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Majority Of Beef’s Lost Dollars Due To Quality Grade Deficiencies

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The beef industry is out of pocket by $43.66/head in lost opportunities, the National Beef Quality Audit says.

Beef packers have spent years finding ways to add value to a carcass. Given the volume of cattle they handle, an extra 1¢/lb. can add up to millions of new dollars captured. Producers have also focused on adding value to calves and fed cattle. Yet there’s still more to be captured, according to the 2011 National Beef Quality Audit.

The beef industry is out of pocket by $43.66/head in lost opportunities, the audit says. That’s the amount lost due to nonconformance with ideal targets for carcass quality. More than half the loss is due to quality grade, with yield grade, carcass weight and offal values accounting for the rest.

The first audit in 1991 identified carcass inconsistency as a barrier to industry progress, with the alarming statistic that one in four steaks was unacceptable. Carcass inconsistency still remains a barrier, reports the 2011 audit.

BEEF Video: 2011 National Beef Quality Audit Take-Home Messages

While it appears cattle sorting is being done efficiently in feedyards, beef carcasses that are nonconforming and inefficient still exist. For example, more than 25% of the ribeyes studied in the audit were outside the 12-16-in. range, creating inconsistencies that cause issues down the beef chain. Another area for improvement identified by audit researchers was producing cattle and products with an ideal lean-to-fat ratio, with appropriate quality and yield grade.

These points show up in a breakdown of the lost opportunities. Quality grade accounted for $25.25/head, yield grade $5.77, carcass weight $6.75, and offal $5.15. Hide/branding accounted for 74¢.

The audit found that 36.4% of fed beef carcasses fell in the 800-900-lb. weight group. The other distribution included: 29.8% in the 700-800-lb. group; 18.2% in the 900-1,000-lb. group; 10.7% in the 600-700-lb. group; and 3.3% in the 1,000-plus-lb. group.

The audit also tackled the use of beta-agonists. New growth enhancements and production practices have led to tremendous efficiency, it says. However, the industry must conduct a comprehensive assessment of the short- and long-term value of its practices and technologies, matching them with effective communication to consumers. All must have substantial rationale and line up with the needs of both domestic and international consumers.

The audit also exposed differences in what various players in the beef chain regard as the most important quality attributes. Cattle feeders rated how and where cattle were raised as most important, and weight and size as second. In contrast, packers, retailers and others rated food safety and eating satisfaction as the most important attributes. Eating satisfaction was rated only sixth by cattle feeders.

The audit makes clear its position on quality attributes. Eating satisfaction is a key issue not only for consumers but for the cattle and beef industry, it says. Quality initiatives focused on meeting or exceeding customer expectations depend on providing value in two major categories – product integrity and eating satisfaction.

The audit, conducted every five years, is the industry’s most valuable tool as it is the most comprehensive survey of beef quality conformance. But the 2011 audit went much further than previous audits. For example, it collected camera-grading data from 2.4 million carcasses in 17 plants. The data pointed to significant changes by producers from 2005, as individual animal identification increased from 38.7% to 50.6%. The number of cattle grading Choice and Prime increased from 55% to 61%.

This suggests continued improvement in product eating quality, the audit says. The industry has obviously made great strides in selection and management, especially at the feedyard level, to reach carcass targets never before achieved. I certainly hope this progress continues, as the industry will need to keep getting more dollars from fewer cattle. 

Steve Kay is editor and publisher of Cattle Buyers Weekly (www.cattle
buyersweekly.com
). See his weekly market roundup at beefmagazine.com every Friday afternoon.

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Steve Kay is editor and publisher of Cattle Buyers Weekly (www.cattlebuyersweekly.com ) subscription newsletter, the number-one marketing and business newsletter for the meat and livestock...

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