Cheaper feed and the removal of a feed additive are bringing U.S. beef lovers juicier steaks, leaving the industry wondering whether to muscle up cattle before slaughter or aim for more fat, which enhances flavor.
The industry has depended on growth promoters known as beta-agonists for extra tonnage to counter the smallest U.S. cattle herd in 63 years. But these largely pack on muscle, not the tastier fat which produces "marbling" and helps push the carcass into the U.S. government's top quality "choice" category.
For the week ending Sept. 13, cattle carcasses stamped "choice" were up 2.3 percentage points from a year ago at 64.7 percent, according to the U.S. Department of Agriculture. At the same time, there were fewer carcasses graded "select," the next lower quality category.
USDA data on Friday showed the average wholesale price for choice beef at $249.16 per hundredweight (cwt), compared with $234.78 for select. Cattle and beef prices are at record highs.
Part of the improvement in quality is due to increased use of feeding corn, which is cheap because of a record harvest. And as pastures recover from several years of drought, cattle have been fattened slowly outside feed lots.
Another factor leading to fattier meat is the removal of Zilmax, a very potent growth enhancer, by manufacturer Merck & Co in the summer of 2013. Alternative beta-agonists don't pack on so much muscle.
"If you take Zilmax out of the equation, and you have cheap corn, the two together gives you cattle that are going to grade better," said John Nalivka, president of Sterling Marketing Inc in Oregon, whose clients include packers and feedlot operators.
Some of the country's largest meat packers, including Tyson Foods and Cargill Inc, last year stopped using Zilmax, citing animal welfare concerns regarding cases of cattle with difficulty walking.
Cargill chalks up better grading to improved genetics, longer feed times and more affordable feed. More study is needed to determine whether there is a direct correlation between better beef quality and Zilmax removal, said company spokesman Mike Martin in an e-mail response.
Tyson Foods, which has 26 percent of the U.S. beef market, declined to comment.
Merck continues to evaluate Zilmax, said company spokeswoman Pamela Eisele, adding that it was too early to determine when it would return to the U.S. and Canadian markets.
If consumers are willing to pay more for tastier beef, packers may have to decide between tonnage and taste.
"The sector still largely pays producers based on tonnage, not on quality," said Jim Robb, director of the Colorado-based Livestock Marketing Information Center.
But with cattle supplies tight and beef prices rising, Nalivka believes processors cannot afford to sacrifice quality for quantity.
"At the end of the day it boils down to consumers who are willing to pay more, but it darn sure better be a good product," he said.