Sign of the Times
CAB Prime sales grow.
Certified Angus Beef® (CAB®) brand sales growth continues to become more challenging as we’ve just posted our 13th straight record sales volume in FY 2019. Supply of qualified traditional CAB carcasses will need to gain traction in the coming months for the string to remain unbroken.
Another factor in sales gains lies hidden to most in the category of CAB Prime.
Carcasses of Angus-type cattle that meet all 10 brand specifications and have the extra marbling to achieve the Prime quality grade are becoming a hot item. For the past four years, Certified Angus Beef brand Prime product sales have grown 30% on average. In the past year, 25% of the brand’s growth was due to increased sales in Prime branded product.
The beef industry’s decade-plus movement toward higher marbling achievement across the fed-cattle supply is credited with creating the supply. As licensed end-users observed a more reliable, larger pool of carcasses in the CAB Prime category, many have “traded up” to this most-preferred quality of beef. In fact the retail sector saw a 90% sales increase in this category last year.
The USDA Premiums and Discounts report the week of Nov. 20 shows a Prime premium that, when calculated on top of the Choice premium, equates to $211 per head over the weighted average market value. This is the premium to the cattle feeder, not just the carcass cutout value the packer receives. End-users are differentiating themselves by upgrading their meatcases to the finest in beef. Cattlemen that meet this demand with the proper genetic input and management are already ahead of the curve with closeouts that break the traditional breakeven calculations.
Editor’s note: Paul Dykstra is a beef cattle specialist with CAB. Read more of Dykstra’s biweekly comments in the CAB Insider at http://bit.ly/CABInsider1120.
