More choices, less Choice beef

Trying to please every beef customer takes more of the best

by Laura Nelson

A wider price gap between Select grade boxed beef and Choice or better—the Choice/Select spread—always comes back to supply and demand. Consumers vote with their dollars, and recent shifts in merchandising put much more high-quality beef on the ballot, just as those supplies began to fall off.

Asked to comment on implications, JBS USA officers noted supplies of Choice beef had been on the rise, at prices not much above Select. That helped entice marketers to offer better beef to millions more shoppers by this fall, and now the wider price spread signals producers to boost supply.

“The retail channel in particular is making more impact than it has in the past on the spread,” says Tyler Brown, JBS premium program manager. Historically, that’s driven by foodservice, he adds, but retailers today want to offer more quality and consistency. “They’re looking at higher grading programs to do that.”

As looking gave way to buying more of the restaurant-quality beef, cattlemen took greater care to optimize marbling. In November and December, high-quality middle meats are often scarce due to holiday buys, but Al Byers, JBS senior vice president of sales, says this fall could see one of the tightest supply situations ever, especially for premium Choice programs.

“The signal being sent to us by the market and the spread is that we need more,” Byers says. “Part of that signal reflects the changing nature of the consumer.”

Indeed, as the flagging economy met higher overall beef prices, consumers sent their own signal to the retail and foodservice sectors. They wanted more value for their dollars. Brown says JBS customers are responding.

“If they’re going to sell beef, they’ve got to deliver a consistent product to their customers,” he says. “That’s more important now than ever due to pricing.”

Opportunities for retailers to meet the demand continue to grow, apace with opportunities for cattlemen to respond in kind.

“When you deliver something they’re looking for with exceptional value, which is defined in the price paid for quality, you’ll usually get rewarded for it,” Brown says.

The Choice/Select spread is a measure of that, and the basis of grid marketing. After jumping to near-term highs above $20 per hundredweight this fall, the packers say that spread could stabilize somewhere between there and $12.

“Dollars drive everything in this industry,” Brown says. “I think the spread speaks for itself and the prevalence of black cattle and Angus-influenced genetics continuing to increase.”

Byers compares the evolving meat case to the variety consumers already expect in the wine aisle.

“You’ve got a bottle of $6 wine and then a $60 bottle of wine,” he says. “You’ve got them all on the shelf, knowing there’s that spread.”

Similarly, many retailers that used to carry only Select beef have upgraded part of the meat case to a higher quality product, but they maintain variety with more choices in the case.

“Both retailers and packers are beginning to understand that marketing is not an average of where a particular consumer walks in,” Byers says. “They have to provide a beef eating solution that meets the unique social demographics of each consumer who walks in.”

That caters to the universal demand for satisfaction, whether it’s in a fine dining restaurant or in the comfort of home.

“If we can deliver on those attributes every time, that’s a win for everyone, from the cow-calf guy all the way to the retailer and foodservice operator,” Brown says.

As supplies of premium Choice beef tighten up through the holiday season, Byers says packers will be challenged to meet demand.

“Certainly, we’re encouraging anybody from the feedlot to the stocker and rancher to keep sending us high-quality cattle,” he says. “We’ll find a home for it.”

$100,000 Up for Grabs with 2024 Colvin Scholarships

by Courtney Weekley | Mar 20, 2024

Certified Angus Beef is offering $100,000 in scholarships for agricultural college students through the 2024 Colvin Scholarship Fund. Aspiring students passionate about agriculture and innovation, who live in the U.S. or Canada, are encouraged to apply before the April 30 deadline. With the Colvin Scholarship Fund honoring Louis M. “Mick” Colvin’s legacy, Certified Angus Beef continues its commitment to cultivating future leaders in the beef industry.

Raised with Respect™ Cattle Care Campaign Launched This Fall

by Lindsay Runft | Dec 20, 2023

Raised with Respect™ was developed as part of a strategic cattle care partnership between Sysco and CAB. The collaboration focuses on supporting farmers and ranchers, equipping them with continuing education to stay current on best management practices and helping to increase consumer confidence in beef production.

Drought Impact and Cattle Industry Dynamics

by Courtney Weekley | Nov 8, 2023

As drought conditions persist across much of cattle country, farmers and ranchers are at a pivotal juncture in the cattle industry’s landscape. What impact does this prolonged dry spell have on the nation’s herd numbers? When will heifer retention begin? How will industry dynamics influence the spring bull sale season?

« Older Entries

It’s time to pay attention

As the quality spread widens, prepared cattlemen profit

by Laura Nelson

Boxed beef climbed 15% in value to start the year, but with the passing of summer into fall value trends began a dramatic differentiation. “At these prices, buyers wanted better quality,” said Larry Corah, vice president of Certified Angus Beef LLC (CAB).

The spread between USDA Choice beef and lower quality Select, moderate since 2008, shot up $15 per hundredweight in a matter of weeks. It was partly attributed to a major retailer switching to higher quality beef, but others had set the stage.

“Two of the largest retailers in the United States had added a premium-Choice program to their marketing plans in the past couple of years,” Corah noted. They were winning more satisfied customers, and the competition was quietly building demand at the high end.

The latest retail shift signaled a sudden need for more Choice and better beef, he said, but more importantly an excess of the low-Select product formerly in those cases.

“Combine the retail factors with an improving middle-meat market in our upscale, fine dining restaurants and a whole new demand profile for high-quality beef has been created,” Corah explained.

What does it mean at the feedlot and ranch? More money for informed marketers.

“There’s no reason not to sell high-quality cattle on a grid,” said Paul Dykstra, beef cattle specialist for the Certified Angus Beef^® brand, commenting on prices for CAB Prime. “When you’re looking at nearly $250 per head in premiums, that makes a guy pay attention.”

Those figures are based on mid-October calculations of an 850-pound (lb.) carcass, sold on a popular Nebraska grid (Table 1). The difference is much larger when compared to Select, which brought $187-per-head less than CAB on the grid. The premiums for quality represent a significant jump from recent annual averages.

Before anybody tallies potential premiums, Dykstra warned that it’s important to understand how area-weighted averages work (Table 2).

“Many people believe they’ll get the full Choice/Select spread over and above the carcass price for Choice,” he said. “Not true. It all depends on the plant location and grid structure.”

If a plant averages 65% Choice, the packer will likely pay 35% of that Choice/Select spread on every Choice carcass. Southern plants with historically lower grading may pay up to 50% of the spread, Dykstra noted.

Even in Nebraska, where quality competition is fierce, there’s plenty of reward for those who have focused on carcass quality.

“Select is always a discount by the full Choice/Select spread below the base, and Choice is that area-average premium over the base,” Dykstra said. “The spread covers the up- and the down-direction from the base.”

Regardless of whether you think about quality, it affects your price, he added: “Cattle with a track record for quality are the ones now bringing higher bids as calves and feeders.”

$100,000 Up for Grabs with 2024 Colvin Scholarships

by Courtney Weekley | Mar 20, 2024

Raised with Respect™ Cattle Care Campaign Launched This Fall

by Lindsay Runft | Dec 20, 2023

Drought Impact and Cattle Industry Dynamics

by Courtney Weekley | Nov 8, 2023

« Older Entries

Testament to plan well executed

Pratt Feeders wins CAB award

by Steve Suther

A 38,000-head feedlot near Pratt, Kan., shows what can be done with a systematic approach to higher quality beef.

Pratt Feeders committed to quality in 2003 by licensing with Certified Angus Beef LLC (CAB), and won a national CAB award the next year because of manager Jerry Bohn’s plans.

With universal staff support, the feedyard gathered data as never before, sharing it with CAB and customers to upgrade cattle and profitability.

Back then, its 11% Certified Angus Beef^® (CAB^®) brand acceptance rate on 17,000 cattle was a benchmark to leave in the dust. In the same June-May period ending this spring, a similar number of enrolled and harvested cattle made nearly 32% CAB and Prime.

That was 7 percentage points above the 2010 Pratt Feeders mark, too. It’s why, at the CAB annual conference in Sunriver, Ore., Sept. 20-22, assistant manager Dave Latta accepted the 2011 Quality Focus Award for partners with more than 15,000-head capacity.

“We made a conscious effort to procure more of the right kind of cattle,” he says. “But our retained ownership customers have made great progress as well.”

Latta heads up both areas of procurement.

“Our cattle from Florida and Louisiana customers fit in with those from Kansas, Oklahoma, Kentucky and South Dakota, pretty much all Angus,” he says. Per-head premiums earned in June ranged from the mid-$40s to twice that above the cash market.

Bohn says a key to earning premiums is learning how to feed high-quality cattle as a category, and specific to repeat customers.

He set the course for success years ago with a strategy to learn as much as possible about the cattle he feeds while inviting higher quality placements. The feedyard has enrolled more than 150,000 cattle in the CAB database since licensing. It opened doors to Angus producers for networking and a series of options to return data, even when the feedlot buys up to full interest.

“Angus customers have made a pretty intensive selection for quality as we learned to feed them a bit more and returned the data,” Bohn says. In 2003, he knew something about the genetic potential in 15% of the cattle fed. Today that stands at 35% to 40%.

Other factors have affected quality, too, he says, including weather and instrument grading.

Over the last couple of years, Pratt Feeders has been increasingly involved with CAB in training foodservice and beef sales teams.

“Our industry has to become a little more transparent,” Bohn says. “The beef consumer is quite removed from the rural roots of years ago. We have to become advocates for our industry.”

That’s why the feedlot keeps looking for more ways to bridge the cultural and information gap between segments in the food chain.

From rancher to feeder, packer to purveyor and consumer, “everybody in the system is more willing to share information than they used to be,” he says. “All the volatility and higher prices in the system put more pressure on the need to share if we are all going to move ahead.”

$100,000 Up for Grabs with 2024 Colvin Scholarships

by Courtney Weekley | Mar 20, 2024

Carcass Quality Set to Climb Seasonally

by Paul Dykstra | Jan 4, 2024

With the arrival of the new year the beef market will rapidly adjust to changes in consumer buying habits. This will remove demand pressure from ribs and tenderloins, realigning the contribution of these most valuable beef cuts to a smaller percentage of carcass value

Raised with Respect™ Cattle Care Campaign Launched This Fall

by Lindsay Runft | Dec 20, 2023

« Older Entries

New demand index points to profit potential

By Miranda Reiman

September 19, 2011

The leading Angus brand has increased the number of pounds sold every year since 2005, but does that really mean demand for the product is soaring?

Economists said there was not enough information to tell, so Kansas State University’s Ted Schroeder and Master’s student Lance Zimmerman analyzed additional data and found that the answer is, “Yes.”

The methodology and results are explained in their research paper, “Defining and Quantifying Certified Angus Beef^® Brand Consumer Demand.”

“The demand for CAB has outpaced Choice product since 2002,” the paper says. “Demand for CAB increased 56% over the eight years and Choice demand increased 20%.”

In both cases, the biggest increase was from 2009 to 2010 (see Figure 1).

“Much of the 2010 demand growth had to do with export market opportunity,” Schroeder says, but also a return of restaurant visitors in 2010.

“We were a victim on the foodservice side and beneficiary on the retail side,” says Mark Polzer, CAB vice president of business development. In 2009, CAB’s foodservice business was down almost 5.5% and retail was up 9%, but 2010 brought good news in both sectors: foodservice increased 10% and retail by 20%.

CAB sales increased by more than 100 million pounds compared to 2009, and the brand’s cutout value increased more than $5 per hundredweight in deflated U.S. dollars. The paper notes, “There was not another year in the model where both per-capita consumption and real cutout prices increased relative to the previous year.”

Demand for Choice beef and demand for CAB products are closely related, but certainly not identical.

“The commodity product seemed to be more dramatically affected by negative macroeconomic factors, such as trade barriers and overall economic health,” the research states. “It is also worth noting that demand for Choice product appears slower to rebound during times of recovery than CAB demand.”

The index showed that strong international sales years (2003 and 2010) were also the two highest years for wholesale brand demand. International increases remains strong, on track to break the 2003 record this year as it claims more than 10% of the brand’s total sales.

“Future dramatic growth will depend more and more on our international side,” Polzer says. “But there are so many variables outside of the cattle industry that affect international demand.”

Regardless of where it’s sold, these increasing numbers bode well for producers. It can be hard to make a direct connection between farm-level prices and retail beef price stickers, but earlier research from John Marsh, Montana State University economist, looked at that.

He studied total U.S. beef demand from 1976 to 1999 and noted a 66% decline. That translated to a 40% reduction in fed cattle prices, and feeder-calf prices dropped 48% during that period.

The recent K-State research says, “Improving demand at the consumer and wholesale level can have an equally dramatic, positive influence on farm-level prices and production, and these effects can be illustrated by the success of CAB and the Angus breed.”

That’s backed by numbers: CAB premiums in the $5 per hundredweight (cwt.) range, video sale Angus breed premiums of $6.55 and 63% Angus-influence in the 2010 U.S. steer and heifer harvest mix.

“Any beef product line that has growing demand is likely to benefit the entire industry,” Schroeder says. “There may be some substitution of Choice to CAB, but additional substitution is coming from other proteins and competing products around the world. By having CAB growth, you’re enhancing domestic producers’ opportunities to profit.”

Continued increases of 5% to 10%, he says, would be very strong growth that represents value for farmers and ranchers.

“To fulfill that need, premiums for that product will flow back down from the processor to the packers, back to the feedlot and ultimately to the cow-calf producer who is influencing those genetic selections,” Schroeder says.

Although not 100% of the premiums are passed through the system, a portion is still significant.

“If feeders see that they can get $4 or $5 per hundredweight (cwt.) premiums from CAB-qualifying carcasses, they’ll very quickly bid that back into their purchases for calves that they think will have a high likelihood of attaining that,” Schroeder says.

“Beef demand woes historically have surrounded quality issues with beef products,” Schroeder says, recalling the 1980s and ’90s. “We needed to start offering customers a more predictable eating experience or we were going to see continually declining demand.

“Higher quality and branded products do that or they don’t last,” he says. “If they don’t deliver consistently they’re out of the game.”

$100,000 Up for Grabs with 2024 Colvin Scholarships

by Courtney Weekley | Mar 20, 2024

Raised with Respect™ Cattle Care Campaign Launched This Fall

by Lindsay Runft | Dec 20, 2023

Drought Impact and Cattle Industry Dynamics

by Courtney Weekley | Nov 8, 2023

« Older Entries

Ranch, beef, sales education rolled into one

By Miranda Reiman

You don’t hear of too many September graduations. But then again, there aren’t that many MBA programs that consist of ranch visits, meats labs and sales sessions.

Certified Angus Beef LLC (CAB) launched its Master’s of Brand Advantages program in late 2010 and the first class will receive their degrees at the company’s annual conference in Sunriver, Ore., later this month. The second class is in progress.

“Meat experience in sales is not as in-depth as it used to be,” says Deanna Walenciak, CAB marketing director. “As our industry has changed, there are not as many people working their way up through the cut shop to sales.”

The void makes people less prepared to face sales objections or confidently sell a premium product like the Certified Angus Beef^® (CAB^®) brand. The company set out to change that through an intensive, hands-on course encompassing three sessions and covering everything from cattle production to beef sales.

“They need to understand production agriculture and they need to have experienced it,” Walenciak says.

The first two classes have taken a trip to southwest Kansas, where they break down into small groups and spend a half day with Angus ranchers, visit a CAB-licensed feedyard and tour CAB-licensed packing plants at Dodge City.

Berry Bortz, who runs CB Farms near Preston, Kan., with his wife Carla, hosted a handful of the students this summer.

“We felt if they wanted to take the time to learn about our products, we owed it to the industry, and those people in particular, to tell them the truth,” he says. “We do have a good story to tell.”

The family narrated through a production calendar before driving out to the pastures where they keep their registered and commercial Angus cattle.

“They were awestruck at how many decisions and how much hands-on stuff actually happens out here,” Bortz says. “One of the guys made a comment, ‘The next time somebody asks me why a steak costs so much I’ll tell them it’s cheap. It should be twice as much for all the work that goes into it.’”

“All we’re doing is showcasing what we have every day as an industry, and that’s people committed to raising great beef,” Walenciak says. “There are so many misperceptions out there. The people in this class are the ones who are selling the ranchers’ products every day to the best chefs in the country. If they’ve never been to a ranch, they can’t tell the great story that we have with passion and enthusiasm.”

Tom Chamot of New York-based Palmer Food Services says the experience taught him about the level of animal care from ranch to feedlot.

“They are well-designed and managed facilities for the finishing phase,” he says with a note of confidence in answering questions about cattle feeding, including antibiotic and hormone use.

Each session follows a similar cram-packed schedule. In the meats-focused class, participants walk through the fabrication process.

“You need time, not watching somebody else do it or watching a video, but time with your knife in hand, breaking down a carcass,” Walenciak says.

The final part is all about application.

“If we give them all this knowledge, we really have to help them connect the dots,” she says. That means role-playing and practice. The class tackles statements they might hear out in the field ranging from implant usage and factory farms to price and quality.

“If we had a tagline,” Walenciak says, “it would be, ‘Product knowledge is the key to overcoming every sales objection.’”

CAB licensees apply for a spot in the MBA training. At the end of each segment, they complete a test and then it wraps up with a morning-long final exam.

“If you know the beef industry inside and out, you’ll be better at selling beef. If they feel they’re educated on the industry, they will become more valuable as a consultant to their customers,” Walenciak says.

Chamot is just one example of how it’s supposed to work.

“Producers have an unbelievable amount of care and integrity and pride in what they do and they do it for us,” he says. “I’m empowered with knowledge and confidence—my gun is fully loaded to answer questions I normally wouldn’t have been able to answer.”

The second class started in June, and Walenciak hopes the first alumni are just the beginning.

“These classes are phenomenal, but we can’t change the world with 20 grads,” she says. “In the very near future we want to have many, many more classes rotating through.”

Steak prices show strength of CAB brand vs. Choice

April 15, 2011

As cash cattle prices shot up to record highs in March and the futures markets showed incredible strength, consumers were asked to pay record prices for beef. Shaking off worries about the economy, they responded positively.

Ground beef and cuts from the chuck and round led the increase, but middle-meat steaks moved higher, too. Faced with record high prices for the most expensive cuts, more consumers opted to ensure the eating experience by turning to the Certified Angus Beef^® (CAB^®) brand.

“As middle meat prices rose, the CAB/Choice spreads widened,” said industry analyst Julian Leopold, of Leopold Foods. He has written the monthly “CAB Market Watch” column for licensees since January 2010, making note of relative prices for USDA Choice and CAB cuts.

Comparing year to year, CAB rib eyes rose 3.2%, from $5.58 per pound (/lb.) in March 2010 to $5.76 this March, while the Choice rib eye managed only a 2-cent increase. That amounted to a 40% increase in the CAB/Choice ribeye spread to $.56/lb., Leopold noted

He saw a similar pattern in the price relationships for CAB vs. Choice short loins and tenderloins. “The 16.1% increase in CAB tender prices, at $8.95 vs. $7.71 in March 2010, beat the 15.2% increase in Choice tenders,” Leopold said. “More importantly, the 52-cent CAB/Choice spread for tenderloins was even wider at 33.3%.”

The Iowa-based consultant made news in 2009 with an analysis of the relative wholesale prices for 15 CAB vs. Choice beef cuts, showing demand for CAB outstripped that for Choice for a five-year period that included the recession.

What do the spring 2011 prices mean? “Even in this higher-price environment—with record high cutout prices, abundant grading and weekly increases in beef production—it looks like we’re seeing improved high-end beef demand,” Leopold said. “Can this continue with high-priced gasoline, several global economic uncertainties and widespread unrest in the Middle East? Only time will tell.”

$100,000 Up for Grabs with 2024 Colvin Scholarships

by Courtney Weekley | Mar 20, 2024

Raised with Respect™ Cattle Care Campaign Launched This Fall

by Lindsay Runft | Dec 20, 2023

Drought Impact and Cattle Industry Dynamics

by Courtney Weekley | Nov 8, 2023

« Older Entries

CAB seeks clarity in GIPSA rules

April 15, 2011

Certified Angus Beef LLC (CAB) President John Stika sent a letter to USDA Secretary Tom Vilsack in late March to explain the branded beef company’s stand against current wording in rule changes proposed by the Grain Inspection Packers & Stockyards Administration (GIPSA).

The USDA agency last summer unveiled its proposed rule changes that govern livestock marketing. A divide soon appeared within the beef industry over lengthening the comment period, and whether the proposed changes themselves needed changes. “Fairness” debates began from coffee shops to editorials and letters to USDA expressing either support or concern over vague language.

At a USDA/Justice Dept. workshop on competition in Fort Collins, Colo., last August 27, in an open letter to Angus producers and in subsequent comments to GIPSA, Stika expressed concern over unintended consequences and called for further study because there had been very little.

By the end of the extended November deadline and after two private economic analyses quantifying costs and concerns, more than 60,000 comments had come in to GIPSA. Vilsack then announced USDA would conduct its own economic impact study.

“The issue seemed to fade a little, but in fact it has not gone away,” Stika said. “We owe it to Angus producers and all of our licensed partners across the beef industry to maintain an active role in helping USDA craft the best possible clarifications to the proposed GIPSA rules.”

The letter stated, “Pleasing the consumer is the single most effective and sustainable solution to maintaining an economically viable beef industry… Unless heavily edited, we believe the proposed rule will cause cattlemen and brand partners great economic hardships as their investment in premium genetics meet a constricted market.”

While not opposing the effort to better define terms, the letter noted, “it appears the kind of clarity being proposed negates the intent and opens the doors to a long series of lawsuits … litigation will lead to a reduction in the availability of value-based marketing arrangements.” Value separation would be minimized but “easier to defend,” the letter said.

Certified Angus Beef Board Chairman Steve Olson said, “This brand has worked for years to get ranchers premiums on their high-quality cattle through value-based marketing. Because the proposed rules may threaten these premiums, we must voice our opinion.”

The American Angus Association supports these efforts, noted Association Board Chairman Joe Hampton. “By working with Secretary Vilsack, we hope Certified Angus Beef can help insure that any changes to the existing GIPSA regulations allow for the continued expansion of quality-focused, value-based marketing options,” he said.

That’s what allows financial rewards for those who meet the growing consumer demand for products such as those bearing the Certified Angus Beef^® brand, said Association board member Leo McDonnell.

GIPSA has made it clear that its rules are not intended to “limit or eliminate the ability of companies to provide premiums to reward producers for providing certain quantity or quality of livestock,” McDonnell said “We will continue to stay engaged to ensure GIPSA stays true to these proposed intentions and to be clear that nothing in these rules will jeopardize a premium-based market.”

“Angus producers have much at stake because we have worked hard to add value to our cattle,” Hampton said. “We’re happy to provide input to help ensure the GIPSA rules will result in a vibrant, healthy market that rewards quality and enhances opportunity and choices.”

Stika concluded, “We have a long history with USDA and much common ground in seeking a better future for producers who aim to satisfy consumer demand. We look forward to reviewing the pending USDA economic impact study, and every opportunity to discuss solutions to our concerns.”

$100,000 Up for Grabs with 2024 Colvin Scholarships

by Courtney Weekley | Mar 20, 2024

Raised with Respect™ Cattle Care Campaign Launched This Fall

by Lindsay Runft | Dec 20, 2023

Drought Impact and Cattle Industry Dynamics

by Courtney Weekley | Nov 8, 2023

« Older Entries

Hide color and end-product value

April 12, 2011

Animal scientist Ty Lawrence knows that it’s what’s under the hide that counts.

The West Texas A&M researcher was in a beef packing plant one night when he had a revelation: “I’m looking down the stun line and the cattle that were coming toward me were a Heinz 57 mix of hide colors,” he says. “Then immediately behind me I could see the carcasses going to the hotbox. My thought was, ‘There’s a tremendous perception of value differences of the live animals, but when they cross the grading rail, where the true carcass value is determined, those value differences are minimized.’”

So he and graduate student Tyson Brown set out on a yearlong Texas data collection project they recently published in The Professional Animal Scientist. They tracked hide color on 18,575 animals and matched that up with subsequent carcass information. The twelve color categories included everything from Holsteins and blacks to reds, striped and whites.

“The factors that influence feeder calf value are largely evaluated via visual appraisal,” Lawrence says. “And there’s a lot of bias and perception of live animal attributes, yet those expectations aren’t always met when you peel the hide away.”

When they calculated yield, quality and other premiums and discounts, there was only a range of $2.01 per hundredweight (/cwt.) from the lowest valued phenotype color to the highest.

Multiplying that times carcass weight showed a $30 difference in gross carcass value. Whites and blacks topped that at $983.76 and $982.51, respectively.

“The black and the white cattle were worth significantly more than the red, red-white-faced, spotted or striped cattle,” Lawrence says.

The take home message, he says, is that you can’t tell much by color alone.

“Color is less important and knowledge of the cattle background, history, level of finish, days on feed, etc.—all those things—are actually going to determine if this animal receives discounts or premiums,” Lawrence says.

Take the black example, for instance.

“Other breed types have entered with blacks,” he notes. “If you could go into that database and extract only the higher percentage Angus cattle, they would probably look better for quality grade. But this gets back to phenotype versus genotype [which was not part of the study]. When a cattle buyer is driving down the alley at a feedyard, he or she may have no more knowledge than what the feedyard tells them.”

The research also looked at sex and found heifers may be unfairly discounted in the sale barn. Feeding differences aside, their carcass market value was $122.70/cwt. versus $122.67/cwt. for steers.

“When you get to looking at the carcasses, it would be hard to discount a heifer for carcass performance,” Lawrence says.

$100,000 Up for Grabs with 2024 Colvin Scholarships

by Courtney Weekley | Mar 20, 2024

Raised with Respect™ Cattle Care Campaign Launched This Fall

by Lindsay Runft | Dec 20, 2023

Drought Impact and Cattle Industry Dynamics

by Courtney Weekley | Nov 8, 2023

« Older Entries

CAB export expert on quality

by Miranda Reiman

Cattlemen know overseas markets are important to their bottom line. Maggie O’Quinn, of Certified Angus Beef LLC (CAB), recently reminded producers how significant they are to exporters.

Speaking at the Georgia Cattlemen’s Association annual convention March 31, the CAB executive account manager for Latin America and the Caribbean explained the value of trade relationships, the logistics of exporting, and why producers should care.

“You are the design engineers for the No. 1 thing that we export: quality,” she said. “Quality is our unique selling proposition.”

The U.S. is not a low-cost supplier like some competing countries.

“We are not going to be all things to all markets, but U.S. beef is known for quality from Dubai to Tokyo to Aruba,” said O’Quinn, who serves on the 2011 U.S. Meat Export Federation (USMEF) executive committee.

The quality niche is an import role to fill, because strong international demand last year added a record $153.09 per head to the value of each harvested animal, she said.

“They’ll use products that aren’t big sellers domestically,” O’Quinn said. “Who eats liver? My granny made liver and onions and I personally don’t like it, but thanks to Egypt and Russia livers add $6 per head in value.”

Japan and Korea are big markets for short ribs, so opening those back up has added more than $20 per head.

“The chuck, the round and the short plate now account for 52% of the export value of each animal,” O’Quinn said. “That’s compared to 42% coming from the middle meats.”

CAB is in 69 countries, and international sales represent more than 10% of the company’s total tonnage, but staff members are still working to introduce other places to high-quality U.S. beef.

“We’re truly developing the market for fresh beef in Trinidad,” she says. “Beef, in their minds, is this frozen, awful stew meat. It’s a challenge to shift from that mentality to get an upscale presentation and correct merchandising with refrigeration.”

That’s what O’Quinn and her team work on every day, but that’s just one of the challenges. The distributors and exporters that they work with face many hurdles in getting product from point A to point B.

O’Quinn shared an example: “To get from Tyson Foods, in Dakota City, Neb., to Faisal al Nusif in Dubai, United Arab Emirates, it takes a long, long time and a lot of work.”

It takes two weeks for one load of tenderloins to get from the packer to a distributor in Atlanta.

“The minute the product is received, the box label is sent for translation from English to Arabic,” she said. “Then the distributor has to physically open each box and apply an Arabic label to each piece of beef. It requires 12 additional people to handle this work and it takes two days.”

After all that, it’s inspected by USDA and receives export approval. The container, accompanied by letters and forms from USDA and the Georgia Health Department, is frozen and then loaded for shipping to the Middle East.

“It’s loaded on a boat and the first stop is Port Said in Egypt, then through the Suez Canal into the Red Sea, around the Arabian Peninsula, through the Strait of Hormuz and eventually into the Persian Gulf to the port city of Dubai,” O’Quinn said.

The product spends anywhere from 24 to 35 days on the boat, so by the time it reaches distribution channels in Dubai it’s probably already 50 days post-harvest.

“The freight cost is about $4,500 per container,” she said. “Then there’s the cost to legalize the documents, for those extra employees, the cost of the stickers, insurance, special storage and even extra financing costs.”

That’s why the going menu rate for a 10-oz. Certified Angus Beef^® (CAB^®) tenderloin in Atlanta is $35, compared to $65 in the world’s only seven-star hotel, Burj al Arab (the Arabian Towers).

The reason it’s worth that goes back to the inherent quality, O’Quinn said.

“You have a role in ensuring that, and in our ability to market quality,” she said. “Thank you for all you do.”

Certified Beef Brands

Historical sketch shows dynamite comes in small packages

By Kristen Odom

What began as an idea to create specifications for beef with a breed connection has sparked the interest of many over the years to create their own branded programs. The founding brand remains at the top, but the proliferation of others has arguably made the entire beef industry more consumer driven.

“The Certified Angus Beef^® (CAB^®) brand started in 1978 and, after a few years, others saw the success of that kind of program,” says David O’Diam, CAB brand extension manager. “Many of these brands have taken advantage of the fact that USDA will certify a program, giving validity to their brand in terms of the specifications they set forth.”

In the late 1980s, USDA began approving more programs under various schedules, many of which were not involved with Angus but focused on other beef characteristics.

Larry Meadows, chief of the Meat Grading and Certification Branch at USDA, explains that creating a program means specifying quality grade and yield grade requirements. Upon applying to USDA’s Standardization Branch, the document is sent to the Food Safety and Inspection Service and other USDA staff. Once all parties agree, the program is approved and officially published.

As of December 2001, 30 of the 41 USDA Certified Programs were Angus focused. That year, 20 programs had specifications of premium Choice or Prime, and 12 of those were Angus focused, but so were nine of the 12 Select programs.

By 2005, the total number of programs had increased to 63 while the number of Angus programs rose to 46.

And as of February of this year, there are 111 programs total with 76 focusing on the Angus breed, but only 29 of those were in effect in 2005. Twenty-four of the 43 premium Choice and Prime programs are Angus focused, but so are five of the six Standard or lower quality programs. “That shows us Angus does not necessarily equal high quality,” O’Diam says.

Through the years, the numbers fluctuate as new programs are added and others are removed.

“A lot of programs don’t survive,” Meadows says. Groups may have good ideas, “but their brands can’t compete in today’s very competitive marketplace.”

Cargill’s Sterling Silver program, not connected to any breed, was the second schedule approved by USDA and is still in existence. Though it has the same marbling criteria as CAB, it accepts A and B maturity cattle, whereas CAB accepts only A maturity.

O’Diam notes that almost three-fourths of the programs are Angus connected: “That shows the power of the breed.”

Meadows elaborates. “A lot of retailers are requesting Angus because the Angus breed is viewed very favorably by consumers. Firms look at CAB and see their market share and want to create an Angus-based program for their customers.”

About 80% of the product certified in the upper two-thirds of Choice goes to the CAB brand, explains Meadows.

When CAB made changes to its specifications in 2007, other programs converted the same way to fit the sorting process at packing plants. If CAB and other brands have identical requirements, then any product not sold through CAB can be sold through those others as a fallback.

“Packers are very, very good businessmen,” O’Diam says. “And ultimately, if it doesn’t make them more money in a CAB box, they aren’t going to put it in that box. We have to continue to be more relevant than any other brand, and in the packer’s mind that means not only marketability but ultimately profitability.”

Being the most recognized brand of beef in the country took more than product specifications, he adds, noting that all branded product is tracked from packer to consumer to ensure positive eating experiences.

“All of the 120 people that work for this brand from Ohio to Kansas and all across the U.S. wake up each morning thinking about how to build on that,” O’Diam says.

CAB presses on with quality and profitability even in a recession. “I think it shows the value of the brand that it continues to grow when most people are uncertain about consumer demand,” he says.

More choices, less Choice beef

Trying to please every beef customer takes more of the best

by Laura Nelson

You may also like

It’s time to pay attention

As the quality spread widens, prepared cattlemen profit

by Laura Nelson

You may also like

Testament to plan well executed

Pratt Feeders wins CAB award

by Steve Suther

You may also like

New demand index points to profit potential

By Miranda Reiman

You may also like

Ranch, beef, sales education rolled into one

By Miranda Reiman

Steak prices show strength of CAB brand vs. Choice

You may also like

CAB seeks clarity in GIPSA rules

You may also like

Hide color and end-product value

You may also like

CAB export expert on quality

by Miranda Reiman

Certified Beef Brands

Historical sketch shows dynamite comes in small packages

By Kristen Odom