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Breakaway Demand

Demand up for a premium beef brand.

The 2016 cattle market has disappointed many sellers, especially those only focused on more pounds or efficiency.

Quality has played an increasingly key role since the Great Recession in 2008, and it promises the most stability going forward says CattleFax Analyst Lance Zimmerman. Six years ago, as a graduate student at Kansas State University, he and economist Ted Schroeder created a demand model that stretched back to 2002.

Updated with 2015 beef sales data, the model shows a third year of modest growth for Choice demand and the strongest growth to date for the Certified Angus Beef® (CAB®) brand. The 927 million pounds (lb.) licensees sold worldwide in 2015 was a 5.7% increase in the face of record-high prices. Read more.

Beef as a consumer-driven food business:

Changing Perspectives from Cattle to Food Production

For most beef cattle producers, “reality” is composed of what’s happening on and near their own farms and ranches. Reality is something different for a great majority of consumers. They see things from different perspectives. Cattle producers need to become more in tune with how consumers view beef and the ways it is produced. That’s reality.

John Stika, president of Certified Angus Beef LLC (CAB), shared that message with the audience gathered in Manhattan, Kan., for the 2016 Beef Improvement Federation (BIF) Annual Meeting and Symposium. The conference’s opening general session focused on opportunities for beef industry participants to become more efficient and more profitable. With that in mind, Stika stressed the fact that the only source of new money for the beef industry comes from beef-buying consumers. Read more.

What Do Consumers Value?

Beef shoppers value quality, service above price.

Price is important in nearly every buying decision. However, when it comes to groceries, a new study shows consumers place more value on quality and service than price alone. The doctoral research by Ken Wicker through Capella University’s School of Business is titled, “A study of customer value and loyalty in the supermarket industry.”

Wicker, vice president for a southeastern U.S. supermarket chain, surveyed shoppers in Atlanta, Ga., with a demographic scaled to provide results applicable nationwide. Using decision factors of price, quality, service, convenience, store atmosphere and store brands, the research revealed new insights on customer loyalty and perception of value. Read more.

Dairy Influence on Beef Markets

Dairy animals contribute a significant portion of total animal slaughter
and beef supply.

Beef is a byproduct of the dairy industry and rarely has a major influence on dairy industry production decisions. However, dairy animals contribute a significant portion of total animal slaughter and beef supply. The impact of dairy on beef markets varies over time depending on long-term trends and short-term market conditions in both beef and dairy markets. This article summarizes the dairy industry’s impact on beef production in the 20 years since 1996.

The dairy cow herd has been relatively stable during the last 20 years, varying less than 4% from 9.0 million to 9.3 million head. By contrast, the beef cow herd has varied by more than 18% from 29.0 million to 34.5 million head during the same period. Dairy cows as a percent of all cows have averaged 22.3%, but have been at a record high of 24% in 2014 and 2015 as a result of low beef cow inventories. Read more.

Ginette Gottswiller

The Source

How do I sell my calves for what they are worth?

Think about how you make buying decisions. Let’s use your pickup as an example. Do you study Consumer Reports, obtain a CarFax information report or read the Kelly Blue Book? There is as much or as little information as you want to obtain on your potential purchase.

Tight margins make us better managers because we study the numbers more closely. During the past few months, profit margins at the feedlot seem to be in the headlines often.

You sell your calves one time a year; marketing strategies are year-round.

How do you sell your calves for what they are worth? Read more.

Compromised Cows

Benchmark study looks at magnitude of cull-cow disposal issues.

The beef industry is in the market to sell cattle, but what happens to old or injured cows? Treatment of cull cows can help or hurt the industry simply by how it impacts consumer confidence.

There is very little research done on compromised cows, so Karen Schwartzkopf-Genswein, researcher at the Lethbridge Research and Development Centre for Agriculture and Agri-Food Canada, shared her ongoing research on the incidence, characterization and disposal of compromised cattle arriving at auctions and processing plants. She spoke to attendees of the fifth International Symposium on Beef Cattle Welfare in Manhattan, Kan., June 8-10. Read more.

In the Cattle Markets

Ag economist shares outlook for the future of North America’s
beef industry.

I had the pleasure last week to provide a joint talk with Ted Schroeder at the 2016 Beef Improvement Federation (BIF) Annual Meeting and Symposium. Our presentation sketched a broad vision of how the integrated U.S. and Canadian beef industry may look in 20 years. To set the stage for our assessment, we outlined comparative advantages in major global beef producers.

The key comparative advantages currently enjoyed by North America’s integrated industry include a strong trust and premium being placed on its grain-finished beef. The presence of sound and effective infrastructure spanning from physical assets like transportation networks and sophisticated processing facilities to intellectual expertise on issues including genetics and meat quality, along with legal property rights supporting investment, are additional global strengths. Read more.

Angus Calendar

To view the Angus Calendar, a complete list of Angus sales, click here.