Note to Youth: Start with End in Mind
When consumers pay more for a high-quality product, they expect
a high-quality eating experience, as well.
Mark McCully
The ultimate goal for any cow-calf operation is to supply beef to the market. Consumers drive that market, and they’re signaling demand for high quality.
Mark McCully, vice president of production for the Certified Angus Beef® (CAB®) brand, talked about consumers and production systems at the National Block & Bridle Convention in Lubbock, Texas, earlier this month.
“As beef prices have increased and consumers pay more for our product, their expectations are going with that,” McCully said. “So, we really have to deliver. There’s more pressure than ever to deliver a great eating experience, and remember why consumers are buying beef.”
Even with the rise in costs, consumers are still purchasing beef as long as they’re satisfied with the meals, he explained.
“We’re not the cheapest protein out there, and when we spend a lot of money on a product or premium brand, we have a higher expectation level of how that product will perform,” McCully said.
There are great opportunities for cattle producers, but the challenge is to think about the cow-calf business in a different way, thinking of what consumers want first, the CAB officer said.
“Our traditional way of thinking is we start at the ranch and think about the mother cow only, but when we look at the growth in the high-quality beef sector, the opportunities out there for a young person getting back into this industry are great,” McCully said.
“I would suggest that, in addition to your focus on great cows, look beyond the commodity business to where there’s value added and where there is a growth in demand,” he said. “That’s clearly in the high-quality side of the beef market.”
To keep up with that growing demand, he said producers may take advantage of the tools and technology available at the ranch for genetic selection. Value-based marketing systems with targets like CAB incentivize producers to raise the best.
“Cattle that meet CAB specifications are simply worth more,” he said. “The increased value is translated into our feeding industry. Better genetics that can hit those targets on a consistent basis, they’re worth more, and feeders are willing to pay those dollars to the cow-calf producer.”
The shift to higher quality has changed the supply of premium vs. commodity feeder cattle. Most cattle are sold on a value-based marketing system today, and that has changed market dynamics, McCully said. Feeders and packers want more superior cattle and fewer commodity calves.
“Sometimes folks think the premium market is a really small, tiny, niche, but today, Certified Angus Beef makes up more than 15% of the fed cattle coming through our feedlots and packing plants, and that has just continued to grow,” he said. “We don’t see that growth slowing anytime soon.”
McCully emphasized the opportunities for young professionals entering the beef cattle business are at an all-time high, but it’s an important reminder that we have to meet consumer expectations first.
Editor’s Note: Katy Kemp is an industry information intern for Certified Angus Beef LLC.