Meat is about trust, says author

by Katie Alexander

Imagine living when there was no supermarket or grocery store where you could buy food, having to grow just about everything your family needs. That could be any rural area in the country a couple hundred years ago.

Livestock were keys to that economy, says author Maureen Ogle, who spoke at the Certified Angus Beef^® (CAB^®) brand’s annual conference in Tucson, Ariz., last month. Her book, “In Meat We Trust: An Unexpected History of Carnivore America,” derived from the realization that she ought to know more about this vital food chain.

“Here I am living in Ames, Iowa, which is basically ground zero for all things agriculture,” Ogle said. “My house is built on what used to be, 25 years ago, a cornfield – and I realized I didn’t know anything at all.”

Immersing herself in research for the book, she soon discovered “how wrong” the consensus was.

“My brain started paying attention to the so-called food debate,” Ogle said. “I think it’s more of a shouting match than a debate. As I got deeper into the research, I let my brain start paying more attention to what was going on in the real world rather than what happened 200 years ago.”

Seven years of immersion in the meat industry led her to ask, “If antibiotics are so controversial and confinement is so evil, why and how did it happen? Why do people do these things?” The first part of her book sought those answers.

When the first settlers came to America, cattle became a major form of currency; owning livestock determined your wealth status.

“To be in the new world,” Ogle said, “to be what eventually was called an American, was to be someone who could eat meat whenever they wanted.”

As the Civil War broke out, more people were moving into cities and less meat was being produced locally. That caused problems, but opportunities for people who could supply those protein needs.

People like Phil Armour, who founded Armour & Company in Chicago, and Gus Swift, who revolutionized the meatpacking industry by using refrigerated railroad cars, found solutions.

“As entrepreneurs, they figured out a way to unravel this logistical puzzle and build really efficient systems for getting livestock from the person who starts with the calf or the newborn pig, and moving that animal through a system where the animal gets fed to maturity, slaughtered and then ends up, eventually and usually at least a thousand miles away, on someone’s plate,” Ogle said.

To support urban growth, Armour and Swift built systems that continue to multiply around the world.

Today, the term “factory farming” is a very negative term, but Ogle said it was a statement of patriotism in the early 1900s.

“Farmers understood that if you’re going to feed this big population, you need to have some kind of business-like, efficient system,” she said. “Just in terms of supply and demand, farmers could not keep up with the demand in this country. They had to adapt new technologies and new ways of thinking about production to try to keep up with this extraordinary demand.”

The second half of the book picks up the story during World War II when a lot of things began to change and the structure of relatively modern livestock production and meat processing began to take shape.

“Farmers were soon trying to come up with more efficient ways to feed their livestock,” Ogle noted. “The common view now is that big corporations took over, but the story that I found is that thousands and thousands of farmers were developing jury-rigged equipment so that their cattle and hogs could feed themselves, so that the farmer could get on to doing other jobs.”

That ingenuity went unheralded, but she said producers may need to call upon their traditional ability to innovate to keep consumers happy today.

“Americans spend roughly 11% of our disposable income on food,” Ogle said, noting how relatively low that is in a global sense. “Yet agriculture has somehow lost the culture war. The media latched onto the [food writer Michael] Pollan version, and ran with it.”

Maybe it’s not too late to rebuild the image, though.

“Just keep doing your job as well as you can,” Ogle told Angus producers, “and try to tell your story, if you can, as honestly as you can.”

The matching game

Technology, economics, consumers dictate cattle feeding

by Miranda Reiman

Cattle have changed. If your management hasn’t, animal scientist Robbi Pritchard suggests you take a look to be sure it’s still relevant.

The South Dakota State University emeritus professor addressed cattle feeders and allied industry at the Feeding Quality Forum in August.

“Genetics are better and our growth enhancement tools are better and we know a lot more about them,” Pritchard said, noting the term “precision ag” is typically reserved for row-crop discussions. It doesn’t have to be. “We could go that way in the cattle business and we could make big strides.”

That means matching cattle type to technology and ration.

“If they’re coming out of 1,600-pound (lb.) cows, they probably don’t need any implants,” the ruminant nutritionist said. “The DNA was there. The implants just fill in for a lack of DNA.”

Using those growth promotants in an animal with high growth potential will give you a “nitro-burning car that flames out. It’s not a good thing.”

But another class of cattle would benefit from the technology, as a single implant can add 75 lb. of carcass weight.

“All we need to do is match up stage of growth, potency of the implant and caloric intake,” he said. “We’re getting much better at using our implants like scalpels instead of axes.”

The critical window is from weaning to 65% of their harvest weight.

“That’s where you change the percent Choice, that’s where you change what they weigh when they hit a Yield Grade (YG) 4,” Pritchard said. “These cattle have higher growth potential than they used to have, so we have to feed to that higher growth potential.”

He suggested only grazing commodity cattle on wheat and low-quality forage.

“Five to eight months of age: that’s the window where I can manipulate where I’ll be on quality grade, relative to yield grade in the end,” Pritchard said. “If I rough them too much during backgrounding—either with corn stalks or dormant prairie, I’m going to give up marbling.”

In a normal year, early weaning makes sense only for larger-framed cattle.

“Early weaning is going to make them fatter,” he said. “It will make them grade really well, but you’re going to hang up 100 lb. less carcass weight; it won’t pay.”

Weighing cost versus later return, he said, “Creep feeding fits best just within the nutritional gaps.”

Ranch level changes have created more uniformity in supplies to the feedyard. For example, calving groups are tighter.

“We no longer need time for things to average out as we did when management wasn’t nearly as good. Time solved a lot of problems,” he said.

Genetics play a big role in knowing when cattle are done, and those have changed.

When Pritchard’s great-grandfather trailed cattle to the railroad, they were usually driving 4-year-olds. “It took a really good steer to go to town when it was three,” he said.

But what rules marketing decisions today? Some sell when they’re “fat enough” and some farmer-feeders when the corn is gone. As calf replacement costs have escalated, some consider them finished one week before the packer won’t take them any longer or when the implant is wearing out.

“None of these are really sound, long-term plans,” Pritchard said.

But don’t listen to yesterday’s wisdom.

“We all learned in school: when cattle get fat, they get less efficient,” he said. “I believed in it a lot once upon a time.”

At the beginning of his career, feed-to-gain ratios on heavy cattle were 8.5 lb. to a pound of gain. Today’s data? “Feed conversion barely got over 6 lb. on pens of cattle that got a pile of [Yield Grade 4s],” he said (see figure attached).

“What is my definition of done supposed to be? When I make the most money or when I make the right product?” he said, alluding to outside factors.

Much larger carcasses cause challenges at the packer level, where their infrastructure isn’t set up for the sheer size of some of today’s animals.

“They’re going to slow down our rate of change,” Pritchard said. “They’re a governor, but so far they’re not going to stop it.”

From 1980 to 2015, the hot carcass weights have increased an average of 5.18 lb./year, and Pritchard expects that to continue.

What does that mean for those who ultimately buy beef products?

“Consumers have our attention,” said Pritchard, noting that the cattle community has responded to quality assurance, food safety and animal welfare issues. “Are we doing anything about size?”

Yet economic signals say, keep making them bigger.

“We keep worrying more about this,” he said. Feeders want to do what’s best for everyone, “but right now we don’t have a price structure system that’ll encourage us to do that.”

The forums, held in Grand Island, Neb., and Amarillo, Texas, were co-sponsored by Micronutrients, Feedlot magazine, Zoetis, Roto-mix and Certified Angus Beef LLC (CAB). To view presentations and summary information, visit www.feedingqualityforum.com.

Face the pace of change

From beef markets to production systems

By Katie Alexander

We are used to slow change in the cattle business.

After decades at that pace, however, the North American cattle and beef industries are undergoing a rapid transition.

“Farming and food production in total are no longer local industries,” said Pete Anderson, Midwest PMS research director. “They no longer serve local markets. Now, they are part of the global marketplace, paired with scaled opportunities, scaled risk and increased volatility. The upside is bigger, the downside is bigger, and the risk is greater than it’s ever been.”

Anderson presented a state-of-the-industry overview at last month’s Feeding Quality Forum in Grand Island, Neb., and Amarillo, Texas.

“As individual cattle producers, most of us are subject to external influences to a greater degree than ever before,” he said. “Our collective responses will shape the industry and determine its future. In other words, there’s stuff you can’t control that’s influencing how this works.”

There are fewer cattle, different and more valuable compared to previous decades. They’re bigger, better and fatter.

“Outside financial influences are having a bigger effect on our business than ever before,” Anderson said. “That’s one of those things that we can’t really control.”

While head counts are down, there is more beef and “two and a half times as much milk” being produced with forty million fewer cattle.

Genetics have continued to play a role.

“EPDS [expected progeny differences] were the first selection tool that actually worked, the first genetic and evaluation tool that actually let us make progress,” Anderson said. “We selected for growth, we got more birth weight because those are complementary traits. Because we had EPDs, we could sort through the population and predictably find those that could give us more growth without giving us more birth weight.”

Culling is a natural part of selection, but environmental conditions often drive it.

“We had a big drought a few years ago,” he said. “We’ve reduced the cattle herd by about 2 million head, sort of selectively. In the drought-stricken areas, the better ones moved somewhere, and the worst cattle got killed. We improved the average of the whole herd by using some criteria to determine which ones were worth keeping.”

Low cattle numbers imply feedyard operators must rely on “innovation and excellence to keep the yards full over the next 10 years.”

In the bigger picture, the beef industry needs freedom to operate, technology and knowledge.

“There are two groups that can take it, that can lessen our freedom to operate,” Anderson said. “One is government, and the other is consumers.”

The government has put more regulations into effect in the last eight years than in any 50-year period.

“Non-therapeutic antibiotic use will end this year,” he said. “A reasonable question we have to ask ourselves and prepare for is what will be the next thing.”

Consumers pay premiums for what they want. They get behind social media platforms and rally for causes that they believe in.

“Consumers will have a greater influence on what we do and how to do it. The customer is always right. Also remember, the customer is not always informed,” Anderson noted. “They’re not always scientifically literate. They’re not always interested in the truth. They’re not always concerned about our well-being.”

Technology can be both risk and benefit for producers and consumers.

“If we used it, consumers might not accept it. They might tell us they’re not going to consume a product, or they’re going to pay less for it if we make it a certain way,” he said. “That’s a risk. The other risk is if you don’t use it, you might not be cost competitive.”

With the ever-growing population, beef producers must look at the increase in meat consumption in not only the United States but other countries as well.

“We must get in, stay in and dominate the world’s high-quality beef market. Exports are a key,” Anderson said. “No other country can do that as well as we can. It’s the best use of our resources. It’s most profitable to export.”

The forums held in Grand Island, Neb., and Amarillo, Texas, drew more than 200. They were co-sponsored by Roto-mix, Feedlot magazine, Micronutrients, Zoetis and Certified Angus Beef LLC (CAB). To view presentations and summary information, visit www.feedingqualityforum.com.

Ag Outlook: Not so good, not all bad

Basse predicts price plateaus for most commodities

by Miranda Reiman

“Who is going to flinch first?”

Dan Basse, president of AgResource Co., said that’s the main question he and his team ponder when looking at this “plateau” phase in the ag markets.

“Is it your neighbor that’s going to cut back? Is it you?” the analyst asked, as he addressed cattle feeders and allied industry representatives at the Feeding Quality Forum last month.

The world has added 179 million crop acres during the last decade, and livestock production is currently in a “dynamic expansionary phase,” Basse said. Ethanol demand has matured and a strong U.S. dollar hurts global competition.

“If you want to get bullish in American agriculture, the thing that you want to see is a drop in the U.S. dollar,” he said. “The problem is, the United States is the reserve currency, almost by default, these days.”

Yet even with more production from predicted record yields and stocks-to-use ratios, “the story for grains is not all that bad,” he said.

South American drought hurt that region’s corn yields before rainfall at 250% to 400% of normal hampered soybean production. That will bode well for U.S. exports.

“I worry that we don’t have enough capacity,” Basse said, noting the U.S. can move about 600 million bushels combined of corn, soybeans and wheat each month through its current infrastructure. “There are going to be months that we don’t have enough capacity to export everything the world wants.”

That creates a strong signal to cattle feeders, he said. “You’ve got to be prepared for basis appreciation because there’s going to be a big sucking sound down at the Gulf. That sucking sound is the export demand sopping up bushels, and you can only hope that farmers will be willing to sell them.”

Basse suggested corn will average around $3.40/bushel, and if it dips below $3.25, feeders “want to be a long-term buyer.” AgResource predicts average soybean prices around $9.43/bushel, with lows around $9.25.

“We’ve lived through $3 corn and $1.10 or $1.20 cattle before. That’s not something that’s new,” he said. “What’s new is that our cost structure is out of whack.”

Input prices are still relatively high and farm incomes have decreased the last four years, down to the lowest levels since 2001.

“Low prices don’t mean the same for everybody,” Basse said. Places like Argentina and Russia have weak currency, which bolsters their position in the marketplace.

“In the ag world, there are two different things that cause us to have anxiety,” Basse said. “No. 1 is weather, which is always changeable and difficult. No. 2 is policy.”

He explained, using Argentina as a case study. When Mauricio Macri was elected in December, his goal was to eliminate export taxes on most agricultural products.

Argentinian farmers were paying taxes in the 27% to 35% range: “The next day, you don’t have to pay a tax at all – how are you going to feel?”

Farmers there are making $400/acre more this year compared to last.

That’s a big contrast to the U.S.

“This is the first year you went to the fields and planted corn and soybeans looking at sizable losses,” Basse said, noting his team estimates a $70/acre deficit. “Policy has to get involved here for the grain farmer to stop farming.”

There is tempered optimism in the beef business, however.

Cow-calf margins are down, but Basse still predicts a profit of $100 per head out into 2017.

“When I look at annual feeding margins, it’s getting better, but, boy, it’s been a tough road,” he said. “The good news is that per-capita meat consumption in the United States is rising again. We’ve seen price starting to stimulate more consumption of beef.”

Basse said the futures in August were undervalued by about $10.

“We are not advocating strong hedging, unless you have the margin in the cattle market as we sit,” he said. He predicted a first quarter cash-cattle price in the “mid-120s,” noting, “It’s not a big rally, but it’s something.”

Looking ahead to global factors and maintaining a competitive edge, Basse said producers need to keep improving their cattle, because the rest of the world is on it.

“If I go give this speech to Rockhampton in Australia, they’re feeding more grain than they’ve ever seen before. Argentinians are putting in feedlots and they’re going to be plowing up their Pampas where their cattle have been grazing,” he said. “We’ll see the shift, more grain being fed and more focus on marbling and quality than before.”

The title “grain-fed” alone will not hold the same distinction in another decade, he said.

You can think that, but you’d be wrong

Brace yourself. Prepare. That was the message I took from last year’s Feeding Quality Forum (FQF).

Before that came other themes: Manage your risk, there’s some glimmering good news amidst the bad; and high prices don’t mean high profits.

I’ve been to all but one of the forums, which we’ve held with allied industry partners since 2006, and the overwhelming summary is LOTS of good information.

But I might lean on Zoetis veterinarian Robin Falkner’s statement to wrap-up the 2016 meetings: “Just because we’ve been doing something for 100 years, doesn’t mean it’s right.”

2016_08_23_mr_FQF 2016-59 — Cattle feeders and allied industry gathered in Grand Island, Neb., and Amarillo, Texas for the Feeding Quality Forum meetings this week.

He was talking about improving stockmanship as a preventative measure, rather than relying solely on veterinarian medicine, but I thought it applied to all topics covered. Especially if we adjust that statement to its positive inverse: “We’re learning new things, and ways of doing things, all the time.”

Here are some myths of yesteryear that our speakers told us are simply not true in today’s year.

Record yields mean limit down pricing. Not so fast, says Dan Basse, president of Ag Resource. “We not only have big crops, we also have big demand,” the market analyst told us. He predicts record yields of 547 million metric tons of corn, soybeans and wheat. It’s the third year of record grain storage, but still: “I’m really not that bearish on grain price.”

That’s mainly due to weather challenges abroad. Boiled down: If you see a break in the market, lock in your feed price, he says.

Yield grade was perfected a long time ago. While the measurement was first implemented in the 1960s, it is not exactly perfect as it stands. Ty Lawrence, meat scientist from West Texas A&M University noted, “Carcass weights today are comparable to the live weights of the cattle that were used to develop the yield grade equation.”

Among the other reasons he questions its accuracy: small sample size on original study it was based on (162 head), changes in cutting and marketing methods and improved technology to help with estimates.

The longer you feed cattle, the more inefficient they get. Maybe once upon a time, but, “Energetic inefficiency is not what it used to be,” Robbi Pritchard, South Dakota State University animal scientist, told the group. Genetics and technology have changed, so feeding cattle longer to improve carcass quality and get more saleable weight per head makes economic sense, regardless of what corn price is doing. Of course, that is at odds with consumer preference, he said.

Also: the idea that calf-feds don’t grade? False, he said. Chalk another one up to genetics.

2016_08_23_mr_FQF 2016-87 — Think young cattle can’t grade? Think again, says Dr. Robbi Pritchard.

The day ended with Pete Anderson, Midwest PMS, who told the group that the Choice-Select spread is no longer the distinction of quality, “It’s between Choice and the branded programs.”

Basically all the rules are getting rewritten. “After decades of slow change, the North American cattle and beef industries are undergoing rapid transition,” he said.

Consider that a warning or perhaps more of a motivating statement. You’ve got to learn, keep up, adapt.

May your bottom line be filled with black ink,

Miranda

PS — Thank to our partners – Zoetis, Roto-mix, Feedlot magazine, and Micronutrients – who helped us put together such an informative program.

Plan beef herd genetics on consumer desires

by Hannah Johlman

Cattlemen have focused on quality from the beginning. Their success at delivering cattle that perform for the next owner kept them in business through market ups and downs. The approach seems to work, but can it keep working in an era of relatively higher beef prices?

Mark McCully, vice president of production for the Certified Angus Beef^® brand (CAB^®), challenged producers at the inaugural Canadian Beef Industry Conference to consider looking at their business in reverse.

“We know genetics are important,” he said. “We know health management is important at the ranch and at the feedyard – but they’re also critically important to consumer satisfaction, which ultimately drives demand for that product.”

And that, he said, brings profitability to the whole system.

“Let’s start with the consumer and work our way backwards,” McCully said in the August 11 presentation in Calgary, Alta. “That’s how we will most effectively hit the consumer target.”

Showing a perfectly grilled and plated steak, he encouraged ranchers and feedyard operators to evaluate how their management decisions affect the end product. He reminded everyone that marbling is the basis of quality grading systems and highly correlated to consumer satisfaction.

“Adding that takes nothing away from cow herd performance but adds much to the value of the end product,” he said.

Improved marbling starts with genetics, as carcass traits are highly heritable. McCully shared data from the USDA Meat Animal Research Center that shows Angus cattle surpass all other breeds in ability to marble, even though there is much variation within all breeds.

That’s why producers use expected progeny differences (EPDs) as comparison tools, he said, noting recommendations in CAB’s “Best Practices Manual” available online. DNA-based tools can also help select heifers with increased marbling potential.

Once calves are born, beef quality is maximized with proper care.

“It boils down to what those things are that impact marbling,” McCully said. “Health and management, nutrition and creep feeding in particular. Know and be aware that the nutritional management of the calf while he’s still on the cow can affect weaning, and that calf’s marbling ability.”

A slide of a steer chasing men over a cliff demonstrated the importance of selecting for docility.

“We all know disposition is important from the family aspect,” McCully said. “They’re also hard to deal with, they’re hard on equipment and they produce a low-quality calf in the end.”

He encouraged producers to establish benchmarks and measure progress, keeping records even after the sale.

The market price shifts have more ranchers looking at retained ownership through the feedyard phase, but if that’s not a possibility, McCully said there’s no reason to waste any of the hard work and planning that went into their cattle.

“A feeder usually gets a set of cattle and knows almost nothing about them,” he said. “There’s no owner’s manual with that set of cattle.”

Such cattle are often capable of better, but can be mismanaged in the feedyard, simply for lack of information. To prevent that disconnect, McCully suggested ranchers and feeders work together. Those who sell should share health and genetic background, and those who buy should give feedback on performance and carcass merit.

“Typically, with no background on the cattle, they are managed like the average,” he said. “What we should be doing in an efficient system is managing those cattle to their genetic ability. Do we take them a little bit farther, to maximize their marbling? Or at what point are we just wasting feed on those cattle that don’t have the ability to hit a high-quality target.”

Missed opportunities only detract from profitability throughout the system.

Beyond marbling, McCully discussed options to improve beef tenderness

“While historically we’ve dealt with the issue through aging and other post-mortem techniques, identifying and eliminating those problem genetics should be a goal for cattlemen,” he said, noting the ability to measure and select for tenderness will improve with new technology.

Finally, McCully suggested being mindful of the size of cattle.

“We do get a lot of questions about carcass size and ribeye area,” he said. “Cattlemen need to think about ramifications as we look further down the chain.”

Showing steaks cut from different size ribeyes, he said, “The thinner steak from the bigger ribeye is probably harder to prepare to the perfect degree of doneness. Overcooking this steak jeopardizes the consumer’s experience.

Not suggesting a switch to smaller animals, McCully simply said the concern calls for balance.

“We have to have pounds for this to be a sustainable business. That’s ultimately what we’re selling,” he acknowledged. “All these things are important. But we have to make sure we’re not losing sight of the consumer’s eating satisfaction.”

Consumer trends, more than fads

By Hannah Johlman

Trends in the food business affect people far beyond restaurant diners and retail shoppers. They reach back to the farm and ranch to shape the way food is produced, keeping consumer demand for high-quality, sustainable beef top of mind in the country.

At the National Restaurant Association (NRA) trade show in Chicago this spring, exhibition halls were filled with chefs, culinary and other professionals, ranging from food to beverage, packaging to cookware.

Midan Marketing, which encompasses the food chain from gate to plate from offices in North Carolina and Chicago, shared five beef demand trends noted at the show:

Trust and transparency are tops
Local is trendy, but fuzzy
The Story matters
Premium is in
Fat is back

“There was a clear theme that attendees were seeking regional or local products, sustainable products and transparency between producer and consumers,” said Steve Hixon, account management director for Midan. Trends were identified from topics in common among exhibitors and presenters throughout the show, he explained.

Some of the biggest changes Hixon noticed were increased demand for added value – both in terms of processing and high-quality beef – and more desire for transparency from producers.

“Cattleman should really see that as an opportunity to do a better job of adding value to the cattle they’re producing by doing simple things,” said Mark McCully, vice president of production for Certified Angus Beef LLC (CAB). “Sometimes we look at these things as cattleman and maybe get a little overwhelmed at, ‘What does the consumer fully want to understand?’”

The answers are simple though, he said.

“There are some basic things that I think the market will start rewarding as it relates to source verification, some documentation of animal care, antibiotics, stewardship and those sorts of things,” McCully said.

Those components combine to create the producer’s “story.”

Hixon said producers at the show who stood out in telling their story demonstrated being “genuine and transparent. No smoke and mirrors but complete openness to the process and the distribution.”

“Small farmers should focus on their niche,” he said. “Don’t expect to consume the whole pie. Capture your piece and do it well.”

And they should not feel intimidated competing with larger producers, either. Using the power of social media to reach consumers gets your voice heard, Hixon said.

Combining clear channels of communication with a quality product leads to the top, McCully said, noting that has long been the recipe at CAB.

“It’s kind of the cornerstone of how this brand was built,” he says. “It is understanding that at the end of the day, the consumer still wants a consistently great eating experience and quality products.”

Most cattlemen know some basics of what consumers want, but as trends like the top five from the NRA show become more apparent, McCully said it’s time to think about how to fit those into management and marketing today.

Consumer trends headline beef conference

by Miranda Reiman

“The prosperity of this entire industry lies with the consumer.”

Ag economist Ted Schroeder made that statement during the recent Beef Improvement Federation meetings in Manhattan, Kan., June 15-17, but it summed up the theme of the opening session.

Schroeder and fellow Kansas State University ag economist Glynn Tonsor kicked off the conference, talking about beef demand in the next two decades.

Tonsor pointed out four competitive advantages the U.S. and Canada have over trading partners:

Trust that the product is safe and correctly identified
A grain-finishing system that supports high-quality production
Solid infrastructure, including transportation and research expertise
Property rights and business practices that encourage investment

“We are not a low-cost producer,” Tonsor said, and we have fierce competition. Countries like Australia and Brazil are “not standing still waiting for us to get our act together,” he continued, suggesting that market opportunities will “pass us by if we don’t improve on communication, coordination, signaling.”

Not only will the demographics of our domestic consumers change in the next few decades, to include more Hispanics and other backgrounds, but beef’s core customer base will increasingly rely more on exports.

“Global is where our major growth potential rests,” Schroeder said. It’s more important than ever to focus on trade negotiations and overcoming trade barriers.

“The goal is to create value for everyone,” said John Stika, president of Certified Angus Beef LLC, He addressed the crowd on “The Consumer-driven Food Business.”

That’s the only way beef-eaters will buy more at a higher price. Something they’ve proven they will do if the perceived value, in the “price-value relationship,” is solid. Stika shared Certified Angus Beef^® (CAB^®) brand demand as a case study. It’s increased 98.1% since 2009, at the same time USDA Choice demand decreased.

The price side of the equation was steep when compared to other proteins, but “taste-driven consumers” still chose beef, he said.

“During the worst economy and a tighter cowherd, premium products continued to grow,” Stika said.

In 2015, beef prices were 57% higher than pork and 207% higher than chicken (see chart).

“If we expect consumers to buy our product, we have to up our game,” he said. That includes continuing to engage consumers, not just with a good story, but by verifying that story.

Brad Morgan, Performance Food Group, said building relationships is key for his company.

“Our customers really and truly want to know, ‘Do you have our back?’” he said.

Among the most powerful groups to have an impact on beef are moms, millennials, and meat lovers.

Moms control $20 trillion in buying power while meat lovers understand beef and are squarely focused on quality, Morgan said.

“They will open their wallets to pay for the best,” his slide noted.

“Millennials, whether you appreciate them or not, they like beef. They just want to know more about it,” Morgan said.

In addition to a story, the product must live up to it, and Keith Belk, Colorado State University meat scientist, talked about traits cattlemen should focus on to be sure it does.

His presentation noted tenderness as the most important measure in eating satisfaction, but “several studies have shown that when tenderness reaches an acceptable level, flavor becomes the most important driver.”

The No. 1 thing producers have done in response to the call for improved quality is “turn the cattle black,” Belk said, asking the beef community to do even more

He suggested looking into the microbiome, or the animal and the bacteria that naturally live on it, to develop future tools.

“We need to learn to take advantage and capitalize on that,” Belk said.

Beef quality has improved, and we are “in the most consumer-centric times we’ve seen,” Stika said. It comes down to this advice he shared: “We need to change our perspective from, ‘I’m in the cow business,’ to ‘I’m in the food business.’”

Less about touring, more about trusting

2016_04_19_mr_Chef Tour-94 — **When a tour bus full of curious chefs pulls into a Nebraska pasture, you know good things are happening.**

“I just wish they’d trust me.”

It seemed ironic. We were enjoying a chuck wagon supper on the Lienemann family farm near Princeton, Neb., when Chef David Kocab told me that. Just prior, we’d taken a pasture tour and talked about everything from EPDs and AI to what the cows eat all winter.

The whole Nebraska-based trip was designed to give the 50 or so chefs in attendance confidence in the beef they serve their customers, to show them the commitment and intentionality at every stop from seedstock supplier through harvest.

We’ve hosted Certified Angus Beef ^® (CAB^®) brand Chef Tour for six years and taken somewhere around 350 professional foodies on many journeys from Texas and Colorado to Kansas and Nebraska, all in the name of building trust.

More than anything, David wants the customers coming to Trentina, his high-end 35-seat, Italian restaurant in Cleveland, to place a little more confidence in him, too.

I heard, “I just wish they’d trust me,” and I immediately thought of Anne Burkholder and the feedyard video we recently shared. The chef’s statement was almost a carbon copy to one of her heartfelt ending lines: “I would really like people to trust me, and I know that’s hard to do because you don’t know me.”

2016_04_19_mr_Chef Tour-21 — Trevor and Torri Lienemann opened up their farm to the group. At the end of the evening, Trevor told the chefs, “I just wish you could stay longer.” You could tell he meant it.

Conversation by conversation, that’s changing. There’s no way you could listen to the Lienemanns and not get lit on fire by their enthusiasm for the beef community.

The chefs sensed that, too.

“I have to go home and think of more things to do with Certified Angus Beef, more ways to use it,” David told me.

2016_04_19_mr_Chef Tour-41 — Paul gave basics on beef production, while the Lienemann family shared more about their farm.

And this is coming from a guy who renders the trim fat to make a beef candle that burns on the table, until the waiter lets you in on the secret: you can dip your bread in it! They are creative beef users.

“Utilization is big for us,” he says.

“Italian food is based on making something out of nothing,” David says half-joking about flour and water as the base. But the “waste not, want not” culture is alive and well.

Now he knows cattle fit that, too.

“They are the biggest solar converters, taking grass and making it into quality beef products,” he says.

David saw where you come from. He trusts you.

2016_04_19_mr_Chef Tour-165 — Our own Chef Michael cooked steak and all the fixings alongside Chef Kent Rollins, famous for his chuck wagon eats.

“They have spent all this time raising it to the perfect state,” David says. “Now it’s almost on us as stewards to give customers something with the same flavor profile, but an entirely different delivery.”

“The Cleveland dining scene has come a long way, and our diners are much more open-minded today,” David says of Trentina customers. He sincerely hopes he’s earned their good faith, and yours, too.

“Just trust us. Don’t be afraid of the food,” David says.

If you order a tasting menu, taste everything. And please, pretty please, don’t ask for the sauce on the side.

May your bottom line be filled with black ink,

Miranda

Beef must differentiate

Keeping up with the times includes marketing

by Miranda Reiman

A lot can change in half a century. A lot can stay the same.

U.S. feeder cattle illustrate that well, said Mark McCully, vice president of supply for the Certified Angus Beef^® (CAB^®) brand, at the Indiana Beef Cattlemen’s Association annual meeting last month.

“Think of how we are selecting genetics today—the tools and amount of information we have available—versus 50 years ago,” he said. “In many cases, herd bulls are selected with far more precision, and yet we still tend to lump their offspring together with others. We use ‘the eyeball test’ and sell them as a commodity.”

Programs that detail health history have been around for a while, but those are just part of what’s possible in classifying differences, McCully said. One relatively new opportunity is genetic documentation.

“We’ve probably suppressed some value discovery in the feeder calf market over the last few years just because the cow-calf producer has had the leverage,” he said, “but now that’s changing.”

The comments were part of a talk on “value-added cattle,” which McCully noted everyone in the beef chain defines differently. To some, it means trying to “upgrade” inferior cattle. Others might interpret it as a special feeder-calf program or coordinating genetics and management to aim for a premium target. Consumers tend to rely on brands, he said.

Using a live, text-to-respond tool, he asked the audience, “What’s the most important trait for a value-added feeder calf?”

Nearly half, 47%, said “source verification,” while another 37% said “health documentation, and the remaining 16% selected “genetic verification.” No one chose “humane care” or “age verification.”

As fed cattle are marketed, however, the real value drivers are in performance and carcass merit, McCully said. Marketing has shifted from a 50-50 split on formula versus cash in 2005, to nearly four out of five fed cattle sold on grid or formula pricing today.

During that same time, the number of USDA-certified branded programs grew from 53 to 197.

“The mix has really changed over the last 10 years,” he said.

Reviewing the USDA-reported average load counts by grade, the number of branded boxes versus Select boxes flip-flopped.

“This was the first time the beef industry sold, on average every week, more boxes of branded beef than Select—almost three times more than Select,” McCully said, noting that in 2005 that ratio was 3:1 Select to branded.

That indicates the market signals are working, he said.

February wholesale cutout prices for a 900-pound (lb.) carcass showed nearly $200 difference between a Select carcass and one that had qualified for CAB, for example.

McCully asked, “What is the No. 1 reason consumers purchase beef?”

Almost three-quarters of the respondents replied, “unique and desirable flavor.” Their answer lined up with decades of end-user studies, many of which show that eating experience improves linearly with quality grade.

The group collectively looked into the future to predict which trait would increase the most in value.

Marbling/quality-grade premiums came in first at 40%, followed by naturally-raised/organic (23%), genetic documentation (20%) and humane handling documentation at 17%.

“There is no ‘right’ answer,” McCully said, but the informal poll should make producers think about what creates value now, and what will in the feature.

A lot can change. A lot can stay the same.

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