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A Supply Chain Approach
to Beef Quality

by Laura Nelson for Certified Angus Beef LLC and Angus Productions Inc.

DENVER, Colo. (Feb. 2, 2011) — Managing for beef quality isn’t an arbitrary end-product objective, panelists pointed out at a Cattlemen’s College session Feb. 2. According to moderator Larry Corah, vice president of Certified Angus Beef LLC (CAB), it also means managing for more profit. “Managing for Quality: A supply chain approach” was presented at the Cattle Industry Convention annual educational event Feb. 2 in Denver, Colo.

“Quality sells in this industry,” Corah said. “We talk a lot about pounds, but we also sell by dollar figures. A quality carcass puts more dollars in those pounds.” He led the cattle industry veterans in discussing every aspect of quality beef production, including genetics, health, nutrition, ranch management and marketing.

A solid foundation is a good place to start differentiating value in beef cattle, said Aaron Arnett, Select Sires beef genetics division vice president. “To maximize quality and dollars returned, we have to focus on genetics.”

Carcass characteristics make an easy target for adding value because they are so highly heritable, Arnett added. “Does it take more groceries to create marbling? Absolutely not, if you start with animals that are able to express their genetic potential.”

After genetics are selected, every health issue an animal encounters has the probability to affect its end performance, said Gerald Stokka, Pfizer Animal Health senior veterinarian. He shared the importance of the passive transfer of good health from a mother cow to her calf.

“Everything you do at the ranch is preparing that animal for the next stage,” he said, indicating performance in the feeding phase and after harvest. But it starts long before the calf is born.

“The most intriguing area of research today is fetal programming,” he said. “We know that what a cow eats and feels [while pregnant] will affect the calf.”

Cattleman Ken Grecian, Palco, Kan., said a lot of the cow and subsequent calf performance in his herd is based in nutrition as well.

“It doesn’t take much protein to make a lot of difference in how a cow performs,” he said. Nutrition affects body condition score (BCS), which affects breeding rates, successful pregnancies and, yes, fetal programming.

“If a cow is not in condition, she’s a cull on our place,” Grecian said. That focus has made an impact on his herd and his bottom line. A little more than a decade ago, he sold his first set of calves on a U.S. Premium Beef (USPB) grid and learned a lot.

“Mostly, I learned that my calves weren’t near as good as I thought they were,” he shared with a chuckle. The top 61% graded USDA Choice, leaving the rest in the Select category.

Since then, a focus on expected progeny differences (EPDs) in a straightbred Angus herd has made some great improvements. Now, 91% of his calves grade Choice or higher, with 55% meeting Certified Angus Beef ® (CAB®) brand requirements.

But just as important, he said, “We did that without losing any weight on those calves. We maintained pounds production throughout those changes.” Last year, Grecian said his calves fetched an average $77 per head premium over commodity prices.

That’s the kind of production and marketing model cattle feeder Jerry Bohn encouraged the audience to consider, too. The general manager of Pratt (Kan.) Feeders encourages and pushes customers toward selling their calves weaned and preconditioned, vaccinated at the least.

 

“We’re looking for cattle with a story,” he said, explaining the importance of keeping detailed management records as a selling point. “With today’s feed costs, we need cattle that will finish quickly and economically. Then the key to making money on these grids is to reduce discounts.”

 

High-quality carcass characteristics coincide with higher profitability. Bohn shared data on 650,000 cattle in the 2010 USPB database. Of those, the groups with less than 5% CAB acceptance rates made $17.26 per head over market value on that company’s grid. Groups with 25%-30% CAB made $39.85 per head, while those with 55% CAB or higher saw average premiums of $69.40 per head.

 

To hit those targets, cattlemen must focus on all the production factors discussed on the panel, Bohn said. “We must narrow the genetic pool to reduce variation in our cow herd. We’re always looking to buy better cattle.

 

“After all,” Bohn continued, “we’re in the business to provide a quality eating experience to consumers 100% of the time. We’re not there yet.”