CAB and The High Quality Beef Market

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CAB® and the High Quality
Beef Market
Certified Angus Beef LLC
Outline
• Overview of the Certified Angus Beef®
brand and defining “high quality”
• Production trends in high quality beef
• Best practices for targeting a high quality
beef market
Certified Angus Beef LLC
• Not-for-profit subsidiary of the American Angus
Association
• Specifications evaluated by third party
(USDA/CBGA)
• Never own cattle or product – only the brand
• Licensing allows brand use to partnering
companies
• Sole revenue generated through commissions
applied to the brand sales of licensed packers
and value-added processors
STEP 1 to become CAB®
Live animal specification
• Must be “Angus-type”
– Predominantly (>51%) black
hide
In 2014, approximately 62% of all
fed cattle met this specification. NO grid
premiums are paid for being “Angus-type”.
Imitation- The most sincere
form of flattery?
• For 2014:
– 165- USDA Certified Programs
– 123- Have “Angus” in their name
• These range in quality from Prime to cull cows
• Certified Angus Beef® brand is still the
only program owned and operated by
the members of the American Angus
Association
• All “Angus beef” is not created equal
STEP 2 to become CAB®
Ten Carcass Specifications
• Superior flavor, juiciness and tenderness
– Modest or higher degree of marbling (most critical spec
for eating quality and the hardest to hit for cattle
producers)
– Medium or fine marbling texture
– “A” maturity
– No hump on the neck exceeding 2-inch height
• Consistent sizing
– 10-16 in2 REA; 1050 lb or less HCW; <1.0 in BF
{Presenter’s note: HCW spec moved to 1050 lbs in
November, 2014}
• Desirable appearance and plate presentation
– Moderately thick or thicker muscling characteristics
– Practically devoid of internal hemorrhages
– No dark cutting characteristics
ADD
Enterprises
CAB® Brand Supply Chain
10 Carcass
Specifications
CAB® Acceptance Rates and
Certified Head Count
25%
6
Certified Hd
5
Acceptance Rate
CAB %
20%
4
15%
3
10%
2
5%
1
0%
0
Fiscal Year
*Projected
On average, 68,000 head/week are accepted into the CAB® brand.
Head Certified (millions)
30%
Annual Sales of the CAB® Brand
1000
900
800
700
600
500
400
300
200
100
0
Fiscal Year
2014
2011
2008
2005
2002
1999
1996
1993
1990
1987
1984
1981
1978
Million Pounds
882
CAB® Demand
2014
CAB® Cutout Value ($/cwt)*
$225
2012
$200
2011
$175
2007 2008
2006
2004
2009
$150
2005 2003
2010
2002
$125
2001
$100
CAB® Pounds Sold (millions)
*Source: Urner Barry
2013
Defining High Quality Beef
Slight00
Small00
Modest00
Moderate00
Slightly Abundant00
Market Signals for Quality
-$$$
Slight00
Base
Small00
+$$
Modest00
+$$
Moderate00
+$$$$
Slightly Abundant00
39818
39867
39916
39965
40014
40063
40112
40161
40210
40259
40308
40357
40406
40455
40504
40553
2/28/11
4/18/11
40700
40749
40798
10/31/11
40896
40945
40994
41043
41092
41141
41190
41239
41288
41337
41386
41435
41484
41533
41582
41631
41680
41729
41778
41827
41876
41925
41974
$/cwt
30.00
Grid Premiums and Discounts
20.00
10.00
0.00
=$195
-30.00
Source: USDA
Source: USDA LM_CT 169
=$340
-10.00
-20.00
Prime Premium
CAB® Premium
Select Discount
Standard Discount
-40.00
CAB® Grid Premiums Paid By Packers - Annual Dollars
$60
$50
Million $
$40
$30
$20
$10
$0
Source: Certified Angus Beef
Year
Quality Grade Trend by Region
80%
% Choice & Prime
75%
Nebraska
70%
U.S.
65%
Kansas
60%
55%
Texas
50%
45%
40%
35%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year
Resources Available from CAB
How do cattlemen participate
and market through the CAB® brand?
• Include marbling in genetic selection decisions
– Registered Angus bulls
– Utilize GeneMax™
• Incorporate a health and nutrition program
that protects marbling potential
• Market calves in a way that captures value
–
–
–
–
Pool calves with other producers
Build a relationship with a feedlot
Retained ownership through feedlot
Sell fed cattle on a grid
For more info on the
Certified Angus Beef ® brand…
Please visit:
www.CABpartners.com
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