The beef topic of the year was already the decline in cow numbers, when it would end and what it all means. Then came the tragic October blizzard, with hardship and losses in western South Dakota that are beyond the scope of any quick analysis. On the national scale, it compounds the likelihood that USDA’s reported January 1beef cow herd will number fewer than 29 million—unthinkable just five years ago.
A key manifestation is seen in the trade news that did not go on furlough, and most recently in the government’s delayed October Cattle on Feed Report. The industry must find ways to cope with the historic reduction in placements on feed. Compared to previous year, inventories on feed have fallen each month for more than a year.
Did you know that, in spite of cattle number declines, the Certified Angus Beef ® (CAB®) brand grew by 54 million pounds this past fiscal year ending September 30? How did that happen and, an even better question, how can it continue? The answers have implications not only to CAB, but to all premium beef brands that make consumers glad they invested in every beef purchase.
Step one, when total numbers are down, we must have a higher percentage of black-hided Angus-type cattle in the mix, and a higher percentage meeting the brand’s specifications. Both happened.
Next, sell as much of each carcass as possible under the premium brand name, to add value for the producer while generating more pounds to sell. Into the future, expanding our “carcass utilization” continues to offer great opportunities. This past year, CAB utilized an average 252 lb. per carcass of denuded, boneless product—yet some of our packing partners exceeded 300 lb./carcass. Just moving up to a 275-lb. average will create 70 million more pounds to sell if cattle supplies hold steady, and hitting 300 lb. would create 175 million additional pounds.
In other words, despite declining cattle numbers, premium brands that generate pull-through market demand can keep providing more of the great beef-eating experiences that can turn the trend lines back up.
Source: Certified Angus Beef LLC
