Angus points out quality correlation

TOO MUCH OF A GOOD THING?

by Nicole Lane Erceg for Certified Angus Beef

Are we there yet? The thought ran through my mind several hours into a long drive. The talk had worn thin, songs on the stereo now felt stale and both my husband and I were beyond ready to reach the final destination. No hard feelings, these trips are often full of fun, quality time together. But we’d passed the tipping point of good times and were steadily sliding down the other side of the bell curve. Have we reached that point in the quality beef ride, too? We rounded out 2019 with 72 percent of the harvest reaching the Choice grade and 8.6 percent Prime. There’s more premium beef on the market than ever before. Could we be approaching our destination, maybe even delivering too much of a good thing? For decades the National Beef Quality Audit tried to find out if there is an ideal quality grade mix, only for the market to tell us it’s determined by evolving economic signals from consumers. As we’ve gotten better at consistently producing more premium beef, consumption and demand have grown. Our product today is worth more and that value flows back to producers. CattleFax estimates that if demand had not grown in the last 20 years but remained flat, fed cattle would be worth $20 per hundredweight (cwt.) less. We’d be out $270 per head there, and calf prices would be $50 per cwt. lower than they are today. Premium Choice qualifying carcasses can earn up to $50 per head above the bottom third of the category — totaling an added potential value of $90 above the cash market. For those grading Prime, it can mean as much as $200 above cash on value-based packer formula, grid and contract markets. But not every consumer can afford premium quality beef, right? Well, let’s look at the other side of that coin. The Select grade category gets smaller each year, rounding out 2019 at only 16 percent of the mix. In 2018 the Red Angus Association published a white paper on its disappearance, predicting by 2025 Select will be merely a shadow in an industry that’s moved toward higher quality. In practical terms, it already is. The marketability of Select grade beef keeps sliding. As restaurants and grocery chains have learned to appreciate a more highly marbled, consistent product and the value it drives in their business, fewer are willing to accept anything less. We’ve transitioned away from the days where packers had a short list of where to send their limited supply of Prime product to now only a handful of customers that will take the cheaper, lower end. Those who see this boost in quality as the offramp — a chance to drive away from that long journey toward higher carcass quality — may have a bumpy road ahead. The drive is far from over and there’s much to be won by keeping a focus on genetics with that “taste fat” premi um potential. As the bar for average rises, we may see the quality grades shift. Opportunity on the premium end could mean a segmented Prime category, similar to graduated Choice today. We haven’t reached a tipping point. For cattlemen, more of a good thing is a great thing. The drive toward carcass quality isn’t over yet.

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24 California Cattleman March 2020 Describing beef supply and demand as a bit of a chess match, Bruce Cobb says he’s learned the game through various roles in the past three decades. Starting March 1, the Texas native will take on a new vantage point as executive vice president of production for Certified Angus Beef LLC (CAB). “I’ve been able to participate on both sides of the industry, demand development and then supply and I enjoy figuring out: how can we satisfy the consumer and the end user by what we’re doing on the production side?” he says. “Blending those two pieces is where the good stuff is.” Since 2005, Cobb has been at the helm of Consolidated Beef Producers, the country’s largest cattle marketing cooperative. He and his team traded 700,000 head of cattle annually across the West and Midwest. “It’s clear we’re on the right track as it relates to quality. You can look at how consumers have responded just in the last four to five years and how the brand has grown,” Cobb says. “The challenge will be how do we get at those intangibles? These producers care for the animals. They care for the environment and the land. They want to do what’s right.” But the “opportunity is still there” to communicate and capture the value in those facts, he says. That’s just one of the challenges Cobb looks forward to in his new role. As executive vice president, he will oversee the brand’s supply development, producer communications and packing divisions, while serving as the voice of the producer to the greater company. Premiums for the brand are built at the packing level, so cattlemen will also benefit from Cobb’s ability to help packers further identify sales opportunities. “It was important to us that we found somebody so grounded in the production side that they had credibility with the cattlemen we serve, but also that they were able to see beyond the ranch gate to the way the whole beef community is interconnected,” CAB President John Stika says. “That is what’s really exciting about Bruce and the experience he brings.” “In addition, I really think he’s going to fit really well into the culture at CAB, which has been a hallmark of our success,” he says. “Cobb brings diverse perspectives, with the wellbeing of producers from the production but also the demand side.” CC Cattle Mark & Carlotta Poole 805-797-0769 carlottapoole@hotmail.com Catalogs Sent by Request Only: Matt Macfarlane 916-803-3113 m3cattlemarketing@gmail.com AuCtiOneeR eric Duarte: 541-891-7863 BlaCk Oak angus todd and tessa Koch 503-705-2550 todd@tkmfarm.com starlight land & livestOCk tyrel & Brooke Kliewer 541-891-2528 BullS AlSO Sell SiReD By: KM Broken Bow 002 • lD Capitalist 316 V A R empire 3037 • JSl Program 1331 Basin Payweight 1682 • lHR upward 1806 CeD 12 Bw -1.7 ww 61 yw 102 MK 27 MB .88 Re .71 $w 66.85 $B 147.0 CeD 19 Bw -2.0 ww 53 yw 88 MK 22 MB .47 Re .46 $w 58.12 $B 85.91

THD © BiD liVe Online www.liVeAuCtiOnS.tV CeD 19 Bw -2.0 ww 53 yw 88 MK 22 MB .47 Re .46 $w 58.12 $B 85.91 CC SHOOteR 108 12-1-2018 A & B Shooter 3421 x V A R Discovery 2240 CC tenx 106 11-24-2018 Algoma Golden ten x 773B x Connealy Black Granite tMK SOutHeRn CHARM 117F 9-16-2018 BuBS Southern Charm AA31 x SCC Beyond 106x tMK BlACK OAK 104C 899 3-20-2018 tMK Payweight 104C x Connealy thunder Ce Bw ww yw MK MB Re $w $B 6 .5 56 95 22 i.83 i.39 56 144 Ce Bw ww yw MK MB Re $w $B 15 -1.0 54 91 28 i.32 i.61 64 135 Ce Bw ww yw MK MB Re $w $B 6 2.1 59 100 23 i.84 i.73 56 156 Ce Bw ww yw MK MB Re $w $B -1 2.7 63 102 20 .54 .77 60 133 Double J Farms: 13383 Harpold Rd., Klamath Falls, OR SAle Site 55 BullS & 20 ReGiSteReD FeMAleS SAt., MARCH 28 Klamath Falls , Oregon

Sale 1 p.m. lunch 11:30 a.m.

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