News Update
Oct. 29, 2010

Cattle Prices to Stay Strong, But Keep a Watchful Eye on Corn

A Texas AgriLife Extension Service livestock economist has forecasted continued strength in cattle prices heading into 2011, but has warned to keep a watchful eye on the corn supply.

David Anderson said at the recent Brock Faulkner Cattleman’s Clinic/Doug Davidson Hay Show in Bryan that cattle numbers will be fewer over the next decade, but the price of corn will dictate the level and spread in calf prices.

“I think we will continue seeing beef production and cattle numbers drop off in the next couple of years,” Anderson said. “We are forecast to produce 25.4 billion pounds (lb.) of beef in 2011 versus 25.9 billion pounds in 2010. That will lead to increases in price, but it also depends on corn prices and (their effect on) calf prices.”

With the nation’s corn supply receiving more attention in recent weeks as a result of declining harvest yield estimates, Anderson said he has backed off somewhat on his price outlook for the calf market heading into 2011.

Anderson said producers can expect to see higher calf prices next year, but not as high as he first estimated earlier this year. His 2011 forecast has 600-lb. calves priced at $104 to $112 per hundredweight (cwt.) and 700-800-lb. calves priced at $99-$105 per cwt.

The first quarter of 2010 resulted in the least amount of beef supplies, net of beef exports, since 1997, and each quarter through 2012 will continue to decline, Anderson said. Overall, beef demand has been hurt by the recession, but has been strong due to consumers “trading down” to stretch their income. That’s led to more grinding of specific cuts of beef — chucks and rounds — to “take advantage of the hamburger demand.”

Cull cattle have also been fetching premium prices — a result of the demand for ground beef.

The export markets also continue to show strength with Vietnam emerging as a top customer for U.S. beef exports.

“What I’m suggesting is that booming exports tighten domestic beef supplies even more and should lead to higher cattle prices for the next couple of years,” Anderson said. “Supplies keep cutting back because we’re not making enough money to build herds back.”

The last few years have been one of transition for the cattle industry, Anderson said, as beef cattle numbers are at the lowest since the 1950s. However, pounds of beef produced per cow are much higher compared to that period as a result of feeding, improved breeding, and overall technology and science.

“We’re not using the same type of cattle we were using in the 1950s,” Anderson said.

With higher corn prices, one of the important things to do in the current calf market, is to put purchased calves on grass to cut down on the amount of costs to add pounds, Anderson said.

“Putting them on grass becomes cheaper when you look at the cost of corn,” he said. “The price spread, or slide, becomes compressed as corn prices move higher. The hardest hit are often the lightweight heifers since it takes more feed to put gain on them.”

Overall, there are fewer replacement heifers being held back, Anderson said.

“We’re also slaughtering more cows as a percent of the herd than in a decade,” he said. “We’re going to have fewer cows in 2011-2012, but also higher prices.”

— Release by Texas AgriLife Extension Service.

Ohio State University To Hold Second Annual Animal Welfare Symposium

The second annual Ohio State University (OSU) Animal Welfare Symposium is set for Nov. 30 at the Nationwide and Ohio Farm Bureau 4-H Center on Fred Taylor Drive in Columbus.

The symposium is a joint venture between the College of Veterinary Medicine’s Department of Veterinary Preventive Medicine and the College of Food, Agricultural, and Environmental Sciences’ Department of Animal Sciences.

This year’s keynote speaker is Temple Grandin of Colorado State University. Grandin is internationally renowned for her work in animal welfare, particularly in regards to improving livestock and poultry handling practices. She will be addressing many key areas of humane handling of livestock on the farm that have been heavily scrutinized and criticized recently, especially in Ohio.

In addition, speakers who are equally well known for their work in animal welfare will be covering topics pertinent to Ohio and all of the United States, including assessment and management of pain in livestock, euthanasia considerations, and public perceptions of farm animal welfare relative to current production practices.

The goal of the symposium is to increase knowledge about farm animal welfare, stimulate thoughtful discussion, and create and enhance effective partnerships that are critical to ensuring responsible, sustainable food production in Ohio.

Program details available at http://vet.osu.edu/preventive-medicine/AnimalWelfareSymposium.

— Release by OSU Extension

New Pork, Beef Marketing App For Japan

A new, free iPhone application, entitled “American Meat Recipe 100,” offered through Apple’s Japanese language App Store gives consumers in Japan 40 American pork and 60 American beef recipes, covering everything from dinner parties to lunch boxes.

Developed by the U.S. Meat Export Federation (USMEF) with support from the USDA Market Access Program, the iPhone application includes crystal-clear photos, detailed cooking methods and a “Today’s Recommendation” page that provides consumers with a guide to healthy, delicious dishes featuring U.S. beef and pork.

Users may also search for new recipes according to cooking method, such as stewing, grilling or stir-fry.

— Release by USMEF.

MSU Researchers Ask What Steak Eaters Crave

W. Harris of Starkville takes his time when searching for steaks to feed his family. He carefully inspects the meat at the grocery store and often ends up with a pack of thin-cut New York strips.
“The strips make my family happy,” Harris said. “You can see the juice in that cut before it’s even cooked.”

Mississippi State University (MSU) researchers from the Department of Food Science, Nutrition and Health Promotion, found that Harris is not the only American who considers a variety of factors when choosing a steak.

A research team, led by Mississippi Agricultural and Forestry Experiment Station assistant research professor Jason Behrends, put up a tent in MSU’s Junction while fans tailgated before a home football game. Their intention was to gauge the public’s willingness to pay extra for a thicker, heartier steak.

Behrends, along with associate professor Mark Schilling and doctoral student Christine Leick, both in MSU’s food science, nutrition and health promotion department, and Ty Schmidt, assistant professor in the Department of Animal and Dairy Sciences, set up three tables. Each table displayed a different type of steak: ribeye, New York strip and top sirloin. The steaks were available in three categories of thickness, and each category had a different price.

The thinnest steaks were the cheapest, costing $8.99 per pound (lb.) for ribeye and strip steaks and $4.99 per lb. for sirloin steaks. The mid-thickness steaks were tagged at $9.99 per lb. for ribeye and strip steaks and $5.99 per lb. for sirloin. The thickest steaks cost $10.99 per lb. for ribeye and strip steaks and $6.99 per lb. for sirloin.

Participants were asked to choose three steak packages from each table. They were told that every steak, regardless of thickness, all weighed exactly the same — ribeyes and strips weighed 12 ounces (oz.), and sirloins weighed 10 oz. — and their choices should be based on price, color, marble, texture and thickness.

What most participants did not realize, however, was that every steak was cut from the same quality of carcass, which was low-Choice, the most common grade of grocery store steak. The only noticeable difference between the meats was in thickness.

Behrends and his team found that most participants did not highly value thickness. Only 23% of consumers listed thickness as the most important factor of a ribeye, making it only the third most important attribute. Meanwhile, 30% thought that marbling was the most important attribute of ribeye, making it the most important factor of those tested.

Thickness defeated only marbling for first place with the sirloin steaks.

Less than 17% of participants listed price as the overriding selection factor for any steak type, though participants’ annual income ranged from $20,000 to $60,000.

When price was completely removed from consideration, consumers still did not choose the thicker steaks, which were originally marked as the most expensive in the experiment.

“We thought all consumers would pick the thick steaks. That’s what people want, right?” Behrends asked. “That was the biggest surprise to me. People still didn’t pick thick steaks even when we took price out of it.”

Some people chose thinner steaks because the larger surface area made them appear bigger, despite the fact that they were told they all weighed the same, Behrends said.

Behrends said that even if consumers are not willing to pay more for thickness, most of them are willing to pay more for characteristics such as color and marbling.

“No matter what you do, you eat with your eyes first,” he said. “When consumers select something, they are predetermining what it’s going to taste like.”

— Release by MSU.

— Compiled by Mathew Elliott, assistant editor, Angus Productions Inc.