Spring 2022 FRONTLINE Beef Producer

MAKE THE MOVE TO QUALITY

by Darrell Wilkes, Ph.D., International Brangus Breeders Association EVP

I am sometimes accused of being on a soapbox when it comes to the quality revolution that is taking place in the beef industry. I’ll gladly accept that criticism. Like many of you who are reading this article, I was deeply involved in the beef industry during the “non-glory” days. Demand for beef was in a nosedive. Anybody who owned cows during those years of the 70’s through 90’s, or anybody with a mortgage on their ranch, had to wonder if they were making a horrible decision by not bailing out while cows and ranches were still worth something (albeit not very much). Many of my rancher friends were encouraging their kids to pursue a career outside of the beef industry. Per capita beef consumption dropped by 20 lbs, or about 25%. And just to add some salt to the wound, while the per capita consumption was declining, the inflation-adjusted price was declining too. When an industry sells less of its product at a lower and lower price, there is no other way to say it – it is a demand disaster.

Many factors were at play during this time. Beef was cast as a bad actor from a nutritional standpoint -- heart disease, cholesterol, fat in the diet – etc. The government started giving dietary advice that wasn’t very kind to beef (remember the food pyramid?). The beef industry fought back, thanks to the beef check-off, and began busting some of the misperceptions about beef. We discovered that some cholesterol is “good cholesterol”, and beef had more than its share. We started pointing out the nutrient density of beef – iron, essential amino acids, etc. As an industry, we threw our resources together and made a strong case that beef fits perfectly well in a healthful diet. In short, we fought back with facts and turned the tide.

While the industry was fighting this fight and winning, we had other issues with our product that weren’t getting enough

attention. The first National Beef Quality Audit was completed in 1992 and showed that the beef industry was not producing the mix of quality grades that the marketplace preferred. As a result, we were not only giving up some money, we were turning off some consumers. We learned that up to a third of less-than- Choice steaks failed to satisfy consumers – lacking tenderness, flavor, etc. This shouldn’t have surprised anybody. There was a time when carcasses that would not grade Choice were not quality-graded at all. They were not rolled with the ink roller used by graders and were called, literally, “no rolls”. No-rolls comprised nearly half of the carcasses from fed steers and heifers in the mid 80’s – a time when demand was declining rapidly. That category contained carcasses that would grade Select today, along with a good number of carcasses that would grade Standard under today’s grading system. A friend of mine in the packing industry told me that they offered this product under the label of SES – “Special Economy Selection”. He then quipped that, internally, they called it SES for “Sure Enough S#&t” – use your imagination.

The beef industry finally had to admit that the demand decline for beef was not only a perception problem, it was a quality problem. Not everybody in the beef industry was willing to accept that, so they denied it and lagged behind. Others accepted the challenge and started RAISING BETTER CATTLE!! Today, nearly 85% of all beef produced from fed steers and heifers grades Choice or higher. The percent Prime has jumped from 2% to 10%. Beef in the upper section of the Choice grade has doubled. Meanwhile, the demand curve for beef has turned sharply higher. The demand curve is virtually parallel to the quality curve. It is not a coincidence. It is an obvious cause-and-effect relationship. Better quality equals stronger demand. Again, this should not surprise anybody. It holds true in virtually every industry. Meanwhile, back at the ranch, this quality revolution is seen by many as a threat to indicus-influenced cattle because, historically, indicus influence has been a negative factor when it comes to marbling, which is the primary determinant of USDA quality grade. The biggest mistake that breeders of indicusinfluenced cattle can make is to chalk this all up to a “perception problem”. Just like the beef industry at large had to finally admit that it had a genuine quality problem (not just a

perception problem), cattle producers in the southern tier where indicus influence is essential to productivity need to understand that quality is still a concern but there is a way to address it. There is a way to produce the highest quality beef from indicusinfluenced cattle. It’s all about GENETICS.

I was invited to a conference call several months ago involving a number of gulf state cattle associations and all of the “American breed” associations. Also on the call was a feedlot owner from the panhandle of Texas with a feedlot full of “eared” cattle, as he referred to them. After listening to complaints about the perceived unfair discount on “eared feeder cattle” from several parties on the call, the feedlot owner offered up some data from two pens of cattle that he had closed out that very week. He described both pens as “eared”, period. The fist pen graded 75% Choice, yielded very well, and brought back a live equivalent premium of $4 per hundred. On a 1,400-lb steer, that’s $56/hd which is real money to a feedlot with tens of thousands of cattle on feed. The second pen graded 17% Choice and, although not stated, they were probably at least 17% Standard grade (a notch below Select and heavily discounted). The second pen was hammered with a live equivalent discount of $7/hundred. That’s about $98/hd discount on a 1,400-lb steer. The feedlot owner was very diplomatic in the way he presented his data. He wasn’t being defensive or accusatory at all. His point was that “eared cattle”, as he described them, were not predictable. They might be pretty good, or they might be pretty bad – when sold on a carcass grid. It’s a crap shoot!

Following the call, I was compelled to do a little math exercise. If you average the premium and discount on those two pens of cattle, it comes out to about $42/hd net discount. Specifically, $42/hd less than the prevailing live price. I then pulled up the research paper from Kansas State University where they summarized 20 years of price data from Superior video – involving millions of cattle. On 6-weight feeder cattle sold on

Superior in recent years, Brahman-influenced cattle averaged about $7/cwt discount compared to English and English cross cattle. That’s about $42/hd. Ponder that. Coincidence?

I’ll get hate mail for this, but I offer up a photo of cattle that I describe as “indicus soup”.

a photo of cattle that I describe as “indicus soup”

I submit that there is not a sire breed in existence that can be bred to these cows and consistently create something that is predictable and meets the quality expectations of the beef industry in 2022. Moreover, these cows were born in herd where half of the calves were steers and were sent to a feedlot. If somebody wants to prove me wrong on this point, please bring your data. No matter what sire breed is chosen, you’ll have every chromosome pair in a contest to see whether the quality genetics win or lose. At best, they average out which might have been good enough to hit the industry averages of the 1980’s but not the averages of the current industry.

Embracing quality means embracing consistency and predictability, which only comes from known genetics. Brangus cattle were developed to leverage the beef quality characteristics of Angus with the thermotolerance of Brahman. In other words, quality beef was a goal from the very beginning even before the quality revolution kicked in. Nobody imagined back then that the beef industry could produce 85% Choice or better beef across the board. Today, we see Brangus cattle routinely topping the industry average for quality grade while the cows that produce those kind of steers work for 10+ years in hot/humid country, vast western deserts and toxic fescue pastures.

A flight to quality for producers in tough environments is a flight to Brangus. With retained heterosis, comprehensive genetic evaluation and a hearty embrace of genomic technology, members of the International Brangus Breeders Association have what you need to participate and win in the era of quality.

Cows like these, complemented with registered bulls from Brangus breeders, are the key. Go Brangus. Embrace quality!