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HUNTIN' DAYLIGHT -- BEEF VALUE CUTS LIFT CATTLE PRICES

by: Wes Ishmael

Call it making lemonade out of lemons. The beef industry has added so much value to cuts from the Chuck and Round葉he most sale weight in a carcass but historically the least valuable葉hat Cattle-Fax figures it accounts for upwards of half the $15/cwt. that has been added to the price of fed cattle via growing consumer demand.     

的f we figure that increased demand growth has been worth $15/cwt. on a fed steer, just the increased demand in Chuck products accounts for $6-$7/cwt. of that increase, says Mike Miller, Cattle-Fax director of business development. 典his effort in changing the value and makeup of the Chuck and how we merchandise it has been huge.

Specifically, Miller is referring to the Value Beef Cuts project begun officially by the Cattlemen's Beef Promotion and Research Board (Beef Board) in 1996. At the time not only was overall consumer beef demand still dwindling, but the Chuck and Round were the weightiest anchors.

For perspective, according to Miller, between 1988 and 1993, while the value of the Loin and Rib increased three percent and four percent, respectively, Chuck value had declined 24 percent, Round Value had declined 25 percent and the value of trimmings from these primals had plummeted 28 percent. Salt in the wound came with the knowledge that the Chuck and the Round account for 69 percent of total carcass weight.

So it was that the Beef Board羊esponsible for collecting and administering the national beef check-off program傭egan the Beef Value Cuts program with the aim of adding value to the Chuck and Round. It began with a muscle-profiling project by which these primals were literally deconstructed into individual muscles, then tested and evaluated for such things as tenderness and taste. In other words, were there muscles in these parts of the carcasses that had as much or more consumer value as those in the Rib or Loin, but muscles that had never been fabricated out of the carcass and marketed because the industry never really knew that much about them?

More specifically, Bucky Gwartney, part of the Research and Knowledge Management Group for the National Cattlemen's Beef Association (NCBA), explains the project aims to find alternative uses for cuts from the Chuck and Round and develop new products with cuts from those primals. The overall goal is to increase demand for underutilized cuts, new cuts and take the pressure off middle meats (loin and rib). After all, as Miller points out, historically, there is strong demand for middle meats.

By now, you're likely familiar with the first success of the Beef Value Cuts program: the Flat Iron Steak. This is a muscle that comes from the Chuck Shoulder, a sub-primal that traditionally has been either ground up or transformed into blade roasts and steaks, which have never been known for tenderness. Turns out, the whole muscle which is the Flat Iron is second only to the Loin's tenderloin for tenderness.

Consider it the poor man's filet, but consumers are gobbling them up at a pace that means the price of these steaks continues to rise. For perspective, since 1998 when the Flat Iron Steak came to market, the value of the Chuck has increased 60 percent and the value of the Round has increased 32 percent, according to Miller.

展e're only now beginning to scratch the surface of potential, says Ron Boatwright, president and CEO of Freedman Meats, Inc. He explains all meat operations he has insight into have increased sales of Flat Iron steaks 25-100 percent so far this year compared to 2003.

According to Betty Hogan, NCBA's Director of New Product Marketing, currently more than 70 packers are fabricating Beef Value Cuts and more than 1,300 restaurants are featuring them. The list of retail stores marketing the cuts is growing, too. But, this is all a drop in the bucket compared to the potential market, which is more than 650,000 restaurants and more than 30,000 grocery stores. As well, a major national retailer is expected to unveil its plans for launching a Value Beef Cuts program by the end of the year.

Likewise, the industry is just scratching the surface of adding value to others treasures buried within the Chuck and the Round. 鄭 lot of other cuts have potential application, says Gwartney. 的f you look at what has been accomplished during the past five years, we're moving at light speed.

As an example, a new cut, the petite tender (from the beef shoulder), is beginning to gain widespread retail interest and is expected to become the next Flat Iron steak in terms of popularity and demand.

Although each retailer involved in marketing Beef Value Cuts is unique洋ost are focusing on either the leanness of the cuts or their value pricing由andy Irion, NCBA Director of Retail Marketing explains, 典he one thing all of the retailers agree on is that Beef Value Cuts have helped them increase beef demand in their individual operations.

Value Beef Cut Gains Are Exponential

Along with the reality that the Beef Value Cuts project is accomplishing in spades exactly what it set out to do預dding value to and increasing demand for cuts from the Chuck and Round葉he project is tallying up related noteworthy accomplishments.

For one, the project has built a stronger bridge between the production industry and the retailer.

的 think this group (Beef Board and the Beef Value Cuts Group) did three remarkable things, explains Boatwright. 典hey've given end cuts credibility, especially the Chuck, they've created pull-through demand, and they've created synergy between all segments of the industry.

First came the muscle profiling that enabled the industry to identify the potential of Chuck and Round cuts, then came state beef councils utilizing the information developed nationally to help retailers understand the new potential, along with procuring the product and marketing it.

Perhaps most remarkable, though, is how this example underscores what is possible through collective industry effort and cattle producers helping themselves. You see, the Beef Value Cuts program, as a project of the Beef Board has been bought and paid for with check-off dollars. That means every cattle producer paying into the check-off is part of the success.

That's one reason it's so unthinkable that a vocal minority have taken the fate of the check-off's future from the hands of cattle producers who fund the program and have placed it squarely in the hands of the U.S. Supreme Court, which is expected to make a decision on the program's constitutionality sometime within the next nine months.

Whatever happens with that decision, though, the point is that a self-help program that the majority of producers decide they want and that all producers will fund equally謡hich is exactly what the current check-off is洋ust continue.

History doesn't allow for any apples-to-apples comparisons. There are too many variables, as an example, to prove conclusively that the absence of check-off dollars and the Beef Value Cuts program funded by it would have meant that demand for cuts from the Chuck and Round would have continued to slide, that the value of these primals would have continued to dwindle, or that consumer beef demand overall would have continued to slide.

You can make some rational assumptions, though. If cattle producers didn't fund the project, who would have? It's doubtful that a single retailer would have gone to the expense, not knowing if they could get the supply. It's doubtful that a packer would have, not having a known market for the cuts. Consequently, it's hard to argue that value could have been added to the Chuck and Round without the research funded by check-off dollars. Keep in mind, check-off dollars have also funded the research that has enabled retailers to offer so many heat-and-eat convenience products to consumers in such a short period of time. In tandem, these two milestones have led the charge in turning consumer demand around.

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