We all have bought meat products of some kind from a grocery store or local butcher. However, were you aware of all the statements and logos on that package and what they meant in terms of their impact on the dollar value of the product you purchased? During the March 2nd Animal Care Wednesday Webinar, Dr. Bryon Wiegand, a Professor and Meat Science Extension Specialist at the University of Missouri, discussed the value of meat products and their label claims. He used beef as his example, but the same principles can apply to any of the other species, including pork, lamb, and poultry.
With any livestock species, when live animal prices go down, there is some impact down the food supply chain to help profit margins remain positive. This sometimes is seen in higher meat prices per pound of certain cuts, or in the creation of new cuts of meat being developed from lower value areas of the carcass, called value cuts.
Several new value cuts showing up on menus come from the Chuck Roll:
- Chuck eye steak
- Delmonico steak
- Denver steak
- Sierra steak
Several new value cuts that have come from the Shoulder Clod are:
- Flat iron steak
- Petite tender roast
- Ranch steak
- Ribeye cap steak
- Hanger steak
If we talk about carcass value, the majority of commodity beef falls into either high Select or low Choice grades falling around average pricing. What is important to note for producers and feeders is that the range for premiums on carcasses is $2-$10, while the range for discounts on carcasses is $15-$25. This difference can be a huge determining factor of profit depending on how the animals are marketed.
Sometimes producers believe they can capture more value by selling direct to the consumer. An increasing number of smaller local processors and meat lockers are being approached by producers that want to capture a niche market or have a value-added claim among their neighbors. Producers may sell a quarter or half of beef to neighbors because it is cheaper to purchase, but the real question needs to be asked, where is the value?
A look at labels
A brief review of meat labels shows many basic components. There are required items such as, product name, safe handling instructions, net weight, sell by date, ingredient or source of product, unit price, and total price. There may also be additional information on a label that denotes value was added to the product through extra processing. For example, a “boneless” product has increased value because extra effort went into removing an inedible portion that would have contributed to the total weight. However, the extra effort is reflected in the price of that product, thus adding value to the cut of meat. Other examples of adding value may be trimming extra fat off of cuts or choosing a different packaging type that extends shelf life or freezer life of the product. The most important thing to remember about labels and product pricing is the fact that consumers ultimately shop by their personal price point, which means they choose products that fit into their budget.
Labels as marketing tools
Back in 2008, the United States’ economy seemed to soften. We then saw an increase in the number of government and non-government organization certified labeling programs. These included such programs as USDA Organic, Grass-fed, or Animal Welfare Approved. Most of the popularity of these label programs was driven by consumer concerns of how their food is raised, however, producers have also been taking advantage of these niche markets to add value to their products and increase their profits. The main items that these label claims are based on include:
- Type of feed allowed (grass and hay, grains, or byproducts)
- Pasture access (on pasture for some period vs. only in dirt lot or building)
- Welfare (standards vary widely by program and species)
- Antibiotics (animal was treated or not treated)
- Growth hormone (synthetic hormone given or not given)
Other marketing schemes on meat labels may even be branding using a celebrity. Additionally, imported products may also be viewed as premium products just simply due to being from outside of the country. These certified programs and branding efforts all impact the final price of the food product that consumers buy because there is value added to it. However, Dr. Wiegand stressed, “The important thing to remember about labels and marketing claims is that if we can’t maintain and verify a label claim, we are going to lose it.”
Understanding the value of meat products and how label claims can impact product price is challenging to say the least. Consumers seeking meat products with certain label claims should be sure to review the standards of each claim to know if the claims match their perceived meaning of it. For producers seeking to add value to their meat products, investigating niche market opportunities, capturing quality premiums or even simply managing to avoid quality discounts can all be ways to add to your bottom line. If you have additional questions, contact Dr. Bryon Wiegand.
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