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How’d they grade?

 December 20, 2011

A million years ago, or, maybe more like 38 years ago, I sold my first steer to MBPXL in Wichita, KS through our county fair livestock sale.  I’m not remembering what it brought, but fifty-eight cents a pound, live, sticks in my mind.

Then, as now, most cattle are traded on a live or cash in-the-beef price (priced on the hot carcass weight). Others are sold on a grid where premiums exist for USDA Choice, Prime, CAB and other branded beef programs, and discounts for those that are overly fat (excess outside fat) or “underly” marbled; carcass weights over the 1,000 lb limit; carcasses that are under 550 lbs, or carcasses deemed to be too old to qualify for the higher quality grades.

When people used to say, “how’d they grade?” I had no idea, really, what quality grades, or yield grades were! At least not until I got into college, and took some meats courses. I found out I was not alone; in fact, it has downright surprised me how many professionals in the industry (who are not directly involved in the end product business of the industry) DON’T understand how animals are graded. I suspect there are others out there that don’t know either.

In today’s world, where a larger share of the cattle are marketed on a grid and paid premiums for what the market wants, “How’d they grade?” means what percentage of USDA Choice were in the harvest mix…….was it below or above the industry average.  And a Yield Grade 4 or 5, what’s that mean in the term “grade”?  It’s time to learn, know, research and absorb.

First of all, not all plants have USDA employees who do quality and yield grading. All plants must be inspected by the USDA to ensure certain food safety regulations and harvest practices.  So a packing plant will have USDA inspectors who make sure all the rules are being followed to ensure a safe beef product and supply, but not all plants are “graded” plants; i.e. those who assign quality and yield grades to beef carcasses.

Grading is VOLUNTARY, and plants can choose whether or not to pay for that service. In order to process beef animals, plants must be inspected, but do not have to be graded. Many small plants are not graded plants.

In our publication, “Beef Carcass Grading Overview” (which you can get a free copy of by calling the Ohio office at 330.345.2333) the entire process is explained quite clearly. 

In a nutshell, however, here’s the “skinny:”

Beef carcasses at “graded” plants are assigned a USDA Quality Grade and a USDA Yield Grade. Quality grades for market steers and heifers are, in descending order of quality:

  • Prime
    Evaluating the ribbed carcass “face.”
  • Choice
  • Select
  • Standard.

These grades are determined by the USDA grader, and possibly by a camera which captures a digital image. Quality grade is a visual, or in the case of a camera, a digitized image of the amount of marbling, or intramuscular fat in the ribeye.

Approximately 24 hours after harvest/slaughter, the carcass is “ribbed” between the 12th and 13th rib and that open “face” of the ribe eye muscle (longissimus dorsi) is exposed to the USDA grader.  The more marbling, or “flecks” of white fat in the muscle helps determine the quality grade.

The amount of marbling in the meat determines quality, because it adds more taste and juiciness to the product. A highly marbled ribeye wil be stamped “Prime” or may have three little “USDA” stamps on it.  A carcass that has a little less marbling will be stamped “Choice” or may have two small “USDA” stamps put on it; a “Select” carcass has very little marbling and will get stamped as such, or with one small USDA stamp.

USDA Prime, Choice and Select grading standards
USDA Prime, Choice and Select grading standards

A USDA “Standard” carcass has practically no marbling in it. Considered the lowest quality, it is often refered to as a “no-roll,” (graders used to use a rolling stamp on carcasses that showed what quality grade the carcasses were…..those with no “roll” of grade on it were “Standards” or, again, “no-rolls”.

There’s a lot more to understanding the question “How’d they grade,” but this is a good start. We’ll get into more later this week. Until then, Adios!

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December 19, 2011

Here’s your Meat Market Minute for this week:

Only a small amount of cash trade occurred this week as packers and feeders were unable to agree upon prices.  Packers are buying for two Holiday-shortened weeks that are projected to run only 32 hours of production (each week), so that limits their incentive to bid prices up. Some trade was recorded in Kansas as market-ready cattle traded $2 lower last week at $118; Nebraska saw light trade at $119.

Cutouts remained relatively strong despite the seasonal downturn beginning to emerge on ribs. CAB lip-on ribeyes had been carrying the cutout values over the past few weeks, but last week they gave up almost $0.60/lb. As a primal cut, the rib lost 5.2% of its value. With Holiday purchases in place and deliveries beginning to come in, buyers’ attention has quickly turned to end meats. CAB chucks and rounds have found support at current price levels for retailer ad-buying and those are replacing ribs as the foundation of the CAB cutout value.

Quality grades finished November hovering below 60% Choice (59.2%), which helped limit CAB acceptance rates to a three-year weekly low (17.1%). Although fed harvest maintained a level below a year ago, the drop in certified head (11,590 head) can be mostly attributed the 3.4% drop in certification rate versus the previous week (11/21/11).

‘Til we meat again,

 

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December 12,2011

Here’s this week’s Meat Market Minute:

The live cattle market showed its first indication of seasonal weakness coming off of holiday highs. According to CattleFax, fed cattle traded at $120 in the South and at $121 in the North, approximately $4/cwt less than the previous week. This comes as packers continue to curb production (16,000 head less than previous week) in response to their position in the market, and that could work to their advantage in live cattle prices. Moving forward, packers will continue to lessen harvest due to holiday shortened production weeks and lower demand. By the way, the 2010 federally inspected harvest for the last three weeks of December were (in thousands): 659.8, 544.9 and 566.6.

Cutout values were down across all grades and quality levels last week: CAB -$3.30, CH -$3.80, SE -$2.70. Much of the downturn was attributed to weakness in demand for holiday ribs, simply because virtually all of those purchases have already been made. With no other news in the market, buyers’ interest has been lackluster; they see the downward trend and don’t want to commit to buy at current prices.

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Weekly harvest increases, still short

December 5, 2011

Here’s your Meat Market Minute for the week:

Packers held bids until late last week, but live cattle prices did not sag much while waiting; Southern trade remained in similar ranges to the previous week. Packers increased harvest by 16,000 head over that weeks’ holiday-shortened numbers, but still fell well short of the previous year. CattleFax reports that harvest will remain under previous-year levels through December, while fed cattle numbers increase. That would shift market price leverage toward the packer.

Cutout values traded softer last week despite the previous holiday-shorted production week. End meats were the biggest bargains as CAB chucks and rounds lost 2% and 3.3%, respectively, due to lower buyer interest and ample offerings. Ribs continue to be the driver of the cutout, but most buyers’ holiday needs have been booked and they are reluctant to buy additional product on the spot market at current trading levels.

Meanwhile, recent trends help explain a decrease in the supply of Certified Angus Beef (R) brand product. In mid-November, the weekly acceptance rate declined to levels last seen in 2009. The Choice/Select spread hovered in the $18 to near-$20 range while the CAB/Choice spread added another $10/cwt. of carcass.

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Moving the market

November 28,2011

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Packer buyers this past week were purchasing a full week’s worth of cattle and did so in just 3 days (Holiday shortened). Expectations coming in to that week were for steady to lower values, especially given the weakness in the futures market (Dec $121.30). However, packers raised their bids on Wednesday to $123/$124 in the South and $127 in the North in order to lock up needs prior to the long weekend.

Despite attention being turned to turkeys and hams, all quality levels of boxed beef moved up last week. Packers continue to push boxed values higher to work toward black margins, and reports estimated those had been running as low as -$60/head. With this in mind, many in the beef industry expect cattle harvest numbers to be subdued through the remainder of 2011, as live cattle are likely to stay above $120/cwt.

‘Till we meat again,

-David

David O’Diam is CAB’s assistant director of packing. A born-and-bred Ohian who holds an undergraduate and master’s from The Ohio State University, David makes connections, educates and is the go-to guy for anything CAB Prime or CAB Natural. He also watches the markets, both live cattle and boxed beef, like a hawk. He keeps our sales and supply development staff (and you!) updated on weekly trends in the beef trade.

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Carcass Data Project sets 71% CAB pace

 

by Wyatt Bechtel

July 2011

You could say there were no losers, but room for more winners in the Kansas Angus Association (KAA) 2011 Carcass Data Project (CDP) pen.

“The cattle just did phenomenally—everybody’s did,” said Landon Shaw, assistant manager at McPherson County Feeders, a Certified Angus Beef ® (CAB®) brand partner yard near Marquette, Kan.

In the pen were just 39 steers fed from early January to late May and owned by DeGrande Farms, Gardner, Kan.; Hobbs Ranch, Penokee, Kan.; Nemaha Valley Angus, Bern, Kan.; and Hinkson Angus Ranch, Cottonwood Falls, Kan., which won the CAB-sponsored prize for top carcass quality.

With a group average daily gain (ADG) of 4.4 pounds (lb.) and 100% grading Choice or better, no wonder Shaw was impressed.

“If a guy knew in advance that he could buy cattle of this quality he could afford to pay a heck of a lot more,” he commented.

This was the first year for the feeding project at McPherson County, but the CDP started 15 years ago at Montezuma, and later Scott City, Kan., feedyards, aiming to get carcass data back to anyone using registered Angus bulls.

Anne Lampe, KAA manager, said moving to McPherson offered a more central location that allowed for less average trucking expense across the state.

“When we started this project, grid marketing was not popular,” she said. “People couldn’t just send five head to a feedyard, and even a whole pen could not easily get carcass data back.”

Now as then, as few as five head entered lets a producer see where their herd genetics stand in comparison with others across Kansas.

“It’s a pretty good risk to retain all your calves and put them into a feedyard, depending on cattle or commodity prices, so you have your whole calf crop on the line,” Shaw noted. “If you just want to know how your breeding decisions have been on a representative group of five or 10, this is the perfect opportunity.”

Hinkson’s top honors came from having five of their seven steers qualify for the CAB brand. They did that with a 4.75-lb. ADG, setting two of the high marks for the CDP.

“We were extremely pleased with the way the cattle fed,” Frank Hinkson said. “The ADG was more than we had hoped for.”

The year before, a group of 21 Hinkson steers not in the CDP achieved the same 71% CAB at McPherson, so the quality was on target. Past groups have even gone 20% CAB Prime, but they were four months older, 16 months, he said. “At the age of these seven head, you couldn’t ask for any better performance.”

Neal Haverkamp of Nemaha Valley Angus operates a CAB partner feedlot on his farm, where he usually finishes the steers. “They’ve done well in our feedlot, but I just wanted to compare them in a commercial feedlot setting,” he said.

The 12 steers did well, with 42% CAB and second-best ADG at nearly 4.5 lb. Of course, everyone was pleased with the feedlot performance.

“The rate of gain was good, especially on a group of steers out of first-calf heifers, mostly sired by N Bar Prime Time,” said Terry Hobbs, noting the sire was known for moderate growth but the calves still exceeded 4 lb. ADG.

Hobbs Ranch came in second in the CAB quality contest with six of the 10 entries making CAB.

Most of the breeders were more interested in the data received than the contest outcome, and this was the first year that the CDP included CAB-sponsored cash prizes, $300 for first and $200 for second to the top carcass value pens.

“We wanted to see where we were by putting together a group sired by different bulls we have,” said Shelly DeGrande. Her family’s 10 steers represented four sire groups and came in with the best calculated Yield Grade at 3.01.

Everybody learned more about their cattle, validating success and inviting further improvement. “It’s just a huge point to try and get out there to let producers know how good of a job they are doing,” Shaw said.

Lampe wants to see more CDP participation from across the state with commercial Angus producers as bull customers of KAA members enter steers along with purebred breeders.

“We hope it grows,” she said. “With the results they got this year, people can get excited about this and see it as a good venue for their programs.”

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