Eleven to one—those were the odds the beef industry was up against for two decades. “We got $10 in new spending over that 20 years, meanwhile our pork and poultry competitors got $110,” said Nevil Speer, an animal scientist at Western Kentucky University. “You can’t grow an industry without new revenue coming in, and we basically worked in a stagnant industry for 20 years.” Speer presented as part of the Harlan Ritchie Beef Symposium during Midwest American Society of Animal Science meetings in Des Moines, Iowa in March.
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.”
Being good at what you do every time is no accident. “My dad said anyone can sell something once,” Prof. John Siebert told his ag business class. “It’s selling something multiple times to the same person that takes a lot of work and expertise.” On March 19, the Texas A&M agricultural economist asked four links in the Certified Angus Beef ® (CAB®) brand supply chain to share their experiences: CAB president John Stika; rancher James Henderson of Bradley 3 Ranch; Joe Boutte, director of business development for Houston-based Freedman Meats Inc.; and Ric Rosser, concept/executive chef for Saltgrass Steakhouse and West Coast Claim Jumper.
John Simons ranches with his family near Enning, S.D., where they’ve focused on reducing variability in their Angus-based cowherd for the last 20 years.“If your calves all look the same, they’re just a pretty package,” he says. “And pretty sells.” Sticking with one breed and bloodline for several years lets Simons produce calves that not only have the same phenotype but also perform similarly in the feedlot and on the rail.
Since its inception in 1978, the Certified Angus Beef ® (CAB®) brand has become perhaps the most recognizable worldwide. And for the past 21 years, Tracey Erickson has had a major hand in that unprecedented rise in the food world. She guided CAB’s entry into male-dominated foreign markets in the early 1990s as International Director, and since then, as Vice President of Marketing, Erickson has led the initiatives that resulted in today’s global presence.
You decide. Each time you buy a bull, keep a heifer or cull a cow, you choose a future for your herd and, collectively, for a beef industry that is either blessed or burdened with high prices. “I don’t want record prices because of the lowest beef supplies in 50-some-odd years, said a University of Missouri livestock economist. “I want the highest price because demand is pulling us along.” Most everybody in the cattle business would want what Scott Brown wants. There were certainly nods of agreement at the March 12 Midwest Section, American Society of Animal Scientists meetings in Des Moines, Iowa.
T-bones, sirloins, filets and strips—these are the beef cuts referred to as “middle meats.” Such steaks make up 12% of the carcass, but represent just under half of its total value. That and the difference in cooking method lead many to believe it’s the only place where beef grades matter. Not according to experts like longtime market reporter Bruce Longo, of Urner Barry, and the data he tracks.
Selling fed cattle on a live basis is no longer standard practice, and some day it could end up as no more than historical reference. “The old selling-them-live method has given way to formula sales,” says Mark McCully, assistant vice president for Certified Angus Beef LLC (CAB). Data from Cattle-Fax and the U.S. Department of Agriculture shows a sharp decline in cash sales in the past seven years, from 52.1% in 2005 to just 26% in 2012. The inverse of that is the steep gain in negotiated sales, like grid marketing and other arrangements, which moved up from less than half of sales to more than three-quarters during those years.
Record-high calf prices last year spelled good news for most U.S. ranchers, but there was an extra bonus for many of them. That came in the form of record-high premiums paid for Angus calves at auction compared to non-Angus contemporaries, as reported to Certified Angus Beef LLC (CAB). The database on more than 300,000 calves sold in 13,794 lots at 10 markets since 1999 is part of the company’s “Here’s the Premium” project.
Many people have a distinct strategy for purchasing a new pickup. They want certain features, they’re willing to pay more for this, but not that. They figure value and how much it’ll be worth for resale X-number years down the road. But when those same ranchers go to buy a bull, it’s hard to follow such a plan. Action at the auction can lead to price “opportunities” and buying less than they really wanted. Jim McGrann, emeritus ranch management economist at Texas A&M, says bull-buying should be more like a vehicle purchase and less like shopping the bargain bin on an after-Christmas sale.
We use cookies to ensure that we give you the best experience on our website. By continuing to use this site, we will assume that you are in agreement.OK
