Show me the money!

March 28, 2011

Mythbuster Monday addresses funding

Did you know Certified Angus Beef LLC is a non-profit company?

It’s not volunteer run nor do we make desperate fundraising calls, like others that might come to mind in that category. (I can assure you that I make salary. As much as I love my job, I do have to make a living, too.)

So that leads us to several myths that all go back to one big ‘ole fact:

Myth–Cattle producers must pay to have their cattle marketed as CAB. How else does the brand make money?

Myth–American Angus Association membership dues are diverted to support its branded beef subsidiary.

Myth–CAB pays restaurants and retailers to sell their product.

Fact—Those are all false and simply answered by explaining that we are entirely packer-funded. As we’ve noted before, we don’t own any cattle or product. We only own our brand and packers pay us a commission to use it.

When an animal is certified for the brand, a packer can then chose to market it as Certified Angus Beef ^®–and most of the time, they do. Why? They can sell it for more money, because the distributors know they can sell it for more money, because the restaurants and retailers know a consistent eating experience has inherently more value to their customers.

That pull-through demand has funded CAB for more than three decades, and put more than $300 million in grid premiums in the pockets of farmers and ranchers.

Packers pay an average of 2 cents/lb. for every pound sold as CAB. That amount is more for the higher value middle meats (think filet mignon and New York strips) and less (1 cent) for things like hamburger.

So here’s how it shakes out. This is a rough idea of where CAB tonnage comes from:

That money, our annual budget, is reinvested in the program. We push marketing efforts, help explain the brand to chefs and work on consumer education. We work to open up export markets. We create recipes and design menus. The Black Ink team (otherwise known as the Supply Development and Industry Information Divisions) works on things like research and education on the cattle side of the business, hoping to increase supply. All of this in hopes that that brand we own will be even more valuable and relevant to our licensees. We want partner feedyards to see increasing premiums paid for cattle that make CAB. We want all the folks on the product side of the business to see increased sales, customer loyalty and satisfaction when they use the brand.

We need you to keep producing quality (and getting paid for it) to make sure this whole process keeps working.

May your bottom line be filled with black ink,

~Miranda

You may also like