What’s in a Number?
$6.93 … What’s that number mean to you?
Numbers are everywhere. They matter to a rancher, so they matter to the Certified Angus Beef® (CAB®) brand. A natural progression, CAB’s Black Ink team set out to uncover stories behind both common and irregular numbers that affect a cattleman’s future. From 120 million to -2.26, each one tells a story of how even the seemingly random and only slightly related are intertwined to impact profitability.
Every number has a story — take, for example, $6.93.
The short story is that $6.93 per hundredweight (cwt.) is the combined steer and heifer premium for 500-lb. calves of known Angus genetics over all other breeds of similar size and condition. Auction markets across the country submitted data for the biennial survey called “Here’s the Premium,” last conducted about 18 months ago.
Here’s the back story: For years, Angus producers would ask the early CAB staff, “Where’s my premium?” They were raising good commercial cattle, using Angus genetics and yet, as far as they could see, the only one getting paid for all of that was the packer or maybe the cattle feeder.
Of course, the packer grid is the only place cattlemen will see a direct CAB brand premium listed as a line item, but it doesn’t mean those selling at weaning are being shortchanged.
In 1999, CAB’s Steve Suther set out to put a number to what he already knew was happening: Cattle buyers were paying more for animals they thought would earn more at harvest.
The first report showed a $1.25-per-cwt. advantage. That was back when 50% of the U.S. beef herd reported Angus influence. Today, that number is closer to 75%, but demand more than kept up with the growing supply.
“We might question branding or some other program sustaining a premium over time,” says ag economist Lee Schulz of Iowa State University. “If it’s garnering a premium today, will it last or disappear when there are more of those calves available? These numbers show it lasts.
“A lot has to do with producer-buyers understanding what’s embodied in those cattle, and that had to start with the end user, the beef buyer, filtered all the way back to the farm and ranch,” he says. “That has just continued to grow as we’ve maintained the trend for stronger Angus premiums over non-Angus calves.”
It’s pull-through demand at its finest.
Editor’s Note: Laura Conaway is a producer communications specialist for CAB.