Quality grade improvements enables supply, increases consumer demand
For National Beef, increased marbling and improved quality grade has been important in providing supply to meet demand from consumers.
Chad Barker, vice president of procurement for National Beef, says the number of cattle grading Choice has increased from about 45 percent to almost 85 percent Choice today.
“Grading has improved, but it hasn’t changed our focus,” Barker said. “We still look for the high Choice, Prime, quality, black-hided kind of cattle.”
“The quality has improved so quickly, it’s hard to imagine,” he added. “I think we will see the same kind of improvement over the next four or five years that we’ve seen in the last five.”
With the trajectory set, Barker sees the goal of 100 percent Choice cattle occurring in the next five years. He also notes their focus will shift toward soundness and quality coupled with efficiency and feedlot performance.
“Ranchers and feedlots have accomplished so much in improving Choice, and I feel like Prime is our next big opportunity as an industry,” Barker said. “Hopefully, we can balance it with the supply and grow the demand as the supply grows.”
Barker hopes to see the amount of Prime grading cattle increase from one percent today to an average of five percent or better on a weekly basis.
“At those levels, we can start having guys feature Prime beef, expect to get it and hopefully build the business to grow along with the cow/calf guys and feedlots that are producing for us,” he said.
Additionally, the announcement that Select grade beef will be all but phased out by 2025 means Choice will be the lowest quality available to consumers.
“The Choice grade breaks down into High Choice, Average Choice and Low Choice,” explained the Red Angus Association of America (RAAA) in a white paper. “Corresponding scores for those three divisions are Moderate, Modest and Small, in declining order. Of significance is that upper two-thirds Choice carcasses are often cooler-sorted branded beef programs, such as Certified Angus Beef, Sterling Silver or Tyson’s Chairman’s Reserve.”
As a result of genetic improvements, specifically selection of genetics related to higher marbling, has positively affected beef quality grades, said RAAA. Seedstock producers have trended towards high-marbling bulls and females both.
“Commercial producers, for their part, did what the market was telling them to do and bid aggressively on the higher-marbling bulls seedstock suppliers offered. Observable marbling premiums in the wholesale beef market translated back down the supply chain, resulting in both greater demand for and a larger supply of high-marbling genetics,” RAAA added.
The Cattlemen’s Beef Board (CBB) noted beef demand is up 15 percent since 2012 according to January retail sales data from IRI Freshlook.
“Strong consumer beef demand is expected to continue into 2019 with USDA predicting consumers in the United States will eat 8.9 percent more beef this year than in 2015,” CBB added. “Much of beef’s demand is driven by ground beef and loin cuts which are particularly popular with consumers at the grocery store.”
Travis O’Quinn, assistant professor of meat science at Kansas State University, believes consumers have been clearly communicating that Choice beef is preferred over Select, saying, “There is sound evidence Select beef will fail to meet consumer eating expectations about 25 percent of the time. This percentage decreases significantly at higher quality grades – Choice and Prime. Thus, we have hard data supporting the fact that with the increase in Choice beef production and the reduction of Select the overall eating quality of U.S. beef is improving. This trend represents a positive change made by the industry.”
Barker spoke during a recent edition of Angus Video New Report, sponsored by Certified Angus Beef. Learn more at angus.org.
Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at firstname.lastname@example.org.