Hitting the target is a hot topic for panel discussions at producer meetings these days. One panelist says Angus is the answer. Another tells you red meat yield is the thing — put a Continental bull on an English cow. The next says to forget the British cow. Yet another insists natural is what consumers crave.
Who's right? All of them. Take a walk down a superstore's grocery aisles and look at the soft drink area. There's a six-pack for every taste and lifestyle. Same in the cereal section. Little wonder consumers expect the same variety in their beef.
So, what do they want? Brad Morgan, Oklahoma State University animal scientist, says their demands fall into a rather complex outline. He labels the first category Foodservice A. These are the restaurants with the $70 to $90/plate prices. Ruth's Chris, Morton's of Chicago.
“They serve 100% Prime,” says Morgan. “The middle meats — the T-bones, ribeyes, tenderloins, prime rib. These restaurants cream the cooler, then cherry pick to get the high-dollar cuts,” he adds.
Then there's a subgroup of upper-end restaurants that serve the upper two-thirds of Choice. These are often local restaurants that can't afford or can't get Prime.
Prime only makes up 1½% of the beef marketed, Morgan points out. Instead, these local favorites rely on brands like Certified Angus Beef® (CAB) and Excel's Sterling Silver to satisfy their customers' tastes. Notably, however, CAB did market 1.3 million lbs. of CAB Prime in 2001.
Allen Brothers of Chicago supplies both types of restaurants and has a thriving mail order business.
“We deal only in the middle meats,” says Scott Marland, director of their catalog division. “The meat is hand selected and hand cut for our customer's specifications.” The primals are also either wet- or dry-aged for 21 to 30 days before Allen Brothers' butchers cut into them.
Next in the outline are family restaurants — the Chili's and Applebee's types. “The products vary a little more,” says Morgan. “Probably low Choice or Select.” He also says the tenderloins, strip loins, sirloins and ribeyes are more than likely marinated and tenderized.
Dan Hale, Texas A & M meats scientist, adds another category subgroup — the all-you-can-eat, buffet-type restaurants.
“If you order a steak, it's usually Choice. But in the buffet lines, they usually serve Select or even lean cow beef,” he explains.
Then there's the ground beef category.
“This is a huge proportion of the meat business — 50% of all beef sales,” says Morgan. The ground beef group varies from Wendy's and McDonald's to gourmet burger shops like Fuddruckers. Part of this beef may come from the smaller, independent packers who typically buy it from the big guys.
The retail sector is another major player and one that is evolving with its customers. Choices abound. In the fresh beef case, there is the self-service section and the full-service area, usually complete with a real, honest-to-goodness person with a white smock and a knife.
In the self-service case, Morgan says the majority of beef is Select. “People discriminate against visible fat,” he explains. “They like to eat beef with marbling, they just don't like to see it.”
Future Beef Operations L.L.C. (FBO) is built on this concept. They have the capacity to harvest 1,600 carcasses/day for their major customer, Safeway. These cattle, preferably a terminal cross from a Continental bull and a British cow, produce a high Select carcass in FBO's production and feeding system.
In the full-service case, you'll see the pricier cuts — once again, likely CAB, Excel Sterling Silver, IBP's Chairman's Reserve, Nolan Ryan's Tender Aged Beef or a house brand. This is where you'll also see the natural lean lines like Laura's Lean, Maverick and B3R.
At the 19 Clemens Family Markets in southeast Pennsylvania, you'll find only CAB and Maverick in the beef cases. “We feel CAB is the best quality product,” says Al Kober, Clemens' director of meats. “Maverick meets a niche. It is leaner, natural and lower in cholesterol.”
Next in the case is the partially prepared beef section. “It is usually Select, stuffed and/or seasoned,” says Morgan. “It may be microwave-ready roast beef or barbecue.
Enough options and/or markets for your cattle? There are more. Think about our neighbors to the north and south, not to mention across the ocean.
“Most people don't understand the magnitude of the export market until something bad happens, like with Japan and bovine spongiform encephalopathy (BSE),” Morgan comments. “The Japanese market accounts for over 50% on a value basis of what we export.” He adds, “Sales are off 50% from this time last year.”
Those outside the U.S. want the same choices as our consumers. “They buy the full gamut — Prime, the upper two-thirds of Choice, Choice and Select,” says Morgan. “The neat thing is a lot of it is the underutilized cuts — the chuck and round. Grade is not an issue. Mexico buys a tremendous amount of these.”
Hale adds that Japan and Taiwan are generally the high-end markets and want the upper end of Choice, while Koreans are more likely to buy Select.
International markets also help move products that are less popular in the states — think bargain basement.
“Variety meats are big sellers in the international market, accounting for nearly a third of all beef exports,” says Lynn Heinze, U.S. Meat Export Federation. “Last year, Japan imported more than 80,000 metric tons of trimmed and deboned tongue, which has little retail value in the U.S.”
All told, the export market accounted for 1,244,223 metric tons of beef in 2000, or $3.6 billion.
So, where do your cattle belong? Morgan says he's not sure producers need to try to figure out exactly where their cattle fit, at least for now. He says to concentrate on doing away with the carcasses that don't work anywhere.
“We'd like to make every carcass a USDA Yield Grade 3.5 or trimmer, high Select or better and eliminate any defects including heavy and light carcasses, Standards and dark cutters,” he says. “Those carcasses don't get merchandized at any of these locations.”
The Need To Know
Whether you're taking exact aim at a market target or the shotgun approach by eliminating outliers, there's still the need to know what your cattle do after they are weaned. Acquiring that information is a whole lot easier than it used to be.
“University feedout trials and commercial programs through breed associations are very helpful tools,” says consultant Sally Dolezal.
Whether a producer chooses one of those programs or opts for an alliance, the Kansas-based geneticist emphasizes, “We have to be aggressive in knowing what our cattle will do.”
If you go the feedout trial route, your state cattlemen's association or Extension service should be able to provide the information you need to enter your cattle. If you use purebred bulls, the breed associations, particularly ones with a branded beef program, can be a helpful starting point.
“Our supply development team works extensively on sire evaluation (progeny testing) and carcass testing through CAB's network of licensed feedlots,” says Mark McCully, director of the CAB packing division. “They can also help a producer by explaining how to use the information.”
If you are in a position to retain ownership on your cattle, feedlots can be a starting point. Texas A & M's Dan Hale recommends, “It is helpful if the feedlot has several different marketing options. Then they can work a producer into a system that supplies carcass data. That is an easy way to get into a program.”
Or, you can find an alliance on your own. Take your pick — Rancher's Renaissance, B3R, Future Beef… the list is a long one.
“Primarily, we track all the feedyard and carcass information on every animal,” says James Henderson, general manager of the Childress, TX-based B3R Meats. “We come up with a composite score and rank the producer's cattle top to bottom. We can show him which of his cattle are giving him a return on investment and which are not.”
With the B3R program, the producer retains ownership of his cattle through the harvest phase.
“To continuously improve, we've got to have the producer involved in the process. If he doesn't have a financial stake in it, he isn't going to be as prone to change it,” Henderson comments.
Darrell Wilkes, Future Beef Operations L.L.C. (FBO) vice president for supply, says, “We collect individual performance data on all cattle, as well as individual carcass data — hot carcass weight, ribeye area and quality grade. We compile a consulting report. We go through that with the producer.”
FBO will purchase feeder cattle outright or partner on the cattle. Or, the producer can retain ownership through the harvest phase.
Whichever alliance a producer chooses, Al Kober, director of meats at Clemens Markets, urges participation. “The key is developing a close working relationship with the whole meat chain,” says the Pennsylvania retailer.
He continues, “The more we can integrate and get to know who we are selling to, the more quality and consistency we can get.
“The real focus of every segment should be the consumer. Everything you do is going to impact the outcome,” Kober emphasizes.