News Update

Why Cattle Don’t Make the Grade

July 5, 2006

With so many factors lined up to reduce marbling deposition in cattle today, it’s no wonder the beef industry struggles to maintain 55% USDA Choice grade. Acceptance levels in cattle identified for the Certified Angus Beef ® (CAB®) brand languish in the 14% to 15% area.

That’s a problem, because consumers prove every day they will pay more for higher quality beef, says Larry Corah, vice president of Certified Angus Beef LLC. “What could be better profit opportunities for producers often go unheeded,” he says, “due to a series of unfortunate events.”

Most of those factors relate to management and environment rather than cattle genetics, but it may help to recognize all that’s working against beef quality today, Corah says.

Mark McCully, CAB supply development director, says consumers want three main things from beef: tenderness, flavor and juiciness. “All of these add something special, but tenderness does not rule. Consumers want beef primarily because of its unique flavor,” he says.

Meats have been studied for years, so scientists know beef flavor and aroma come from the carbonyl compounds found in marbling. That’s why, as the USDA quality grade increases from Standard to Prime, flavor intensifies and improves, McCully explains.

“The problem is, quality grades are in decline,” Corah says. In 1986, though not all cattle were presented for federal grading, nearly 97% were Choice or Prime. In 2005, that had declined to 60%. The related decline in consumer demand was only reversed by the influence of premium brands and new beef cuts and products in the past eight years, he says.

The reversal of fortunes brought by high-quality brands helped support record-high beef prices, Corah notes. “Despite the all-time high average price for beef, consumers paid still more for a better flavor profile.”

That showed first in the dramatic spread between Choice and Select wholesale beef values. In the early 1980s, it was typically $3 to $4 per hundredweight (cwt.), but increased to $7 per cwt. in the 1990s, and averaged near $10 per cwt. for 2004-2005. The added CAB premium over Choice typically ranges from $6 per cwt. to $10 per cwt., Corah says.

Nearly half of finished cattle are sold on value-based grids that reflect these premiums, according to Cattle-Fax, which projects the grid share to hit 70% of the market. As more cattle are sold on grids, the economic importance of quality grade grows. Today, the spread between a Select and CAB qualifying carcass of the same weight is $150 to $200.

Obviously there are market incentives to produce high quality. So, why the downward trend? The growing complexity of the beef industry distorts market signals and creates management challenges, Corah and McCully say.

Beef quality grade is determined by the amount of marbling — the flecks of intramuscular fat that give beef its flavor and juiciness. Government graders call any of 10 marbling scores in increments of 10, such as Small 80, Small 90, then Modest 0, Modest 10 and so on — essentially a 1,000-point scale. Just a thousandth of this scale can mean the difference between Choice and Select, or CAB and Choice.

Moreover, a 2004 CAB packer study showed 12% of graded cattle had marbling scores that only ranged 2% on either side of the Choice-Select line. Cattle feeders often miss another chance to navigate the grading line when they market cattle without accurate sorting for backfat thickness. “That means millions of cattle could earn a premium, or drop out of that bonus circle with only minor changes in management, nutrition, health or genetics,” McCully says.

Feedlot cattle health problems have been on the rise nationwide, due in part to younger calves on feed. What’s in the bunk could be another problem. The ethanol industry now uses one-sixth of the nation’s corn crop, and its byproducts are finding their way into more feedlot rations. Neither those feeds nor the steam-flaked grains popular at large feedlots are known for enhancing quality grade, Corah says.

Marbling begins early in a calf’s life, so creep feeding, weaning, delayed implanting and proactive health management all contribute to the subsequent quality grade and level of CAB acceptance, he adds.

Corah and McCully’s summary, “Declining Quality Grades: A Review of Factors Reducing Marbling Deposition in Beef Cattle,” is available through the authors at (785) 539-0123, or (330) 345-2333, or on the Web at www.cabpartners.com/news/research/declining_quality_grades.pdf.

— release provided by Certified Angus Beef