Rewards for Quality
Consumers will pay for quality beef, and many tools are available to produce quality.
by Kasey Brown, associate editor
STAUNTON, Va. (Oct. 15, 2013) — “Adding value beyond just pounds is a challenge, but improving the quality grade sure can help achieve the goal of providing a quality eating experience for consumers,” Larry Corah, vice president of supply development for Certified Angus Beef LLC (CAB), told attendees of the 2013 Applied Reproductive Strategies in Beef Cattle (ARSBC) Symposium in Staunton, Va., Oct. 15-16.
For cattlemen to get a premium, the consumer has to be willing to pay for the product they produce, said Larry Corah, vice president of supply development for Certified Angus Beef LLC. Consumers are paying for high-quality beef because it provides a positive eating experience.
Beef prices are drastically higher than those of competing proteins, he said, so the beef industry must respond with quality. Since 2002, demand for the Certified Angus Beef® (CAB®) brand and upper Choice has increased 79%, while demand for commodity Choice has increased 3%.
The reason, Corah said, is greater consumer satisfaction with the higher-quality product. He explained that 98%-99% of consumers are satisfied when eating USDA Prime beef, 82%-88% are satisfied when eating CAB and upper-Choice-grade beef, 62% are satisfied when eating low-Choice beef, and only 29% are satisfied when eating Select.
Demand for premium-Choice and Prime is transforming the marketplace, Corah said, emphasizing that artificial insemination (AI) technology helps cattlemen reach the higher quality levels that are in demand.
Corah highlighted three major changes to selling beef: (1) new cuts like the flat-iron and teres major, (2) the shift in quality sold at retail and (3) premium grinds used in restaurants. All have increased beef sales. Consumers like beef, but they like high-quality beef.
To those who question whether they will be paid for raising the high-quality target, Corah provided an example of premiums paid by a national program used by many producers in the area. For the top 25% of cattle, premiums in dollars per head have increased from $26.39 in 1998 to $117.94 in 2013.
“There are dollars out there for high-quality cattle. You just have to work to get them,” noted Corah. AI helps you produce those top-tier cattle, he asserted.
He offered four key ingedients to producing higher-quality cattle: (1) genetics/DNA, (2) health, (3) nutrition and (4) reproduction.
“Genetics is the best growth technology out there. It works, and it is consumer friendly. Consumers can get behind genetic progress,” he said.
Early-born calves tend to grade better, and using timed-AI technology helps produce those early-born calves.
Corah spoke during Tuesday's ARSBC session focused on how different segments of the industry profit from AI. For more information, visit the Newsroom at www.appliedreprostrategies.com to listen to his presentation and to view his PowerPoint slides and proceedings paper.
Comprehensive coverage of the symposium is available online at www.appliedreprostrategies.com. Compiled by the Angus Journal editorial team, the site is made possible through sponsorship by the Beef Reproduction Task Force.