Improved genetics, management and attention to detail are paying dividends for America’s cattlemen

Improved genetics, management and attention to detail, some of which began a generation ago, are paying dividends for America’s cattlemen. Those changes give today’s consumer more beef products they desire, and reward stakeholders in every industry segment.Advancements in genetics and management are most evident in the significant improvement to the quality grades of cattle offered for harvest. Last month USDA’s Agricultural Marketing Service (AMS) reported the percentage of cattle grading Prime and Choice for the week ending Jan. 7, was a whisker shy of 79%. That’s the highest percent Choice and Prime ever.Additionally, the Choice-Select spread is consistently higher, says CattleFax analyst Lance Zimmerman.“The Choice-Select spread has been relatively consistent in the $8 to $9 per cwt range,” he says. “We see steeper discounts for an animal that can’t grade Choice, and the Prime versus no roll spread is $420 per animal.”Efforts to improve beef quality began with the landmark 1991 National Beef Quality Audit. That study involved producers, packers, processors, retailers and consumers, identifying the quality defects and missed opportunities at the root of diminishing demand. That audit famously found $280 per carcass in lost value (using market prices at the time), with $200 of loss due to excessive fat. Yet, while the industry needed to eliminate waste fat, there was a clear signal more taste fat (marbling) was desired.Subsequent quality audits revealed the industry made progress in the 1990s and early 2000s, reducing bruises, injection site blemishes and other management-correctable defects. A greater emphasis on genetics was also underway, but quality grade concerns remained. Over the past decade, however, that has changed.“Beginning in 2007, the industry saw annual advances, with the exception of 2012, in the percentage of fed cattle carcasses grading Choice,” says Paul Dykstra, beef cattle specialist with Certified Angus Beef LLC. “The 2006 average of 51.7% Choice remarkably improved to a 2015 average of 69.1%.”Dykstra recently published a white paper, “Why Quality Grades are Improving,” which examines the trend, its causes and implications. Along with gains in the Choice category, Dykstra notes the percentage of Prime carcasses—locked in the 2% to 3.5% range for years—“jumped to 4.2% in 2014 and 5.1%” in 2015.“People may recall hearing about higher quality grades several decades ago, but in the 1970s and '80s many carcasses were not offered for USDA grading,” Dykstra says. “Today’s U.S. cattle herd is producing the largest amount of high-quality beef ever.”Dykstra says a shortage of high-quality beef was prevalent a decade ago, with the share of Choice carcasses often dropping below 50%. “That led to market incentives, fueling the turnaround in grade. The 2015 average of 69.1% Choice was a 17.3-percentage-point improvement in annual grading since then.”