The financial rewards for producing high-quality cattle can’t be ignored today. Consumer demand is changing the industry.
The University of Missouri and a consortium of beef-related companies on Aug. 30 will announce a strategy for the industry to adapt to and profit from these new consumer preferences. This project will describe how cow-calf producers, stockers, feed yards and processors can work together to produce high-demand products.
“The U.S. cattle industry is nearing a critical point because of a shortage of cattle that grade Upper Choice or Prime,” said David Patterson, professor of Animal Science at MU’s College of Agriculture, Food and Natural Resources.
“The U.S. beef industry has operated for years on the premise that cattle are commodities and sold at an average price. Since the late 1990s, cattle have increasingly been valued on an individual-carcass basis rather than on an average live-price basis. As a result, higher quality grades have been rewarded.”
Scott Brown, research assistant professor in Agricultural and Applied Economics at MU, said that segmentation within the U.S. cattle industry has hindered adoption of newer production and marketing strategies. He said the new initiative will show how these various industries can better coordinate.
Brown said such a program will result in a strategy that runs from conception to the dinner plate. “Today there is often a disconnect between Missouri cow-calf producers and cattle slaughter/beef consumption. “Producers sell calves and do not know the quality of the cattle they’re producing,” he said. “Their calves could be of very high quality, but they reap none of the financial rewards because they are sold for average prices as calves.”
Working with MU on the project are Irsik and Doll Feed Services Inc., Garden City, Kan.; Pratt Feeders LLC, Pratt, Kan.; Accelerated Genetics, Baraboo, Wisc.; Genex Cooperative Inc., Shawano, Wisc.; and Select Sires MidAmerica with offices in Louisville, Ky. and Logan, Utah.
Consumers Are Increasingly Looking for High Quality Meat
Prices for meat products are going up, but prices for high quality product are going up faster.
Brown said that today the maximum prime premium for producers has reached $40 per hundredweight. This is up from a $12 per hundredweight premium in mid-2009. He said there has been a steady increase in prime premiums as the U.S. recovers from the economic downturn.