During a seminar on the merits of high-quality beef, two industry leaders expressed concern over future supplies and short-term focus on pounds over quality.
Mike Connelly, vice president of Ruth's Chris Steak House, which serves only USDA Prime, noted the potential impact of higher-priced corn on the already-declining supply of Prime.
Certified Angus Beef LLC (CAB) vice president Larry Corah identified factors that threaten the ability to meet growing U.S. and global demand for premium beef.
Both men spoke at the BEEF Quality Summit in Omaha, Neb.
Corah pointed out that the 2005 National Beef Quality Audit showed a large gap between consumer demand and lagging production of premium grade beef. The audit showed consumers want four times more Prime than current supplies, he said. A 2007 Cattle-Fax study quantified the value of premium quality as adding half a billion dollars per year to the U.S. beef industry.
Meanwhile, the reopening global beef market represents future growth, and the U.S. is known as the home of premium beef. “We need to build on that position,” Corah said, “because we can't compete for the title of least-cost at Select quality.”
Connelly said Ruth's Chris may have to look to international sources of quality beef in the future. “We would prefer to stay with exclusively U.S. supply, but the industry would need to respond to demand,” he added.
Producers control most of the decisions that allow them to hit the quality target profitably, Corah said. “If we extend the stocker phase in response to higher corn prices, but cut back on overall nutrition for growing cattle, quality grades will fall,” he noted. “Of course, pounds are important, but producers can no longer afford to ignore quality grade, because the right combination of genetics and management can deliver both.
“Technology can be a friend to quality production, or it can work against the consumer,” Corah said. “For example, the beta-2 agonist now available for feedlot rations can have a negative impact on beef quality for the consumer.”
In particular, Connelly said the USDA-approved product, Zilmax, could further curtail supplies of Prime beef. “If cattle feeders use products that reduce the supply of quality beef, it is a short-sighted approach,” he said. “The beef industry will likely pay a long-term price.”
Freedom of Information Act data shows a 15- to 37-point reduction in marbling scores when Zilmax is fed 20 and 40 days, respectively — and there are other, similar products in the pipeline, Corah said. In the average pen of feedlot cattle fed Zilmax for the approved time, this seemingly small effect on marbling could result in 20 percent to 30 percent fewer cattle meeting high-quality standards such as those for the CAB brand.
The future viability of the beef industry depends on producer decisions that include U.S. and global consumer interests, he and Connelly concluded.