd keeps falling back, increasing HCW is good news overall for beef marketers.
“They would rather have big beef to sell than no beef at all,” Stika said.
CAB data and supporting records from the National Beef Quality Audit (NBQA) show that the market is getting more high-quality beef in that mix, too.
Carcasses accepted for the Certified Angus Beef ® brand this year have a 7-lb. heavier HCW than average.
“If they gain better, they eat better, they’re healthier,” Stika said. “Their carcass weights tend to be up and their grades tend to coincide with that.”
Data on more than 2 million head in the NBQA records indicate cattle with a marbling score of Modest or higher were 14 lb. heavier than average.
That’s not a new trend, Stika said. “But it’s a hot topic right now because we’ve seen a more rapid increase in carcass weight than what we’ve historically been used to.”
From 2008 to 2012, the Angus-influenced or A-stamped cattle increased 34 lb., to last year’s 846 lb.
Economics and genetic improvement are the main drivers.
“If I’m a feedyard operating today at 20% to 25% excess capacity, and I look at the replacement costs of what I have to buy—feeder cattle to replace a pen of cattle that I ship out—the economics, at times, begin to work rather nicely that I just feed those cattle longer,” he said.
Many packing plants in an industry at 10% to 15% excess capacity have tried to increase efficiency by increasing the upper limit on HCW and decreased discounts for those just over the line.
In response, the feeding industry more broadly adopted the use of beta-agonists. Those may decrease marbling scores, Stika said, but the best way to mitigate their negative impacts is to feed cattle longer.
“How are we going to take these cattle once they’ve hit the plant and add value, or remove the discount that’s associated with them today?” he asked.
The industry has already made some adjustments on everything from how many pieces of meat go in a box to cutting methods.
“Retail doesn’t use a lot of forklifts and is heavily dominated by unionized labor, so there are certain limits in terms of what those boxes can weigh,” Stika said.
Labor challenges are also part of the problem at foodservice where 75% of restaurants still cut their own steaks, but there’s a developing trend toward breaking down some popular subprimals to smaller cuts.
“You’ve got some different options that are starting to catch on very nicely at foodservice, but it’s not the end-all and be-all,” Stika said. “You have higher production costs and lower product yield.”
Down the road, packing plants are looking at more ways to reduce variation.
“How do we make sure the smallest rib that we have is not in the same box with the heaviest rib?” Stika asked. That’s one common break in boxed beef already, between the largest ribeye areas and the smallest. But it’s not just about the middle meats, he said, and the range in product difference continues to grow as carcasses do. Plant logistics and inventory management are the biggest hurdles to implementation.
So are increasing carcass weights an opportunity or a challenging issue?
“The answer is, it’s reality,” Stika said, “and probably a little of both. It’s allowed us to maintain beef production levels with fewer numbers, but the issues we have are real. If we want to continue to drive beef demand forward, we’ve got to continue to provide more value to our consumer if we’re going to expect them to pay more for it.”