Where surf and turf meet

Chad Mackay, chief operating officer of CAB partner El Gaucho restaurants, traveled to Cottonwood Station west of Philip, South Dakota, last Saturday.

Chad came from his Seattle, Wash., base in the Pacific Northwest to share insights with ranchers about the high-end foodservice trade in both the Seattle and the Portland, Ore., markets where his family’s restaurant group operates. Selling CAB (Prime, Natural—exactly, right? Nothing better), he says people choose a great steak as the meal to “celebrate life.”

He hasn’t spent much time on farms or ranches, but last year’s Washington Restaurant Association Full-Service Operator of the Year says he’s happy to interact with beef producers: “It’s as a way to give back to the folks that make our business possible.”

For their part, the cattlemen appreciated Chad’s insight, spending 25 minutes or more in a Q&A session that covered everything from hospitality strategies to how the best beef competes with seafood alternatives. We enjoy a little surf and turf sometimes, but our focus will remain on the beef side!

Building blocks of CAB knowledge

Katie ended her summer internship with us on Friday, but not before we eked one more assignment out of her. She attended one of our company seminars designed to teach different brand stakeholders about the entire beef system and how CAB fits into that. Read on to see what Katie took away from the experience. –Miranda

It never ceases to amaze me is how many people do not know about Certified Angus Beef^®, but when shown the logo they can surely identify it. I must admit I was in that group prior to working here. I knew what CAB was, although I didn’t know much about the company or the brand in and of itself.

Even though I’d already been intern for three months, when I attended the company’s Building Blocks for Success Seminar last week, there were key points and facts I picked up along the way:

Although CAB is a non-profit organization they are funded by an average of $0.02 per pound of product sold. This commission is paid by the packing plants. I was always curious; something had to keep up the immaculate facilities, marketing resources directed at the product and the brand logo on everything.
Another cool aspect I didn’t realize was our staff knows exactly how many cattle are certified every day in the packing plants in the United States and Canada. Every step along the way from “field to plate” is tracked and recorded.
CAB accesses more than 85% of the North American packing base, and around 70% of the cattle harvested in the U.S. have Angus influence. Those cattle are evaluated under CAB’s 10 specifications.

All in all this experience has been incredible.

I have experienced many different states, met plenty of new faces, been able to tell the stories of farmers in the mid-eastern states, explore my photography passion and most importantly have made connections and friends that will last me a lifetime.

This company will always continue teaching me things.

~Katie

But cattle don’t have wings…

A couple weekends ago, we let our summer intern, Katie Fisher, take off her Black Ink reporter hat and get a behind-the-scenes look (VERY hands on) at a unique event sponsorship for the brand.

And then we asked her to come back, put that hat back on and tell you all about it. So if you’re wondering what could get CAB excited about a chicken wing festival, read on.–Miranda

On Saturday, June 22nd, the first-ever Big Kahuna Wing Festival kicked off at The World’s Fair Park in downtown Knoxville, Tenn., just steps away from the historic Sunsphere.

The event had a full lineup of some of Knoxville’s best culinary talents, who cooked 54,000 wings for more than 5,000 visitors – and all in the name of charity. The festival benefitted the Empty Stocking Fund and the Ronald McDonald House.

Among the bevy of sponsors for the inaugural event was the Certified Angus Beef^® brand.

Does it seem odd that CAB sponsored a chicken wing festival? Yup.

But event organizer and BKW Seasonings founder Matt Beeler wanted a VIP tent, and realized that VIPs deserve a grand steak cooked by the experts – even among a sea of yard bird.

The brand partnered with local restaurant group Aubrey’s to give VIPs the royal treatment – and they didn’t disappoint.

More than 180 pounds of Certified Angus Beef^® brand strip loin and petite tenders were perfectly cooked by corporate Chef Michael Ollier, and paired with succulent Aubrey’s sides.

The look on people’s faces passing by the roped-off VIP area was priceless. They were astonished at the giant juicy pieces of beef sizzling on the grills. Many of them asked over the fence, “Where do we purchase the tickets to get in there?”

Soon after dropping $100 each for the special ticket, our tent was overflowing with 250 hungry guests.

I enjoyed going to each table and talking to the VIP attendees about the brand and where the beef comes from. I was proud to represent the farmers and the ranchers who create this amazing product for us to consume. There is nothing else quite like CAB and I wanted to ensure they could “Taste the Difference.”

It was a hot (and I mean HOT) weekend filled with helping Beeler set up the physical layout of the festival, taking Chef Ollier to a local TV station to talk about the brand, Aubrey’s restaurants, the event and manning the VIP tent o’ beef.

Although, we were constantly trying to keep up with the demand for beverages, ice, utensils and food, we made a great team: CAB, the Aubrey’s staff and chef.

The best part? Making beef a highlight at a chicken wing festival. That makes all the hard work worth it.

~Katie

Self interest, shared goal

Branded beef business model highlighted in Texas A&M class

by Anthony Pannone

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.

Stika kicked off the forum, describing how CAB functions in a segmented industry.

“We don’t own any cattle. We don’t own any steaks, or roasts or ground beef. What we own is a building in Wooster, Ohio, three minivans, and this logo,” he said pointing to the CAB crown jewel.

“Everything that this brand is based on is determined by the value we create in your minds, or the minds of consumers,” Stika said. “Whether they’re at foodservice or retail, it’s the trust that they have that this brand is going to deliver beyond expectations for taste and quality.”

CAB has added value to the breed since 1978, but also helped created “Angus confusion,” he allowed.

“McDonald’s, Domino’s, Arby’s and other Angus beef programs—out of the leading brand’s success, Angus has become the embodiment of quality,” he said.

Siebert described the brand’s influence as a constant flow. “Picture Certified Angus Beef’s finished-product creation working like a stream of water,” he said. “This is called the food marketing chain. Upstream are the seedstock producers of high-quality Angus genetics.”

James Henderson is upstream, literally in the Panhandle’s High Plains near Memphis, Texas, where his family’s Bradley 3 Ranch has operated for 50 years.

The registered Angus business has created far-reaching impacts on all cattle ranching, he said noting CAB’s first live-animal requirement: “How many black breeds of cattle did we have in 1978? Angus and Brangus were the two black breeds. Now, how many do we have today? All of ’em,” he said. “Because that’s where the economics have said, that’s where the money is.”

To achieve success in the future, Henderson said it’s all about creating relevance.

“Our challenge is, how are we relevant in 2032 when we’re trying to sell something to your kids? The challenge is to make sure we produce cattle that add value to the supply chain.”

Henderson’s relevance is evident to CAB-licensed distributor Boutte, who has managed the flow of beef from rancher to plate for 25 years. After Henderson spoke, Boutte shook his hand.

“We thank you, and all the work you guys do because we buy and expect it to be there,” Boutte said. “You guys have performed and given us good quality beef.”

He highlighted the importance of the beef aging process, saying it allows his product to reach its optimum flavor profile, even though that inventoried meat is a huge investment.

“In my years of selling CAB, I would sample product—and the best thing I could do at that point was just be quiet,” Boutte says. “I’ve sold more by being quiet than I ever thought. The product sells itself.”

Chef Rosser represented the end-user, where value is ultimately added.

“Things I need from a good quality cow or steak are, I need more of it and I need it to be smaller,” he said. “That goes contrary to what James [Henderson] spoke of because he needs his to be bigger so he can make more money, and I need it to be smaller. I think there’s probably middle ground there.”

He said he lives a different life than most chefs, paying attention to weather and different markets because “they affect the overall economics of this business.”

“Producers take 22 months to get it to me, and I can screw it up in 12 minutes, so I ask the cow-calf producer to focus on their 22 months, and I’m gonna focus on my 12 minutes,” he said, noting he sold 2.5 million 16-oz. ribeyes last year.

“The cool thing about being Ric Rosser is that I don’t have to worry too much about what I do to my steak, because it’s a good quality steak,” he said. “We shifted to CAB in 1981. Before then the world didn’t exist; we served horrible steaks, and our complaint levels were high. When we moved to CAB our complaints literally dropped off the face of the earth.”

He stressed that he’s not a paid advertiser, just a brand believer. And that’s why Siebert became so interested in the non-profit that consistently creates profit for partners that he decided to invite them to class.

“CAB is a completely unique organization in that all participants along this stream—by following their own best interests—ensure that downstream users get exactly what they want: a great eating experience,” the professor said. “I admire the fact that CAB has created over $300 million in premiums received by beef producers. Without CAB, beef producers would have less income.”

Schooled in Angus confusion

We love it when former interns keep in touch. It’s even better when we can tap into this growing network of informed young professionals to help us cover an event or story in their area. That recently happened when Anthony Pannone, now in grad school at Texas A&M University, sat in on a class session that we think you might find interesting. Read on to get his take on it. –Miranda

Knock knock . . . Who’s there?

Four businessmen and one professor . . . Four-businessmen-and-one-professor who?

President of Certified Angus Beef LLC (CAB), John Stika. Texas seedstock producer, James Henderson. CAB-licensed meat distributor, Joe Boutte. Concept executive-chef for Saltgrass Steakhouse and Claim Jumper, Ric Rosser. And Texas A&M University professor, John Siebert, who invited the businessmen to speak with his class.

On March 19^th in College Station, Texas (a.k.a. Aggieland), I attended a forum set up by agricultural economics professor Dr. Siebert . Pumped to be there, I wondered why he invited the four links in CAB’s supply chain.

“CAB empowers participants to sustainably make more net income,” he said. “This is the most difficult thing to do in all of agriculture. I admire the fact that CAB has created over $300 million in premiums received by beef producers. Without CAB, beef producers would have less income. “

Dr. Siebert is an energetic guy fueled by a passion for teaching and learning. His classroom delivery is similar to an inspirational Sunday sermon. In addition to watching him excite the students and encourage them to ask questions, it was cool to listen to the speakers—or as Dr. Siebert called them, “professors for the day.”

Going into the forum I knew the basics of supply chain. Though still not an expert, I came away from the forum with something I had known but to which I never devoted any critical thought. Stika mentioned one thing that currently does and will continue to affect CAB’s supply chain: Angus confusion. You know you suffer from Angus confusion (scientists are looking for a cure) when anything labeled an Angus product leads you to assume it’s a CAB product.

For those familiar with the brand, for those fortunate to have eaten a CAB steak, burger or other beef product, Angus confusion is less severe or of zero concern. We know what to look for, and we know what we’re getting. But for non-CAB consumers, for consumers yet to wake up and cross into CAB eating-experience paradise, there is the risk of catching Angus confusion. The risk increases as more and more less-than-premium-quality Angus programs hit the market.

Angus confusion: either it leads to an unfulfilling, mediocre eating experience or a rocking party where taste buds celebrate high-quality standards proven to drive business bottom lines into the black. On this day in Aggieland, more than 150 young people were provided with a cure that is hoped to minimize the delirium caused by just-did-make-the-grade quality being confused with consistently-premium quality.

Adios,

Anthony

Good cattle news abounds

I’m not naïve enough to believe that the beef industry is always all about teamwork. But I am optimistic enough to believe that we’re working toward that, and gaining ground.

I’ve shared enough examples of how teamwork between rancher and feeder can create better beef, but this last week at the Cattle Industry Convention and Tradeshow I was reminded how cooperation between all stakeholders can really move the needle.

Heading into the convention, I asked you all to share your good news. I jotted down pages full of notes and came away feeling pretty proud of our industry.

In no particular order, here’s a list of some of the items I found both interesting and encouraging:

Microwaveable roast — This roast cooked in the microwave during a presentation. We got to taste test the product, and I can say it was pretty darn good!

-We learned about new beef products coming down the pike (like microwaveable hamburger!) that will help build beef demand.

-John Lundeen, director of market research for NCBA, told us about consumer attitudes toward beef. One of my favorite observations: When consumers are asked if they think beef is safe, they say, “Yes!” He says, “We are winning here.”

-“The beef industry reduced its environmental impact by 9% from 2005 to 2011.” Way to go producers!

-Free Trade agreements give us better market access to market our high-quality beef. (That comment from Cattle-Fax reminded me of a recent story I did on South American beef demand, just one good example of that.)

-The difference between an ungraded beef carcass and a Prime one is $60/cwt. “That’s real money!,” Cattle-Fax told the crowd.

And the notes go on and on, and hopefully I can recap more of the week here later on.

But we not only picked up on good news from speakers and presentations, but also from talk in the hallways and Twitter chatter. Several people tweeted us their thoughts via #GoodCattleNews, covering everything from the weather at home (rain—halleluiah) to future beef demand.

When we got home, we threw all those participants in a virtual hat (random.org, that is) and found our steak package winner:

We can’t argue with that logic, Jennifer! We know health=more profitable, higher quality cattle.

Thanks for playing along. You may not be grilling in Tampa-like temps, but hopefully you’ll feel the same optimism we did last week as you enjoy your Certified Angus Beef (R) brand steaks!

May your bottom line be filled with black ink,

Miranda

Denver great place for cattle and conversations

If you follow our social media efforts, you know Mark, Gary, Paul and Kara spent most of last week in the Mile High City at the National Western Stock Show.

Warmed with a good heater and stocked with plenty of coffee and CAB summer sausage, the Angus tent has evolved into a listening post.

So what did Mark and the rest of the Black Ink team hear? Here are a few common themes:

EPD recalibration. Just one week prior, the American Angus Association had recalibrated the genomically enhanced EPDs and, at the same time, updated the economic values that go into the dollar indexes. Many seedstock producers stopped by the tent to ask questions and make sure they understood the new numbers. (Have questions about these changes? Visit angus.org.)
The weather. Of course, anytime people in agriculture gather, the weather will come up. How cold is it? How dry is it? Though most producers were optimistic, they also reported extremely dry conditions across most of cattle country.
The future of their cow herds. Would expansion be possible soon? How soon? Do they still need to cull in an attempt to combat dry conditions and limited feed supplies?

It was a great few days visiting with cattlemen and taking in some shows and some very good Angus sales. If you make it to the Yards next year, be sure to look for the Angus flags and stop in for some conversation and hot coffee.

Wrapping up Dr. Corah live – Part II

When we kicked off our first-ever live Facebook chat, we didn’t know what to expect. But the hour flew by and we were impressed with the variety and depth of the questions our friends asked. Yesterday, we shared a partial transcript of Friday’s chat.

Today, we wrap up. Here’s Part II:

Question: We’re trying to raise bulls that help cow-calf customers target the CAB brand. Are there any minimum marbling EPD thresholds that we use as seedstock producers?

Answer: There are not any minimum requirements but two things are especially important in the amount of marbling that will ultimately be present in the progeny resulting from using your bulls. The first is the actual marbling EPD and because marbling is so highly heritable the higher the marbling EPD the higher the probability the calf will qualify for the Certified Angus Beef program. The second that is really important is that the cow side also carries genetics for marbling potential and by stacking the genetics on both the cow and bull sides, we have seen tremendous CAB acceptance rates, often adding dollars to the pocket of the producer.

Question: In regards to hitting the CAB target of marbling…we have often heard the phrase, “Never let them have a bad day.” What impact does slowing weaned calves down (to around 1 pound average daily gain) in an over-wintering program awaiting spring grass have on their future potential to hit the CAB marbling target? And, is 1 pound of gain for a few months “having a bad day”?

Answer: As we learn more about how the production system impacts marbling, we are learning that we’ve got some flexibility in the stocker (grower) phase in how we develop cattle and whether they’ll qualify for the CAB brand. That research data is showing the cattle that gain about 1 pound a day during the growing period can still reach high CAB acceptance rates if they are properly finished during the feedlot phase. By properly finished we are referring to hitting a compositional endpoint of .5 to .6 inches of fat cover, and if that is achieved, generally the probability of hitting the high-quality target is still successful.

Question: What would you suggest to someone who is considering getting into the cattle business and wants to provide quality and not just quantity?

Answer: The 2 most important profit drivers on cattle sold on the grid are quality grade and weight. What needs to be the goal of cattle producers is they produce pounds but those pounds are of a high-quality product that creates a positive eating experience for the consumer. That is absolutely critical at the price we are selling beef for today and with the input costs that we have to produce product, we have to sell at higher prices.

Weren’t those some great questions? Next time we do a live chat, we hope you’ll join us!

Seek answers for better beef

by Miranda Reiman

If you’ve ever tossed leftovers or overripe fruit without considering tomorrow’s lunch or creative baking, you’re part of the problem.

“We throw away 242 pounds of food per person per year,” said Brad Morgan, senior food safety and production efficiency specialist with Pfizer Animal Health.

That’s about 1,400 calories per person per day, and roughly 1.3 billion tons of food per year.

Morgan shared these facts at this year’s Feeding Quality Forum in Grand Island, Neb., and Amarillo, Texas.

“We spend about 7% of our disposable income to feed our families,” he said. “In Europe they spend anywhere from 13% to 28% of their income. What am I getting at? One, we take food for granted. Two, it’s cheap. And three, we always expect it to be there.”

But many have heard the stats pointing to the need to feed 9 to 10 billion people by 2050. That’ll take more technology for certain, he said, but also, “We’ve got to become less wasteful.”

That goes for every step of the chain, from harvest to distribution to the consumer level.

“In World War I, they talked about food as a weapon. Don’t waste it. Buy it wisely,” he said, “World War II they said it again. Rationing, grow your victory gardens, do your part.”

As prices escalate, the conversation turns in that direction again.

“Whenever we have times like this, I think it forces us to do things we never would have done before,” Morgan said.

Other countries provide examples. In South Korea, they charge citizens for food waste disposal. During the first year of implementation they cut food waste by 20%, or $4.3 billion worth.

Some European grocery stories have changed from “buy one get one free” marketing to “buy one now, get one free—later.” During a shopper’s return visit to the store, they can pick up the free item so it doesn’t go bad in the meantime.

Reducing waste is one part of the global food supply equation. “It’s just the right thing to do,” Morgan said. The other variable is increasing production, which requires new innovations. But Morgan cautioned that it can’t be at the expense of consumer satisfaction.

In this country, shoppers still have the luxury of being discerning.

“People buy beef for a reason, and it’s not because it’s cheap,” he said. “They buy it because they like the flavor of it.”

Technology that makes animals “stronger, faster, more efficient,” needs be used judiciously.

“There has got to be a balancing act, because it doesn’t matter how cheap or efficient it is to get it there if people don’t want to buy it,” Morgan said.

The seventh annual meetings were co-sponsored by Pfizer Animal Health, Purina Land O’ Lakes, Certified Angus Beef LLC (CAB) and Feedlot Magazine. For more information or event proceedings, visit www.cabcattle.com.

Fewer cattle, more pressure

by Miranda Reiman

Getting cattle bought right. That’s normally a feeder’s first challenge, but today it’s just plain getting cattle.

“The total size of the cattle industry has been shrinking, and shrinking rather abruptly for the last couple of years,” said Mike Sands, Informa Economics vice president.

The nation’s cowherd was at 90.8 million head to start 2012 (see chart). But as summer turned to fall, drought had hit three-fourths of that herd.

Speaking at the Feeding Quality Forum in Grand Island, Neb., and Amarillo, Texas, in late summer, Sands said he expects that to shrink another million head or more by January 2013.

“We’ve seen some extremely tight packer operator margins over the last year. That’s unsustainable. We’re looking at sizable cattle feeding losses at the present time. Those are unsustainable,” he said. “It probably boils down to some change of the structural capacity in the industry.”

Fewer cattle will eventually mean fewer yards to feed them and packers to process them.

“There’s not enough to go around,” he said. “There are going to be some empty pens. I want that guy to have an empty pen, not me.”

For the first time in five or six years, 2012 started out with some cattlemen in the central Plains retaining heifers above the previous year’s levels.

“And if the weather had cooperated, we’d probably be in the midst of cowherd [rebuilding],” he said.

But it didn’t. Forage availability trailed off as temperatures and feed prices went way up.

“Cow-calf margins obviously have shrunk,” he said. “So the incentives to hold back heifers and turn numbers around, right now, are pretty much nonexistent. Except that everybody recognizes there’s a carrot out there or a pot of gold somewhere at the end of the rainbow and, ‘I’m going to be there when this thing turns.’”

Throw in a still-sluggish economy and slower exports and the script for lower domestic beef demand has been put in motion.

“Consumers are still pretty reluctant to part with their dollars,” Sands said. “It’s going to be an ongoing challenge for us to get that beef price level up to the point where the higher cattle market works for us and for the packer.”

The U.S. has been a net exporter of beef the last two years, reaching 700 million pounds last year.

“That translates into something better than two pounds per capita that disappeared—that we didn’t have to find a home for domestically,” he said. “I think the odds are much higher over the next couple of years that we become a net importer again.”

The value of the dollar dropped about 35% in the last decade, giving U.S. beef a discount in international markets. An increase in that value, coupled with record high prices anyway, spells challenge, Sands said.

This scenario will pressure cattlemen to differentiate and form alliances.

“Not only marketing agreements with packers as a possibility, but also to access feeder cattle in terms of retained ownership programs,” he said. “We’re going to have to work out relationships to get access to those feeder cattle and calves.”

Everyone in the business is going to have to make sure the expensive product they’re touting is worth it.

“Despite declining cattle and beef supplies and rising prices, quality never goes out of style. As price levels go up, there is going to be a quality expectation,” Sands said. “You pay more for a product, you expect a different set of attributes than when it were cheaper. And as a result I think there is a quality-value relationship there that is certainly going to come to the forefront over time.”

The forum was co-sponsored by Pfizer Animal Health, Purina Land O’ Lakes, Certified Angus Beef LLC (CAB) and Feedlot Magazine. For more information or event proceedings, visit www.cabcattle.com.

Where surf and turf meet

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