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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”– At least 51% black hide OR– AngusSource® tagged
In 2011, approximately 63.5% of all fed cattle met this specification.
Imitation- The most sincere form of flattery?
• As of May 2012:– 132- USDA Certified Programs – 96- 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; < 1000 lb HCW; <1.0 in BF
• Desirable appearance and plate presentation– Moderately thick or thicker muscling characteristics– Practically devoid of internal hemorrhages– No dark cutting characteristics
10 Carcass Specification
s
CAB® Brand Supply Chain
Carcasses Certified for the Certified Angus Beef® Brand
'95'96'97'98'99'00'01'02'03'04'05'06'07 08 09 10 110
0.5
1
1.5
2
2.5
3
3.5
4
Fiscal Year
Mill
ion
Hea
d
>65,000 hd/wk
19781980
19821984
19861988
19901992
19941996
19982000
20022004
20062008
20100
100200300400500600700800900 807 M
Annual Sales of the Certified Angus Beef ® Brand
Fiscal Year
Mill
ion
Poun
ds
$100
$110
$120
$130
$140
$150
$160
$170
$180
$190
$200
CA
B®
Cu
tou
t V
alu
e ($
/cw
t)
Pounds Sold (millions)
2001-02
2003-06
2007-09
Certified Angus Beef ® Brand Demand
Source: Urner Barry and CAB LLC
2011
2010
Defining High Quality Beef
Slight00Small0
0Modest
00Moderate
00 Slightly Abundant00
Market Signals for Quality
Slight00Small0
0Modest
00Moderate
00 Slightly Abundant00
Base +$$$$+$$+$$-$$$
1/5/
091/
29/0
92/
22/0
93/
18/0
94/
11/0
95/
5/09
5/29
/09
6/22
/09
7/16
/09
8/9/
099/
2/09
9/26
/09
10/2
0/09
11/1
3/09
12/7
/09
12/3
1/09
1/24
/10
2/17
/10
3/13
/10
4/6/
104/
30/1
05/
24/1
06/
17/1
07/
11/1
08/
4/10
8/28
/10
9/21
/10
10/1
5/10
11/8
/10
12/2
/10
12/2
6/10
1/19
/11
2/12
/11
3/8/
114/
1/11
4/25
/11
5/19
/11
6/12
/11
7/6/
117/
30/1
18/
23/1
19/
16/1
110
/10/
1111
/3/1
1
-40.00
-30.00
-20.00
-10.00
0.00
10.00
20.00
30.00
Premiums and Discounts Related to Marbling
Prime PremiumCAB® PremiumSelect DiscountStandard Discount
$/cw
t
Source: USDA LM_CT 169
=$160 =$450
Source: USDA
Trends in Quality Grading
Source: USDA
Why the improvement?
• Increased Angus genetics and improved genetics for marbling
• Camera grading implementation• More heifers being harvested• Overall better management focus on quality grade
– Nutrition– Health– Handling
CAB® Best Practices Manuals
How does a cattleman market through the CAB® brand?
• Use registered Angus bulls with superior marbling• 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 Certified Angus Beef®
brand…
Please visit:www.CABpartners.com