Feeding Quality Forum dates set for August

By Steve Suther

When you’re feeding cattle, information can be worth more than the feed. That’s why many customer-and consumer-oriented feeders plan to take in the 7th annual Feeding Quality Forum in Grand Island, Neb.,on August 28th, or Amarillo, Texas, on August 30th.

Each year those who attend rate the forum as one of the best among such programs. “Our goal is to deliver timely information critical to managing a successful feedlot business that is focused on the high-quality beef market,” says Mark McCully, Certified Angus Beef^® brand assistant vice president for production.

Registration is $50 if submitted by August 6th; after that, space permitting, it will be $75. Informational sessions begin after the sign-in at 9:30 a.m. and a quick welcome at 10.

First on the agenda and back by popular demand, Dan Basse, AgResource Company, will discuss market outlooks from local to global for protein “foodstuffs” and feedstuffs.

“Dan Basse is a staple on the program,” says McCully. “He always provides a timely and insightful perspective into the ever-changing commodity markets.”

Next up, Shawn Walter, Professional Cattle Consultants, will share what his industry-leading database is telling him about the impact of increasing carcass weights on feeders, fabricators and foodservice businesses.

After the 12:15 lunch featuring the Certified Angus Beef brand, the afternoon session will move on to three more sessions: breaking down cutability and carcass merit, dealing with declining inventories amid excess feeding and packing capacity, and a perspective look into the current meat issues.

The seminar, sponsored by Pfizer Animal Health, Land O’ Lakes Purina Mills, FEEDLOT magazine and CAB, should adjourn at approximately 4:15 p.m.

To register, visit www.cabcattle.com/events, or contact Marilyn Conley by phone at 800-225-2333, or by email atmconley@certifiedangusbeef.com.

What’s hiding?

Several factors influence USDA’s black-hided numbers

By Miranda Reiman

Black-hided. It’s the initial requirement for more than 80 beef brands certified by USDA.

That also means it’s the first limiting factor for supply of programs like the largest and longest-running of those: the Certified Angus Beef^® brand.

Total federally inspected fed-cattle harvest is the first number CAB packing director Clint Walenciak looks at. “The matrix of what drives total CAB pounds starts with that, and then it would be the percent that’s black-hided,” he says. “Then we apply our 10 carcass specifications to narrow that down even further, so that we’re running right at 24% today.”

That’s why the company has tracked black-hided numbers since 2004, and USDA now reports a percentage of “A-stamp” carcasses in the harvest mix.

“The fragmented nature of our industry means the only place we can truly capture how many cattle in the U.S. beef cattle supply are black-hided, or Angus-influenced to some degree, is at the packing plant level,” says Lance Zimmerman, CattleFax analyst.

That number has trended upward since 200 to level off and settle back to 62.9% last year, an obvious majority. Yet many are surprised the percentage isn’t higher.

“When you look at different surveys that estimate bull turnout in the population, they typically runabout 70% Angus, and Angus bull sales continue to be strong, so some of those numbers are counter to what we’re seeing,” Walenciak says.

Indeed, the 2011 Western Livestock Journal Bull Turnout Survey had the Angus breed leading all others with 71.5%, and that was down a bit from the 2009 mark.

So is it a case of bad math?

Walenciak and Zimmerman say no. It’s a matter of looking at the number of native black-hided cattle compared to outside factors like Mexican and Canadian feeder cattle imports, Canadian finished cattle imports and fed dairy cattle.

Those four categories can have a “dilution effect,” says Walenciak. “As we see the U.S. fed [harvest] decrease the past year-and-a-half, those numbers become a higher percentage of the total.”

They made up 16.1% of the total harvest mix in 2004 compared to 18.4% in 2011.

Walenciak and his team put a value on the sway each has on the A-stamped percentage. For example, Canada lags the U.S. in black Angus influence, so they applied a 40% black factor to total imported Canadian fed cattle for each year. They estimated Mexican feeder cattle at 20% black.

“That’s based generally on what we understand Angus genetics to be there,” Walenciak says. Such adjustments arrived at a native black-hided percentage 12 points higher than the all-inclusive USDA number. It rose from 61.5% to its peak of 74.9% in 2010, and stood at 74.2% last year.

“The upward trends command a greater portion of my attention than the steady to slightly softer year that may have showed up in 2011,” says Zimmerman.

Judgments based on just one year are “dangerous,” he adds, especially considering a smaller cowherd and drought effects. Still, many are intently watching that dip in numbers.

“We have our best guesses on why that’s occurring, like slight heifer retention and those being a very high percentage black,” Walenciak says.

Although there’s no way to track that, Zimmerman agrees it makes sense.

“If we were just putting black animals into the fed cattle mix [without retaining heifers], eventually we’d have seen those numbers drop off, but we’re clearly producing more black cattle. Most likely that is not only from Angus bull purchases, but from retaining those offspring in the herd as well.”

It’s easier to put numbers to other variables.

Zimmerman notes the wide year-to-year swings in some of those subset populations, like last year’s Mexican feeder cattle imports at a record high for the 2004-2011 timeframe, at 1.4 million.

“A large part of that influence was just like our friends in Texas, Oklahoma and New Mexico, further south that drought continued,” he says. “The Mexican producers were no different in that they needed to liquidate cattle, wean early and send to market. That contributed to a much larger number of Mexican cattle than we’ve seen before.

But in 2008, Mexican feeder imports were as low as 702,873. Last year’s 1.4 million represents a much larger influx of a much more diverse cattle population.

Exchange rates and policies have added to the variability in Canadian imports, both feeder and fed cattle, from very little in 2004 to peaks in 2007 and 2008.

“They have been going through their own cowherd reduction the last few years,” Zimmerman says. “So those give-and-takes can have a significant influence on this hidden calculation of the black-hided number.”

Despite all that “noise” in the data, there are two messages this black trend reveals.

“If you look at the ’90s and early 2000s, it was very common for a producer to market his cattle as ‘good, reputation blacks,’” Zimmerman says. “This shows that those good reputation blacks are pretty common in the marketplace. It’s really important for a producer to take advantage of any extra detail and data he can get his hands on to show his Angus cattle are worth more than just average black-hided cattle.”

Walenciak hopes ranchers will make more of those top-level animals, because just being black-hided isn’t enough.

“As we grow the demand for high-quality beef, it’s very important for us to keep that consistent supply so retailers and restaurateurs can have confidence in the reliability of that supply,” he says.

Market development, selection tools boon for Canadian beef

by Steve Suther

Cow-calf ranchers can’t control weather and markets, but price signals guide something that can be controlled: herd genetics.

Larry Corah, Certified Angus Beef^® brand vice president, told a group of Saskatchewan producers in May about the history of markets signaling with more dollars for higher quality beef. He said selection and management can help any producer get in on those dollars.

“Premiums are the first benefit of quality cattle,” he said, noting that U.S. data shows a $35 to $50 per-head advantage in value for cattle that qualify for CAB vs. those lower Choice (AAA in Canada) that do not meet CAB quality specifications. Select, or AA grade cattle give up $50 to $80 per head compared CAB qualifiers, but cattle making CAB Prime are worth as much as $200 per head more than lower AAA.

Years of focused marketing has trained thousands of brand partners and developed increasing demand around the world. Marketing is the key to bringing those higher values back to the ranch, Corah said. “Producers, feedlots, packers, retail, restaurants–we’re all part of the production chain. We have to build networks and work together to pull in these extra dollars at every level.”

It is easy to see the value of quality in premiums, but higher quality cattle are often more efficient, too. An analysis of data on more than 440,000 steers across feedlots in several U.S. states showed pens of high-quality cattle have greater average daily gains and total gains on a finishing ration than pens of low-and middle-quality cattle. Bottom line, the high-quality steers earned $11 to $17 per head more profit than the other two quality levels.

“We sell everything based on dollars per pound, so for many producers, pounds reign supreme,” Corah said. “But the point is, you can have quality and pounds. The two go hand in hand.”

Unlike premiums and feed costs, customer satisfaction does not directly translate into dollars and cents, but ultimately, it underwrites cattle prices.

Because beef is a more expensive protein, consumers have to want it and believe it is worth more or they will switch to a cheaper alternative. “Right now consumers are driving the demand to get an extremely high-quality beef eating experience, and they are willing to pay for it,” Corah said.

This demand has created a ready-made market opportunity. Last year CAB brand grocers and restaurants sold 32 million pounds of the beef in Canada, but only half of it originated there.

Producers can take advantage of this opportunity by using selection tools, data and communication, Corah said. Expected progeny differences (EPDs) can help in selecting bulls to create cattle that satisfy the high-quality demand, and feedyards can share performance data back to the ranch. At every level, those registered with the new BIXS program (www.bixs.cattle.ca) can find individual carcass values as well, he noted.

Earlier this year, CAB added another tool to the box for anyone who wants to know more about potential for gain and grade. Marbling (intramuscular fat) is the key factor in high-grading beef, and it’s also a highly heritable trait, Corah said. GeneMax™ (GMX) is a new DNA test for high-percentage Angus cattle to rank genomic marbling and post-weaning growth potential.

At $17 per head, it may be the most affordable option for such testing, available through http://www.cabpartners.com/genemax/index.php. In less than four weeks, producers can have results that take much of the guesswork out of marketing options. Moreover, applying the technology to heifer selection can make for faster genetic improvement in a beef-cow herd.

“There is a market out here for a higher quality product for anyone who can deliver it; the challenge is to focus on the right genetics to get that done,” Corah said. “With the cattle you have now and the genetic tools available to improve, Canadian cattlemen are in a prime position to fill the demand.”

Nebraska Sandhills rancher leads CAB board

by Meg Drake

A full-time, professional cattleman provides the critical connection between the <em>Certified Angus Beef</em><sup> ®</sup>brand, its 30,000 producer-members of the American Angus Association and their thousands of customers. Arlen Sawyer, chairman of the CAB board of directors, fills that bill this year.

With wife Becky, he owns the seedstock Angus ranch A & B Cattle near Bassett, Neb.; daughter Jessica in Billings, Mont., and son Adam in Roswell, N.M., are involved as well.

“I’m lucky enough to make a living in the cattle business and live in an area where cattle is the major industry, where people take so much care and pride in what they raise,” says Sawyer. “I take that appreciation to board members and staff at CAB who may not have that luxury.”

The third-generation Angus producer moved to the Bassett area from South Dakota the year after marrying in 1975. “Growing up in a seedstock operation and then living here in the Sandhills for thirty-some-odd years makes us very aware of the nuts and bolts of the core cattle business,” he says.

Demand for Angus cattle was not as strong in those early days. “Back in the ’70s and early ’80s there was a movement in the beef industry that we had only to be concerned about putting edible protein forward, and we had to do that in an efficient manner,” Sawyer recalls.

Aware of CAB since its inception in 1978, Sawyer credits the brand now with stimulating more demand for Angus cattle over the years since then. “I think there’s a definite role for beef: it is a matter of taste, it is a matter of a quality eating experience. If we can’t provide that, then we have to compete on a price basis with other proteins and that makes it difficult.” He also credits CAB’s carcass specifications and monitoring system for “making sure that quality eating experience is never at risk.”

Meanwhile, the market rewards high-quality cattle. That fact plus strong competition bodes well for CAB supplies. Sawyer says Angus breeders are the most competitive there are: “That forces you to produce a better product.”

Aside from raising seedstock, Sawyer made it a point to become familiar with all sectors of the production chain. “Several customers have retained ownership, and we have fed out some of our own steers as a means to collect data for feedback.” He notes that documentation of feedlot and packing house performance helps everyone when trying to breed for specific traits.

Sawyer’s solid production background is a great asset to CAB. “Arlen does a nice job of keeping our focus squarely on the mission that has guided us since 1978,” says company president John Stika. “In an industry that constantly throws new things at us, we just make sure everything we do adds value to registered Angus cattle.”

One of the highlights since being appointed chairman in December, Sawyer says, was attending the grand opening of the CAB Education & Culinary center in Wooster, Ohio, in May. “It became evident to me that this is a big step in making sure the chefs and preparers are involved in bringing out the value and the taste of this Angus beef.”

Encompassing all the links that make up today’s production chain, CAB shares a common goal with its chairman, who confronts each day with a positive attitude and a simple solution: “The only option is to get better.”

Dinner plate to farm gate education

CAB training center opens to join ranch, retail, culinary cultures

by Miranda Reiman

The Certified Angus Beef®(CAB®) brand celebrated a new ability to link ranchers to consumers in May, sharing the party with reporters, editors, broadcasters, chefs and “foodies” from across the United States.

Not surprisingly, the CAB Education & Culinary Center’s Grand Opening was an educational event. It started with a culinary “dine-around” in Cleveland the night before shuttling from that city’s Ritz Carlton Hotel to Wooster, Ohio, on Saturday, May 5, to experience every aspect of the training hub that adds value to beef.

Yes, there was an aura of hospitality and catering to appetites, but that’s right in line with the best culinary and foodservice traditions. Appetizers at Hodge’s, a new eatery rooted in the “Hodge Podge” food truck, gave way to main courses at The Greenhouse Tavern, known for being “certified green” as well as its CAB entrees. Throughout the evening that featured wine pairings—capped by desserts at Lola’s—chefs and media enjoyed and chatted about their food and fascinations.

Guest chefs were celebrities Howie Kleinberg of Bulldog BBQ in Miami, Fla.; Rory Schepisi of Boo tHill Saloon & Grill in Vega, Texas; and Michelle Brown of Jag’s Steak & Seafood in West Chester, Ohio.That team would join in preparing the Saturday banquet at the Center.

Welcoming the group to a Meats 101 class that morning, CAB President John Stika called the facility “a milestone but not an endpoint,” representing the unique nature of the brand that spans the beef industry. A wide range of complementary skills among the staff help partners succeed at every level.

Starting at the ranch, the best beef genetics in the world may fall short if the next owner doesn’t realize what he has and maintains full potential for excellence. That same risk lurks at every link in the beef supply chain, all the way to the consumer.

But with enough knowledge, common purpose and insight, more cattle will qualify for CAB and add value for everyone from ranchers to the 15,000 partners worldwide.

CAB meat scientist Phil Bass led the class in exploring individual muscles within the wholesale cuts, noting such hands-on work helps licensees please consumers profitably. Just slicing another inch of the primal to put a “sirloin steak” on the tray for the retail case may involve four muscles that have been severed at several angles. The result is too big and variable in quality.

“When you follow the seams and pull out some individual cuts like the tri-tip and sirloin filet, you can market higher quality, smaller cuts,” he said. It all adds to consumer satisfaction.

And since the consumer is the source of every dollar in the beef supply chain, a whole-system approach is the best way to get more of those dollars back to the producers who create cattle with the potential top lease.

The CAB staff that has worked for decades to share expertise among brand partners can now “take that to a new level,” at a time when connections are increasingly important, Stika said. “This Center is a bridge that connects the cultures within the beef communities from the ranching side to the retail, foodservice and consumer sides,” he added in remarks before a lunch of cold-smoked and hot-grilled tri-tip from CAB Chef Michael Ollier.

Just a couple of days prior, the Center had been the venue for an “International Roundup” of licensees from 15 countries as they located, cut, cooked and tasted specialty beef cuts, Stika noted. Whether from across town or the other side of the world, brand partners will continue to use the meat lab and culinary school to learn more about retail case merchandising and creative menu planning.

To complete the reverse tour and move from dinner plate to farm gate, the group traveled by bus to Rod and Laurie Ferguson’s Chippewa Valley Angus Farms at Rittman, Ohio. That side was quite familiar to the farm media, but there were new lessons in how CAB demonstrates its producer link and how the Fergusons put a caring face on the concept of the 33,000 rancher-owners behind the brand.

Back for the five-course banquet in the evening, guests were amazed at the flavors and creativity that showcased the cuts they had fabricated out of primals during the morning session. CAB Chef Scott Popovic joined forces with the celebrity guests and welcomed another, pastry chef Kara Swortchek from Red, the Steakhouse, to bring the best out of the best.

CAB producer board members joined in the evening, and co-founding figures Mick Colvin and Dr. Bob VanStavern were recognized as the namesakes for the Center’s two conference rooms.Everyone could hear the sizzle, enjoy the mouth feel, see, smell and taste how the high-quality beef’s value was maximized, captured, capitalized and realized, made to work for all others in the chain.

Beef consumers and flavor

by Miranda Reiman

When it comes to food, the alternatives are endless: spicy or bland; Mexican, Italian, Asian or Southern-style comfort dishes. But when it comes to beef, almost everyone agrees on a few features.

“Consumers tell us that higher fat levels are more desirable; they like it better,” says Mark Miller, meat scientist at Texas Tech University. “We’ve found that marbling level has a really big impact on the consumer’s desire for beef.”

He referenced a thesis by Travis O’Quinn, “Consumer Acceptance of Beef Strips,” comparing strip loins from USDA Prime to Select, where overall liking declined from 95.8% to 79%. That linear downtrend mirrored the flavor ratings, which showed 97.5% of the Prime steaks were acceptable. Those scores dropped with each successive grade break: 94.2% for high Choice, 92.4%for low Choice and 85.8% for Select.

“Overall liking was most highly correlated with flavor,” the thesis states, but tenderness and juiciness ratings followed similar patterns. “That shows why the Certified Angus Beef^® brand is so effective. It has increased all that market share based on flavor,” Miller says.

Consumers rated each steak with a “perceived quality level,” such as unsatisfactory, good everyday quality, better than everyday quality and premium quality.

For Prime, 35.8% called it “premium quality” and 34.2% said it was “better than everyday quality,” for a combined total 71% above average.

The high Choice had 55.8% in those two upper categories, compared to Select at just 29.2%. The USDA quality grades do their job, Miller says.

“They’re based on what will give you the ultimate level of consumer satisfaction,” he says. Juiciness is controlled by degree of doneness, so that leaves flavor and tenderness. Since quality grades include a maturity component, that helps with the latter.

“On top of that we use marbling, a factor that’s tremendously related to all three,” he says.

Research a decade ago showed tenderness contributed half of overall beef eaters’ satisfaction, followed by flavor at 40%.

“Tenderness is by far the most important factor, but once a steak meets a consumer’s threshold for tenderness, then flavor becomes the sole driver,” Miller says, explaining flavor was a main focus in the latest study.

Surveys reveal more than 91% of the beef in today’s retail case meets tenderness expectations.

“Tenderness is the most important factor and we need to keep on top of it—we need to keep surveying and monitoring it. We need to keep progressing,” he says. “But flavor is an area where we can make a lot of progress on our competition, especially in the international market.”

The Texas team is already into research that digs deeper.

“We’ve been working to characterize not only what it is that makes flavor important in beef, but trying to identify the individual compounds that make a difference,” Miller says, noting collaborative projects in Australia and Ireland.

Using instruments to analyze the chemical makeup of the aroma that wafts from off varying qualities of steaks, for example, may help meat scientists determine what’s behind taste at different marbling levels.

“The take-home for cattlemen is, we have a product that we need to keep improving so we can give it the flavor, juiciness and tenderness that the consumer wants,” he says.

Team building in the herd

The winning drive to beef quality

By Laura Nelson

Preventing a “draft bust” in quarterback selection is the first step to build a winning team, says Pfizer Animal Health veterinarian Jason Osterstock.

But the genetic epidemiologist isn’t talking about football or the gridiron; he’s analyzing sire selections for beef cattle herds.

With cattlemen as general managers of the ranch team, their No. 1 responsibility is to make personnel and roster decisions, like what sires and cows will drive genetic improvement.

“The herd sire is there for the long term, and his ability really lays out the success of the operation,” Osterstock points out. “We each invest a lot of effort, attention and diligence in evaluating those herd sires before we draft them.”

Whether you go with a proven free agent with a lot of hits and high accuracy numbers or a young, unproven draft pick, that herd leader has to be surrounded by a line that stands up to his genetic ability, too. In Osterstock’s analogy, presented at a 2012 Cattlemen’s College seminar, that’s the cowherd.

“They’re the ones really doing the work, and they have to match up with the QB’s potential. It doesn’t matter how good the quarterback is if the line, or in this case your cows, can’t keep him standing upright.”

So how does an expert manager put together a team that’s Super Bowl ready? Systematic selection that utilizes the latest DNA-testing resources, Osterstock says. There are well-established methods for incorporating those predictions into the EPDs (expected progeny differences) for genomically tested registered bulls, but commercial females and their progeny represent a new opportunity.

“When we look at the benefits of genomic technology, it’s really about avoiding the draft busts,” he says. That goes for the cow line, too. “We have to accumulate enough information so that we can make investments in younger animals with a fairly minimum amount of certainty in their long term potential. And we have to do it in a much more systematic, intelligent and strategic way.”

The competitive advantage DNA technology has against other selection tools is its early predictive ability, like reading the other teams’ playbook, even before they get a peek.

“We can really get a feel for those traits that we’re most interested in for our operation’s profitability, and then make those decisions as soon as possible.” Osterstock says. “The early-in-life part is a terribly important issue here because that’s where the opportunity is.”

He points to the cheering fans in the grandstands–steak-loving consumers–as the most critical piece of the game plan. After all, even a champion team isn’t worth much if it doesn’t have a fan base to fill the seats, pay the salaries and rave about the experience.

“Ultimately,” Osterstock says, “we need to make sure we’re making those decisions based on consumer eating satisfaction. We can expend a lot of time and effort, but we are going to have a hard time ensuring a place at the table for beef and ensuring a competitive market for our product if they’re not happy.”

Those traits focus predominantly on marbling and tenderness.

“If the consumer perceives that a certain type of beef has a more favorable eating profile, then they are certainly willing to pay for it,” he says. “Those with that kind of product will be rewarded.”

Market volatility calls for strategic investment in technology that help produce sought-after beef more efficiently. But before taking genetic selection to the make-sure level of DNA testing, Osterstock suggests finding answers to three questions:

Can I make real improvements? Carcass traits carry heritability of 35% to 40%, so the veterinarian says, “Yes, we can make systematic, cumulative genetic progress and improve the herd’s genetic merit over time.”
Which ones should I test? “Focus on the young animals,” Osterstock says. “That’s where the most opportunity is.” Pay mind to the selection tools you currently use, such as EPDs, health information and eye appeal. Sort off the animals that don’t make the cut on those standards; then collect samples for DNA testing on the rest.
What test should I use? “Choose a test that provides information for the traits that you are going to put an emphasis on,” he says. Quarterbacks are usually the highest-cost member of a team, and for good reason. You want more information on him, so buy a bull with EPDs enhanced by an extensive DNA test that examines many traits.

The female “linemen” may need a smaller, more focused test to evaluate their abilities and keep costs under control. “In that situation we might choose to use a test like GeneMax™ that would give us an opportunity to assess a replacement heifer’s genetic potential for specific traits like marbling and growth,” Osterstock says.

That’s provided the heifers—or steers that could be evaluated for feeding and carcass potential—are 75% or more Angus, since GeneMax ties into the American Angus Association’s expansive genetic database, he adds.

Once the DNA test of choice has been selected and put in play, the final drive is to rank the animals’ genetic potential from top to bottom. “Then, draw a line in the rank and say, ‘these animals do not fit what I had envisioned for my operation and therefore I choose not to select them, and these other animals do fit my goals,’” Osterstock says.

As animals above the line gain influence over herd genetics and build year-over-year improvements in carcass traits, the odds improve for Team Beef winning the Super Bowl of long-term demand, he says. “It’s a plan that assures we deserve a place at the dinner table.”

CAB rewards student commitment with Colvin Scholarships

Seven university students from across the Unites States have won $21,000 through the Certified Angus Beef^® brand Colvin Scholarship. The awards recognize their commitment in both activities and scholastic achievement.

“These students are the future of the beef industry,” said John Stika, Certified Angus Beef^® brand president. “This year’s graduate-level scholarship is an exciting addition to the program, and we are happy for the opportunity to extend a helping hand for tomorrow’s leaders.”

2012 Undergraduate Colvin Scholarship Awards:

$5,000-Loni Woolley, Grandview, Texas – Texas Tech University
$4,000-Meghan Blythe, White City, Kan. – Kansas State University
$3,000-Bailey Harsh, Radnor, Ohio – The Ohio State University
$2,000-Lindsey Grimes, Hillsboro, Ohio – The Ohio State University
$1,000-Wyatt Bechtel, Eureka, Kan. – Kansas State University
$1,000–discretionary award to Faith Jurek, Lubbock, Texas – Texas Tech University

2012 Graduate Colvin Scholarship Award:

$5,000–Rebecca Acheson, Windsor, Colo. – Colorado State University

The scholarships began in 1999, when CAB co-founder and executive director Louis M. “Mick” Colvin retired. The non-profit company and its licensed partners worldwide acted to honor Colvin’s inspiration for others to be their best and make their dreams a reality.

A portion of the undergraduate selection criteria was based on an essay to, “Describe the variety of branded beef programs in today’s marketplace and how they help or hinder the consumer.”

Among a variety of perspectives, the $5,000 undergraduate winner Loni Woolley wrote, “The average consumer wants to feel good about the purchase of a branded product.” Those may tout taste, tenderness, organic, antibiotic-free, grass-fed or any number of attributes. “Brands allow consumers to choose which of those traits appeal to them and most fit their lifestyle,” she wrote. Once they find that fit, “they will become a repeat buyer that relies on the excellence of that particular brand.”

The Texas Tech University (TTU) senior in animal science, meat business emphasis, plans to continue the meat science education in graduate school there. Woolley, Block and Bridle president and member of the American Meat Science Association, was part of the TTU2011 National Champion Livestock Judging Team.

Loni Woolley

Meghan Blythe

Bailey Harsh

Meghan Blythe, a junior in agriculture economics at Kansas State University, expanded that field all the way to Brazil in January and will study international animal science and agribusiness in China this May. The president of Kansas Junior Angus Association and board director of the National Junior Angus Association was awarded a $4,000 Colvin Scholarship.

Bailey Harsh is an Ohio State University (OSU) junior in both agriculture communications and animal science with a meat science emphasis. She is an OSU College of Food, Agricultural and Environmental Sciences (CFAES) Ambassador and member of the OSU Meats Judging Team. After earning a graduate degree in agriculture communications, Harsh plans to work in agricultural public policy. She received a $3,000 Colvin Scholarship.

Lindsey Grimes, a junior at the Ohio State University in animal science with an emphasis in meat science, earned the $2,000 Colvin Scholarship award and hopes to obtain a master’s degree in meat science at KSU. In December 2010, Grimes studied human and animal interactions in New Zealand. She is a foundation director for the National Junior Angus Association Board, an OSU CFAES ambassador, and committee chairman for OSU Saddle & Sirloin Club.

Wyatt Bechtel, senior in agricultural communications and journalism at KSU, is the National Agricultural Communicators of Tomorrow (ACT) editor and a partner in his family’s commercial cow-calf and stocker cattle operations. Upon graduation, the $1,000 Colvin Scholarship winner plans to work in the communications field for the beef industry.

Faith Jurek, TTU agricultural communications major, hopes to move on to graduate school in meat science there after graduation in December 2012. Jurek is the president of the university’s ACT club and the agricultural council representative for the TTU Meat Science Association. Last summer, she competed in the Australian International Meat Judging Contest and gained a global perspective of the beef industry. She received a $1,000 Colvin Scholarship.

Lindsey Grimes

Wyatt Bechtel

Faith Jurek

Rebecca Acheson

Rebecca Acheson is the $5,000 graduate-level Colvin Scholarship recipient, and was a top undergraduate scholarship winner in 2008. She conducts doctorate-level research at Colorado State University in the area of beef cut nutrition.

As consumer dietary concerns continue to increase, “it will be essential that branded beef programs add a nutritional side to their marketing plan,” wrote Acheson, describing the benefits her research will have on high-quality beef production. “This project has been designed to encompass all parts of our industry, which includes companies that produce the highest quality beef.” When her work is completed, the public will have nutritional information for “every cut of beef from the Select to upper-two-thirds Choice quality grades.”

Following graduation in August 2013, Acheson plans to work in beef research and development, and become an active spokesperson for the beef industry.

The CAB Annual Conference golf outing and auction raise these Colvin Scholarship funds. Top undergraduate and graduate recipients win all-expense-paid trips to the 2012 Annual Conference in White Sulfur Springs, W. Va., where they can interact with leaders throughout the production, packing, retail and food service industries.

ATI and CAB team up to educate

By Emily Kruegar

Nobody can illustrate cattle comfort better than, well, a comfortable cow.

Even the best speakers can’t make an audience feel what it’s like on a farm. There are no words that can replace the actual experience of seeing cattle first hand—watching them roam the pasture or eat out of the feed bunk. That’s why Certified Angus Beef^® brand has a newfound tradition of sorts. Nearly every time sales partners travel to the Wooster, Ohio-based headquarters for training and education, the company takes them on a field trip. The Grace L. Drake Agriculture Laboratory, part of the Ohio State University’s Agriculture Technical Institute (ATI), just miles from the CAB office, is run as a for-profit, working farm.

“The more our licensees know about the production side of the beef business, the better it will make them at selling and marketing that product,” says Margaret Coleman, CAB assistant director of education.

Retailers, food distributors, chefs and restaurateurs travel to the ATI beef facility to learn what happens from conception to the packinghouse. Manager Casey Meek typically leads the tours, explaining the beef industry in easy-to-understand terms.

“We get all different levels of people out here, from those who raise cattle themselves to folks who have never been on a farm,” Meek says. He’s used to that, because students come into the beef program with a variety of backgrounds, too.

The farm houses a 110-head, mostly commercial Angus herd that is divided into fall and spring calving groups.

“We try not to do anything that a normal farm wouldn’t do,” Meek says. “When we need to vaccinate cows, the students come out and we teach them how to vaccinate. We teach nutrition, genetics and many other management practices.”

They finish all the progeny themselves and then they’re harvested at a local processing facility.

“When you go there, it looks like you could be pulling into any Midwestern farm,” Coleman says. Meek adds to that authentic experience, bringing knowledge from employment at working farms and ranches in Nebraska and Ohio prior to his current role.

“When people leave, they always comment on getting that personal connection with a cowboy,” she says. “They get a better understanding of what production is really like and the care that farmers and ranchers have for their livestock. That’s really important.”

Q & A sessions can be as diverse as the groups, but Meek can almost guarantee hormone implants will be part of the discussion and explained in context. Many also ask about any recent ag-related news items they’ve heard about.

“The neat part of getting people in here who have never been on a farm, is that we can show them all the good things that happen on a farm,” he says. “We can show how much people care for their animals and it’s their livelihood.”

ATI is installing a Temple Grandin-designed handling facility, adding to its focus on low-stress animal husbandry.

“They have extremely well-kept facilities, which makes it a great place to showcase,” says Coleman.

Meek is quick to note that it’s a two-way partnership, with CAB staffers giving class presentations at ATI and helping with labs.

“Education is their No.1 goal, whether it’s educating students or outside industry folks,” Coleman says.

It seems ATI and CAB share more than just a zip code.

CAB premiums at seven-year high

Biannual packer survey shows cumulative contribution at $352 million

by Steve Suther

Demand for the Certified Angus Beef^® (CAB^®) brand surged higher in 2011, which helps explain a 40% jump in packer-reported CAB grid premiums. Licensed packers paid owners of CAB-accepted finished cattle $32.3 million last year, compared to almost $23 million in 2010, according to February reports. That does not include related premiums paid for Choice and Prime grades.

The news ended a general downtrend in annual grid premiums for the brand from the historical high of nearly $37 million in 2002 (see Chart 1). CAB volume had gained more than 40% over the eight years and premiums often decline in the face of more supply. However, during those years, the value added by CAB was becoming relatively more important in comparison to the weakening premium for USDA Choice over Select beef.

The latest fed-cattle premium spike is supported by what happened on the boxed beef side.

“A simple average across five middle-meat items—the rib, strip, tender, butt and short loin—shows that the CAB product premium in 2011 jumped roughly 20% over 2010,” says industry analyst Julian Leopold, of Leopold Foods.

That was after a “pretty flat” period for CAB premiums following the 2008 crash in the overall economy, he says. “It looks like demand is picking back up though, and likely at restaurants as well as retail.

“The other side of the equation would be the volume, as the 4% increase in 2011 CAB sales over 2010 could have further increased the total dollar premiums in the system.”

Grid premiums for CAB-accepted cattle have reached a cumulative total of $352 million, with packers paying producers about $28 million per year for hitting that target over the past 10 years.

“We’re seeing the premium nature of our brand on both the product and cattle side of the industry, with rewards to all of the stakeholders and partners who are committed to quality,” says Certified Angus Beef^® President John Stika. “The investment and focus in taking the high road above commodity beef pays off with more and more satisfied customers.”

The numbers come from a “Here’s the Premium” project that has surveyed packers on annual CAB grid premiums paid since 1998. They report total dollars but not volume of grid cattle bought, and individual data remains confidential.

The trust and integrity built into the CAB program may limit the precision of reporting on price signals, but that’s more of a problem for USDA’s Mandatory Price Reporting (MPR) system. Its “Five-Area Weekly Weighted Average Direct Slaughter Cattle – Premiums and Discounts Report” shows a weekly CAB grid premium, but that reflects only the narrowly defined 15% of value-based marketing that is “negotiated,” and does not include formula grids that pay higher CAB premiums.

MPR Supervisor Brittany Koop admits several “challenges” may lead to understated figures. Packers report intentions rather than actual records, so auditing is difficult. Even if they offer several grids, packers can list only one expected CAB premium, and Koop notes it is not in a packer’s best interest to report a higher price. Weighted averages only consider total plant volume, not CAB volume, and volume cannot be assigned to grid data. Finally, USDA confidentiality rules keep many grid transactions sealed.

Based on published grids connected with several packers, the upper range of available CAB premium last year was more than $5 per hundredweight (/cwt.) in the Plains area. Yet, despite the 40% hike in total reported grid premiums to CAB, USDA reported only a 6-cent move in CAB grid premium, to $2.84/cwt.

The historical data reported to CAB by packers indicates grid premiums have returned to the market in a big way. While it took 20 years to reach an estimated cumulative total of $3 million paid, the 14 years since then have been rewarding for Angus producers who focus on quality. Premiums have been up and down, but among the top four CAB packers, last year’s total was either the second-, third- or fourth-highest annual CAB grid outlay ever.

Looking at Urner Barry Yellow Sheet boxed beef values over the past four years by CAB fiscal year (Oct.-Sept.), versus calendar year (Table 1) illustrated the fourth-quarter strength in beef prices in 2010 and 2011.

Still, the CAB/Choice spread has not fluctuated by as much as $1 in those years, notes Urner Barry reporter A.J. Munger.

He says higher CAB grid premiums paid last year are likely due to the sharp increase in wholesale demand for premium Choice beef, “with the continued expansion of branded programs, particularly the CAB brand.” A retail demand shift from Select to premium Choice was obvious by late summer.

“That increased the competition for higher-grading market-ready cattle,” Munger says, which would be enough to increase premiums. On top of that, however, the shift coincided with a fall-off in quality grades, thus limiting total available supplies, he adds.

What will 2012 bring? It was off to a strong start with even the USDA report showing a weekly weighted CAB grid premium of $8 in January. “Of course that could be seasonal and it is way too early to talk about a trend for the year,” says Kansas State University economist Ted Schroeder.

There is much volatility and uncertainty in the market, with severely negative packer margins. But with all beef priced at historic highs, a trigger level may turn consumers toward either higher quality beef for a little more premium or away from beef toward other proteins.

“We also know that not all cattle qualifying for CAB receive a grid premium,” Schroeder says. “Many are sold in ways that return a commodity price to the seller, but enable the packer to capture CAB premiums for the beef.”

The big jump in reported CAB grid premiums for 2011, when USDA’s MPR system showed little change, suggests a lot more CAB-qualifying cattle were sold on a value-based formula or grid last year. “That says if you want in on the higher CAB premiums, you should look at selling your cattle on a value-based grid that pays a competitive rate for those that qualify,” he adds.

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