Everybody’s doing it…or not!

Last week I told you how nearly 75% of the nation’s herd is black-hided. At first glance, it may seem like everybody’s jumped on the bandwagon, producing calves aimed for CAB and other branded programs.

Larry Guggenmos, Nebraska cattle rancher/feeder

But on a recent on-location stop rancher/feeder Larry Guggenmos made an observation that sounds like one we might have made ourselves: “When we started on this high-quality trail, I thought everybody else would be right behind, but it hasn’t happened yet. I can’t figure out why.”

It also contradicts this Monday’s falsehood.

Myth: Beef quality is in vogue. It seems like everybody is paying attention to it these days.

Fact: If there were really enough producers selecting for and managing cattle based on end-product merit, we’d be the first to know. The fact that they aren’t is job security for those of us on the Supply Development (as in, here to try to create more supply of CAB) team.

More to the point, the recent run up in the Choice/Select spread to $18, shows that the market is willing to pay for more high-quality beef. And it indicates there isn’t enough.

The soon-to-be-released National Beef Quality Audit puts out a clear call for more Prime and premium Choice. The target-consumer consensus suggests 5% and 31%, respectively, when production levels for all beef in those categories during 2011 was 2% and 20%, 14 points short of expectations.

And we believe if we were hitting those levels consistantly, we could reach a new height with demand. As in, if people were eating really good beef all the time (rather than spending plenty of dollars on a mediocre product sometimes) they will want to buy more of it. After all, we can’t license more retailers or build relationships with new exporters until we know there’ll be product for them to sell.

When I started with CAB in 2006 we were talking about brand acceptance rates around 15%. Today that has increased to 24% of black-hided cattle that pass our 10 carcass specifications. So clearly, quality has risen. The industry is figuring out the teamwork it takes to make that perfect steak, but to say “everybody’s doing it” would be a far stretch.

The good news story? If you produce what’s in demand and follow the right marketing channels, you’ll be rewarded.

Larry Guggenmos knows that. He sends some loads that are nearly 80% CAB and Prime.

And he’s not one to do something just because it’s in vogue.

May your bottom line be filled with black ink,

~Miranda

Bad math or complex numbers?

We talk about a lot of numbers on our team.

We talk about the nation’s cowherd. We discuss Angus bull sales. We might note the futures market, the corn market and the latest cattle on feed report. We study marbling scores and the percent of cattle grading Choice like it’s our job. (Ok, it kinda is our job.)

2012_05_30_mr_Chappell Feedlot-95 — We’ve probably analyzed these fed animals via more than one report.

And in the fall, we just might be caught talking about the football scores of K-State or Ohio or Michigan.

But we also know that numbers don’t always tell the whole story. Which is good news (as in job security) for writers like me (and Steve), because we get to put a few words with those numbers to make ‘em make a whole lot more sense.

That leads us to today’s myth.

Myth: If the USDA number for black-hided (A-stamped) cattle in the harvest mix is 62.9% and bull surveys show more than 70% Angus bull usage, then somebody’s doing some bad math.

Fact: At first glance, it looks like something doesn’t add up, that the percentage of A-stamped carcasses should be higher or people aren’t really turning out as many Angus bulls as they say they are. But the guys in our Packing Division say you’ve got to dig a little deeper–that USDA-reported number has a lot of factors rolled up in it.

The A-stamped figure includes native black-hided cattle, along with Mexican and Canadian feeder cattle imports, Canadian finished cattle imports and fed dairy cattle.

Sure, some Mexican cattle will be black-hided and counted as such, but it’s safe to say their cattle population and ours aren’t exactly identical. CAB director of packing Clint Walenciak applied that logic (along with estimated percent black numbers) to each of the other categories to arrive at a native black-hided number.

The end result? An A-stamped number 12 points higher than the all-inclusive USDA figure. It rose from 61.5% to its peak of 74.9% in 2010, and stood at 74.2% last year.

If you want the whole story, check out: What’s hiding?

We watch that number with interest because we can only apply our 10 carcass specifications to the cattle that reach that first hurdle of being black-hided. Another number we watch, our CAB acceptance rate, is around 24% today. And quite honestly we could use some more.

As Clint notes (and the reason we track so darn many numbers) : “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.”

May your bottom line be filled with black ink,

Miranda

Natural, organic – What’s the diff?

All natural. Certified organic. Non-hormone treated cattle.

I take for granted that I generally know what all of those terms mean because of the business I’m in. But if they still confuse you, then this is the post for you. (And you’re not alone. Our team is always fielding producer and consumer questions about them.)

Myth: In beef production, the terms “natural” and “organic” are interchangeable.

Fact: They’re not the same. Natural is a marketing claim, which can vary by brand or company, while organic is more rigorous and is certified by USDA.

To be honest I can’t keep all the natural programs and requirements straight. They vary a lot. But I can tell you that Certified Angus Beef(R) brand Natural is what we call a “never, ever” program—cattle never receive antibiotics or added hormones. They’re also fed a 100% vegetarian diet and are minimally processed, without added ingredients. (Information on producing cattle for CAB’s natural program is just a click away.)

Here’s how the government defines natural: “As required by USDA, meat, poultry, and egg products labeled as ‘natural’ must be minimally processed and contain no artificial ingredients. However, the natural label does not include any standards regarding farm practices and only applies to processing of meat and egg products.”

That leaves it pretty wide open, huh?

Organic, however, has a pretty specific definition. Cattle must meet those “never, ever” standards I mention above, plus receive certified organic feed. They must follow specific production protocols, which are too numerous to list here, but can be accessed via the USDA website.

Then that brings us to Non-Hormone Treated Cattle (NHTC), which are just what they sound like: cattle that have never received implants. Beef from those cattle is primarily destined for export to the European Union.

I could write on and on about different nuances and things to consider when discussing natural vs. organic, but Tom Troxel, University of Arkansas, does a good job of plowing that ground in his piece: Natural and Organic Beef.

Reading that will do you much more good than me trying to reinvent the wording.

If you still have questions after that, please post them. Maybe I know the answer. Or maybe I don’t, but I bet I can find it for you.

May your bottom line be filled with black ink,

Miranda

A step toward the next step

When I was with foodservice distributors a couple weeks, ago I heard somebody ask: “Well then, why doesn’t every rancher own their cattle through the feedyard?”

To that guy it seemed like a logical step, building relationships and gathering information.

But then we brought up all the reasons why making the leap to retained ownership is hard. The flow of capital and tax reasons. The unknowns and risk versus the comfort of the familiar and a sure thing.

That got me thinking about one time when I was chatting with a rancher and he said, “You know, I wouldn’t mind trying to work with a feedlot, but I wouldn’t even know where to start.”

Myth: There is no information out there for folks who want to try feeding cattle for the first time.

Fact: There are resources and you don’t even have to look that far to find them.

Dozens of land-grant universities have fact sheets like this and this. For a fee, Cattle-Fax offers a wealth of information on the subject.

We think it’s important to know what you’re getting yourself into. You might want to test the waters with a university-sponsored feedout program. (Get a pretty comprehensive list of those here.)

On our website we offer tips and a printable checklist to help navigate the feeding waters the first time around.

Feeders are not scary people. Don’t be afraid to ask them questions.

But if that’s not your research style, you could take on the role of the reporter: ask.

I’ve found every feeder I’ve ever dealt with to be one of the “good guys.” They’ll help you understand the options, the risk, and ultimately the possible reward.

If you want a little one-on-one coaching contact somebody on our team, because as you probably know by now, we’re all about building relationships.

How’s that for some information?

May your bottom line be filled with black ink,

~Miranda

What we don’t know

As our nephew walked across the stage to shake hands and grab his diploma, it brought me back to my own high school graduation. The small-town school, the tight-knit class, the speeches, and of course “Pomp and Circumstance”—just rewind 10 years and change the colors from red and black to orange and blue and it could have been my day to celebrate how much knowledge I’d acquired from all those years spent at GHEC High School.

Yesterday, when I was in Akron, Iowa, for that big event it seemed easy to recall that “on top of the world” feeling a new graduate possesses, how at that very point you feel like you might just know it all. But I also remembered how quickly that fades. You go to college or enter a vocation and you live and learn.

This weekend brought to mind the adage, “The more we know, the more we realize how much we don’t know.”

And that’s exactly the sense I get when we talk about how to get more CAB-qualifying cattle.

Myth: We’ve studied marbling for so long, there’s no point in researchers going over it again.

Fact: In the past couple of decades, the concentration of research on end-product traits has certainly intensified. As the market and business have placed more economic importance on things like marbling, the academic community has placed more importance on studying all the factors that affect it.

I’ve read the abstracts, listened to the presentations and done the interviews. I know there are hundreds of smart people who are digging into the science behind all those things that make you more money on a grid.

One of those is muscle biologist Brad Johnson. A couple years ago we were talking about how implants do nothing to improve carcass quality, and for the most part knock it back a peg, and he said he envisions a future where that’s not the case.

“We’ve tried to embark on a series of research trials here recently at Texas Tech that have investigated the how’s and why’s of steroidal implants impacts on marbling. We know they have profound effects on skeletal muscle growth. If we can unlock some of those mysteries of what’s going on then we can manage it. We could still benefit from the improvement in productivity and efficiency of these tools and try to mitigate the negative effects on beef quality, like marbling.”

How cool would that be?

Then he threw around terms like adipoblasts, mesenchymal precursor cells, transdifferentiation. (Needless to say, I had to do a little decoding before I wrote “Efficient, high-quality beef”) But the point is, this is all stuff that they didn’t know five, ten, fifteen years ago. So imagine what those same researchers will know a decade from now.

Check out this video clip to hear from Brad yourself, as he talks about what they’re up to and why.

May your bottom line be filled with black ink,

Miranda

In their Prime

When cattle are mooing in the background of a phone interview, it’s a good indication to me that my source is grounded in the “real world.”

Of course, I already knew that when I dialed up South Dakota producer Rich Blair, of Blair Brothers Angus, but I was reminded of that with each story he told about their journey to produce the best beef. (They aim for CAB and Prime, with some loads hitting as much as 50% of the latter.)

I’m sure I’ve talked about this myth before, but in case you wanted to hear it put to rest by one of your own, I’ll bring it up again. Plus the way he told the story made me smile.

Myth: You’ve got to have some pretty fancy cattle to produce great beef.

Fact: It’s really not about looks, as Rich found out back in the mid-90s.

“I can still remember the first time I got a Prime carcass and I thought, ‘Wow, that cow must really look special.’ So I went out and found her in the herd and I can still vividly remember looking through the cows and…..well, there she was.

I was never so disappointed in all my life! She just looked like the rest of ‘em.

But the thing she did, is that she made me $200 more than the cow standing next to them and it didn’t cost me a thing. Her calf ran with the bunch, he just had the genetics to grade Prime and the rest of ‘em didn’t.”

His suggestion for making more of those Prime-makers? Study the data, and that will lead you to one solution: straightbred commercial Angus. But that’s another real-world story for another day…

May your bottom line be filled with black ink,

Miranda

One person at a time

From university hallways to airplane cabins, Emily tackles todays myth:

As a student at The Ohio State University it’s a daily occurrence for me to run into people from diverse walks of life. These encounters lead to interesting conversations about any topic you can imagine. Folks may ask what I study, and when I say agriculture communications, the common reaction is a puzzled expression and the resulting question, “What do you do with that degree?”

When I tell people that I’m working at Certified Angus Beef LLC upon graduation, the questions continue:

What will you do for the company?
What is Certified Angus Beef?
What makes it certified versus any other kind of beef?
How do I know I’m getting CAB ® when I go to the grocery store?

At this point in the conversation, the can of worms is open and I can’t hide my excitement for the beef industry. The topic never gets old!

People are fascinated by the amount of thought and hard work that goes into putting the highest quality steak on the table. And, I love telling them about how our producers work diligently to make that possible.

I just had one of these conversations with a recent graduate of the college who now works for OSU.

She asked me all kinds of questions about how producers raise premium beef, what makes one steak better than another, how CAB achieves consistent quality and where she can get a cut of her own.

Myth: People don’t really want to hear the farmers’ and ranchers’ story.

Fact: The general consumer is very interested in learning about how their food is produced, and they’re eager to learn what happens in the entire beef production chain.

Cayman 2012 139 — Chef Scott loves sharing the good news story of how beef becomes beef.

It seems I am not the only one who gets excited to spread the good word. Our corporate chef, Scott Popovic, travels the country visiting influential chefs and participating in high-end food events. On a flight home from one such event in San Francisco he struck up a conversation with a fellow passenger. When he told her about his career, she commented, “I’m just totally against industrialized raising of beef.”

He seized the opportunity, and for the next three hours in flight they discussed her views and his. By the time they landed on Ohio soil, she thanked Chef Scott and said it was great to hear from a chef’s perspective. She was relieved to know producers do what is best for their animals. Chef Scott says “simple conversations like that” can change a person’s outlook on the beef industry.

“I’m getting questions left and right, which is a great sign and only shows that consumers are looking for high quality products,” he says.

So, next time you meet a stranger and they ask you what you do for a living, think of it as a an opportunity to share your story. Judging by our experiences, they’ll be interested in what you have to say.

“One person at a time, that’s my motto,” smiles Popovic.

~Emily

Mythbuster Monday talks change and chance

We’ve all heard the saying – the only thing that never changes is change itself. It’s somewhat of a cliché, but sometimes clichés carry a lot of meaning.

In the beef cattle industry, change can be a slow process. Only about 10% of our industry utilizes artificial insemination (AI) technology. The tool has been available for decades, and one that some would argue that when used well, it holds the single greatest potential for genetic herd improvement. But change is hard – it takes time and a lot of considerations to decide if such a large change in your breeding program is right for your operation.

On the other hand, our industry can be taken by a storm of change in an instant – remember two months ago when the term “lean, finely textured beef” wasn’t a part of any of our normal vocabularies?

We see these things happen overnight, or over a gradual period of time. This winter, my mom, dad and I worked cows together – just the three of us – while I was home. It was a different scene than the one I remembered from childhood. It was quiet, calm… slow and easy.

Then, working cattle seemed like such an ordeal. It took a crew – neighbors, family and friends – all with hot shots in hand, pickup horns blaring, cattle bellowing and tempers a little short. But slowly, over the years, we started eliminating things that didn’t seem to work so well in exchange for a little quieter method.

Maybe it’s the grey hairs I’ve started to see popping up more and more in dad’s beard, maybe it’s more resources available on low-stress handling, or maybe it’s just the necessity of needing to do the same amount of work with fewer hands around the farm. Regardless of the reasoning, things have changed.

Last year was the first go-round of AI’ing heifers at Nelson Farms. It proved its value in the boss man’s mind, so now it’ll be the route for all females. This year, the goal is to get all 300+ ladies calved in less than a 45-day calving period.

Among other reasons, he told me: “Laura, I’ve been calving cows for 50-some years, and I’m tired of it taking all spring. I think it’s time I deserved to be done with calving at a decent time and enjoy my spring. Heck, if this works out well, I might even get to spend some time visiting my daughter in Montana. I might even take up fly fishing.”

moving — Laura is headed west, taking a few branded souvenirs along.

For a man who always considered a week in town for the county fair to be the only necessary “vacation time” in life, that’s a big change. It also brings up another one… that daughter in Montana. That would be me, making a move to a state a little closer to Nelson Farms, looking forward to making a home somewhere that my family can visit a little more frequently (perhaps even giving way to a new fishing habit for dad, I hope) than my current Ohio one.

This all leads me to today’s myth: That good lookin’ black calf does all the talking for the Black Ink team.

Fact: While I do sometimes feel a bit like the Wizard of Oz, talking behind the screen of that black calf on our Facebook and Twitter accounts, you know better than that here on the Black Ink blog. You usually hear from Miranda each Monday, Gary posts updates from the road and Steve’s tuning in from Rocky Top from time to time.

The truth is, everything we do under the Black Ink name is a team effort – Larry, Mark, Paul, Gary, Steve and now Kara are sending Miranda and I updates and thoughts from their travels through the cattle industry that we share with you here, here and here. Often, those thoughts have come through my voice as we’ve navigated and explored new ways to share pertinent beef quality information and learn more from you all along the way.

From now on, you’ll hear those other voices chiming in more often… maybe you’ll be able to pick up on Miranda’s slight Minnesooootan accent and never-ending optimism through her typing, and you’ll get more of Steve’s witty, dry humor and obscure and interesting references.

While a quick change in some respects – this will be the last time you see blackinklaura pop up in a blog byline here – most of them will be subtle. You’ll see different authors here, new ideas on Facebook and different perspectives on Twitter conversations. But, the message will always stay the same – finding ways to add more black ink to the quality-focused cattleman’s bottom line.

It’s sure been fun being the voice behind so many of these messages over the past year or so, and I’ll look forward to tuning in just like the rest of you from now on—by pushing that little subscribe button at the top right!

-Laura

Signals through the clouds

Calcultors don’t ensure the accuracy of the math.

Permission to use a calculator on homework and tests was like a coming of age in the mathematics arena.

In our school, that happened when you entered seventh grade. You moved to a different building in the neighboring small town. You could try out for cheerleading and go to those awkward teen dances. And you got to use a calculator. Oh, the thrills of junior high.

But I remember vividly the constant reminders from our math teacher: “Your calculator is only as good as the numbers you put into it.”

And today, that’s kind of how I feel about this one.

Myth: USDA-reported CAB premiums tell the whole story of packer demand for high-quality cattle.

Fact: The figures in the weekly USDA Premiums and Discounts report can be misleading.

You see, we call ourselves “The Brand that Pays®,” and so every two years, we survey packers to find out exactly how much does it pay if your cattle make CAB. They share information, with the understanding that we’ll share it as a collective group (No, “Cargill paid X-amount for CABs compared to Tyson’s Y-amount” for example.)

Looking over this year’s survey information it seemed odd that packers told us they paid 40% more in CAB premiums last year when the USDA reports only rose only 7 cents for that same timeframe.

So Steve dug into the details, and found they make things a little bit cloudy. Thus he wrote the article: Details cloud signals, just to shine another kind of light on facts. It’s in March Angus Journal, but you can read the summary story here.

That’ll give you the whole scoop, but here are a few quotes from Brittany Koop, USDA Live Cattle Mandatory Price Reporting Supervisor, that help make my case:

“Some plants have multiple grids but they are only required to report the premium they will pay the most frequently. So, no matter the high and low, if they expect $3 to be the CAB premium they will pay most often, that one figure is what they report to us.”
“We go with a CAB weighted average by plant capacity, so the company with the most capacity has the most weight for its reported grid price.” But that doesn’t mean the plant with the most cattle has the most CAB-qualifiers….hmmm….
“The rule specifically states it is what they expect to pay.” Not what they actually pay….double hmmm…

Just mentioning “mandatory price reporting” can ruffle feathers. It’s political and I don’t like to go there. But I’m not here to make a case for or against it.

I just want you to know that the sometimes the calculator is not the Holy Grail. I’m sure my math teacher would be proud I remember that.

May your bottom line be filled with black ink,

Miranda

Everybody’s doing it…or not!

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What we don’t know

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Signals through the clouds

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