Continual Improvement Drives CAB Acceptance Rates

The Certified Angus Beef fiscal year wrapped up in September, offering the chance to measure successes and challenges for hundreds of the brand’s partners. Cattlemen who supply the brand are similarly afforded a chance to review years of quality improvements in cattle and carcasses.

The total pounds of Certified Angus Beef ^® brand product sold is the downstream measure that keeps revenue flowing for all parties. Rather than reverting to a “commodity in volume” mentality, think of it as “pounds of premium product” sales. The past year marked the tenth consecutive year that brand sales have topped one billion pounds. This is impressive for the brand, given the year was constrained by significantly fewer fed cattle harvested. In fact, the 5.77 million certified carcasses represent a 2.9% decline in carcass supplies for the brand than last year.

Slight year-over-year improvement in the brand’s carcass acceptance rate drove brand suppliers to achieve a new record of 37.6% of eligible carcasses meeting the 10 required carcass specifications. Those close to the feedlot sector understand that escalating days on feed and finishing weights have added to average carcass marbling achievement this year. While impactful in the short term, the long term trend is nearly linear, tracking the brand’s acceptance rate from just 14% in 2006, the lowest in modern history, to increase 170% in 20 years.

Just as we detailed in the last Insider, carcass weights have increased mightily in the past few years. The brand’s average carcass weight for the fiscal year was 921 lb., a 22 lb. increase over last year and 38 lb. over two years. This shored up a portion of the decline in carcass production volume brought down by idled processing speeds. It appears that heavy weights are a fixture of the current market environment with end-users begrudgingly accepting this reality a few years ago.

Finally, Certified Angus Beef ^®  brand Prime sales were a highlight of the year as the trends we’ve reported on in the Insider played out in annual sales reports. It’s no surprise given that “taste” is the most important driver in consumer decisions when purchasing protein. This, plus the fact that a record 13.6% of all CAB carcasses were CAB Prime last year, a 3.6% increase in a year when total certified head counts were lower. Elevated CAB Prime carcass supplies opened the door to record sales volumes. While not without challenges, the past year has been very successful for CAB. It can’t be overstated how important growing consumer demand for our product has been in the past few years. It’s due in no small part to the concerted effort and pressure cattlemen have placed on carcass quality for two decades.