Beef Producers Could Learn From Chicken Farmers, MU Economist Will Tell Cattlemen
by Duane Daily, senior writer, MU Cooperative Media Group
COLUMBIA, Mo. (Aug. 3, 2011) — In two decades, poultry producers increased consumer consumption of chicken by 40 pounds (lb.) per capita. In the same era, 1980 to 2001, beef consumption slipped slowly away.
“It’s difficult to determine why consumers change,” says Scott Brown, meat economist at the University of Missouri (MU). “But one thing is clear: Chicken producers were providing what consumers wanted.”
Brown believes beef producers can take a page from the poultry playbook and boost beef demand.
“There has been much research into why demand for beef weakened,” Brown says. “Basically, consumers say they prefer tender, flavorful beef — every time. That’s not what they were getting.”
Brown believes beef producers can compete at the meat case by changing breeding, management and marketing.
On Aug. 31, Brown will talk on “Domestic and Global Opportunities of Beef Producers Who Raise High-Quality Cattle.” He will be on the MU Beef Team at the two-day Applied Reproductive Strategies in Beef Cattle (ARSBC) Symposium in Joplin, Mo.
The chicken rise and beef decline came at a time when poultry producers could quickly change their flocks. At the time, beef producers did not have tools to reach the genetic potential of beef cattle.
In the era of rising poultry demand, consumers were looking for a healthy product in the meat case. Beef found it difficult to compete, Brown says.
Then consumer desires changed. “The Atkins diet and strong growth in midlevel restaurants drove beef demand higher.”
Now, the recession changed consumer demand again. With less money in their pockets, consumers downsized from steaks to hamburger.
However, in a surprise for meat marketers, consumers started buying, and paying more, for Choice- and Prime-grade steaks. Mainly, these were not eaten at white-tablecloth restaurants but grilled at home.
“From this point forward, there seems to be a role for high-quality beef,” Brown says. “This can increase overall demand for beef.”
That change in demand rides on producing the tenderness and flavor of high-quality cuts, Brown adds.
This upscaling occurs in domestic markets, but especially in the export trade. A growing beef trade to Japan and South Korea shows the way.
“Both of these markets tend to import high-quality beef products,” Brown says. “It appears further recovery is in sight.
“Demand strength for beef depends on the levels of both consumption and price,” he says. “Looking at consumer buying in the recession shows that in certain sectors, demand deterioration for higher-priced products did not occur.”
Brown researched databases on sales of Certified Angus Beef® (CAB®) brand product. “Despite the economic downturn, CAB products experienced expansion.” They sell upper Choice- and Prime-grade meat.
“The potential for marketing premium product is vast,” Brown says. “However, it will require coordination and commitment that have been elusive in the cattle industry.”
Shifting to meet consumer demand has been illustrated by the chicken industry over a long period, Brown says.
Studies of the beef marketing show that the higher the quality of the beef, the larger the premium increases.
“The market already rewards producers of Prime beef with grid premiums,” Brown adds. “As the economy recovers, producers supplying high-quality beef will be the biggest winners in this new demand environment.”
The signal for more premium beef comes at a time of giant advances in beef breeding protocols using superior genetics through fixed-time artificial insemination.
Steers from the MU Thompson Farm fed at an Irsik and Doll feed yard over the past three years have graded 27% USDA Prime. For comparison, less than 4% of U.S. cattle grade Prime, Brown says.
Chicken producers made rapid changes in genetics to meet demand. Now, beef producers have tools to speed the genetic progress in their herds.
Brown cautioned that there is much more than artificial insemination involved. The whole management package includes health, nutrition, genetics and more.
“The Missouri Recipe” will be featured the first day of the ARSBC Symposium, Aug. 31-Sept. 1. Details are available online at www.appliedreprostrategies.com. Compiled by Angus Productions Inc. (API; publisher of the Angus Journal and the Angus Beef Bulletin), the site is made possible through sponsorship by the Beef Reproductive Task Force, SEK Genetics, and liveauctions.tv. Coverage will include summaries of the speaker presentation, PowerPoints, proceedings and audio.
Editor's Note: This article was adapted from a news release provided by the MU Cooperative Media Group.