Economic theory suggests more supply will lower the price, and higher prices tend to lower sales for a commodity. “A commodity like beef,” older textbooks might say. Premium beef has not always borne that out, particularly in the decade since the Great Recession of 2008, says CattleFax analyst Lance Zimmerman.
For many cattle across the United States that’s the difference in a marbling score of 492 versus 500. Those commodity Choice carcasses are just a few fat flecks away from upper two-thirds Choice and their share of the $50 million that packers pay each year for cattle earning that high-quality designation.
Extending a 14-year streak of year-over-year growth and the third year for sales above 1 billion pounds, the first and largest branded beef company reported record sales of 1.21 billion pounds in Fiscal Year (FY) 2018, ending Sept. 30. That was an 8.1% increase, or 91 million pounds.
Certified Angus Beef ® is the Brand that Pays®. At a rate of $8,500 per hour, 24-7, that was $75 million for 2017, up from the $52 million paid in 2015; the linking year came in at $63 million. That brings the 20-year total for CAB premiums to $688 million, more than half of it paid in the last seven years.
Beef packers bridge the gap between producers and consumers, but even “the largest packer in the world” is nothing without its suppliers, John Gerber said. The longtime procurement head for Tyson Fresh Meats set the tone. Every link in the supply chain from ranch to consumer has a role to play.
Hitting a target takes practice, careful calibrations, attempts and recalibrations over time. Cow-calf producers make decisions every day, but how many of those relate to the calves’ ability to realize their potential and hit a high-quality beef target? At the Certified Angus Beef ® (CAB®) brand’s Feeding Quality Forum this summer in Sioux City, Iowa, the brand’s own beef cattle specialist, Paul Dykstra, summarized the rancher’s dilemma.
When Steve Knoll went to buy a few Angus bulls to put on his registered Salers herd, it changed everything. “I was blown away with what the bulls were bringing. The bulls I thought I would just go and buy and bring home, I couldn’t afford,” says the Hereford, Texas, rancher. Instead, his trailer carried two registered Angus cow-calf pairs. One nursing a heifer, the other, a bull.
Vitamins are essential in keeping cattle healthy year-round. Past price spikes have producers looking at savings along with concerns about source and efficacy over time. Jeff Heldt, with Micronutrients Intellibond, explored cost-effective vitamin and mineral strategies.
Presenters at the Feeding Quality Forum, August 28 to 29 in Sioux City, Iowa, encouraged questioning the routine. More than 200 took in the two-day meetings, where they got practical tips to use now as well as the “10,000-foot view” to spur thought, said Justin Sexten, director of supply development for Certified Angus Beef LLC (CAB).
Each week, Nebraska cattleman Gerald Timmerman would flip open the Sunday Omaha World- Herald to scan the want ads… “just in case.”
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