Two things happened in the latter years of the 20th Century that reshaped the beef business for good: the rise of Certified Angus Beef and other breed-specific branded programs, and the beginning of sophisticated genetic analysis.
Both helped pave the way for greater consumer orientation, and equipped producers with tools to make improved management decisions and genetic selections. And, both were made possible by considerable investment by breed associations.
But neither the launching of branded beef programs nor the development of genetic analysis systems always translated into success for associations.
In fact, while the last 10 years have been good for Angus and Angus-type genetics, other breeds – especially continentals, which watched their numbers expand in the 1980s, then contract in the 1990s -- found themselves on a slippery slope of declining registrations and shrinking marketshare. In addition, both the pork and poultry industries have moved away from breeds and associations; only companion animals like horses, dogs, cats along with cows continue to maintain registries.
All of this no doubt means changes are on the horizon. And now that a new century is upon the beef business, and association execs expect the products and services they offer to continue to change, but the fundamental role their associations play to remain much the same as it did decades ago.
“I think the notion that breed associations can be all things to all people is no longer valid,” says Bob Hough of Red Angus Association of America. “In a generally declining seedstock industry, the financial resources are not there to fully staff and conduct all of a breed association's traditional activities at a maximum level. Breed associations must decide what they are going to be and make sure they adequately fund the activities that will get them there. If breed associations cannot make tough decisions in terms of resource allocation, they will cease to be important.”
For centuries, the role of breed associations has been to maintain breed purity through pedigrees and ownership of specific animals.
“Those functions began to change in the late 1950s, when we departed from this traditional role into other areas that would relate to the economic success of membership and our breed of cattle,” explains John Crouch, executive vice president for American Angus Association.
AAA was the first U.S. association to develop a performance record-keeping program, which it rolled out in 1958. In 1974, it initiated the national sire evaluation. In 1978, the association approved and adopted the concept of CAB. “All of these things were departures from traditional ways of conducting business,” Crouch says.
Now, like other associations, AAA appears ready to move into other uncharted territories. In its most recent long-range plan, AAA lists as its top priority to become the “information center” for the beef business.
“I agree with their recognition that breed associations should be sources of information for the beef business,” says Kent Andersen of North American Limousin Foundation. “But we also want to be ‘knowledge' centers. The next step beyond being a source of lots of stuff is that we need to consolidate that stuff into knowledge to make good business decisions.”
Interestingly, breed associations now find themselves in enviable positions because of their comprehensive databases. Unable to replicate let alone invest the capital necessary to procure comparable amounts of information, private companies are reaching out to associations to provide them with data processing as well as information on specific sires or bloodlines.
“Rather than competing with private companies, I see breed associations forming alliances and partnerships with companies that are focusing on producing certain types of products where the genetics of that breed best fit,” says Blake Angell of Red Angus Association of America. “We've formed an exclusive partnership with Excel Corporation to do just that. Because of Excel's focus and dedication on producing high quality products, Red Angus cattle are a perfect match to help supply Excel's branded beef product lines of Sterling Silver and Angus Pride. By identifying the Red Angus genetics in cattle, and through those cattle consistently meeting the specifications of Sterling Silver and Angus Pride, the partnership allows for both the RAAA and Excel Corporation to be successful in the future.”
Still, associations believe their future success boils down to three things: continued efficient data entry for members. Useful genetic evaluation so members and others can make improved breeding decisions. And, efficient information distribution to members and their customers.
Much of this will be improved through widespread adoption of the internet, where producers can go to receive real-time information on specific bulls or bloodlines. Or, they can enter performance or product quality information on their cattle directly into their association's database. Both of these things will save associations money and time.
“Breeds will have to invest in technology so they can provide expanded services at lower operating costs,” says NALF's Andersen. “The burden of punching in data and sending it in the mail, much of these things will be done electronically. The result will be that our staffs may be different. Rather than having a lot of people processing data, we will likely have more information and knowledge workers than we do today.”
The proliferation of Expected Progeny Differences is an area in which breed associations have enjoyed great success.
But what's the next step beyond EPDs? Will there be more accurate and reliable tools for genetic prediction in the future?
“We're seeing a small revolution in the way commercial producers use cross-breeding systems,” says NALF's Andersen. “The systems they're using are very disciplined, and require the use of effective genetic prediction tools. To meet that demand, we will always be evolving to slightly different sets of traits for which EPDs are available. We will see more accurate predictions for things like end product merit and reproductive performance. We're also going to see a lot more focus on matching the genetics of bulls to specific groups of cows, their production and marketing environments so they can meet the needs of a variety of end-product targets.”
Producers can also expect breed association to cooperate more with each other, by potentially sharing data, genetic analysis information and perhaps even staffing resources in the future. “The sharing of information may result in the widespread application of multi-breed EPDs,” says Andersen. “This will enable producers to compare sires of different breeds on an equal basis, and make improved crossbreeding decisions.”
But are there too many EPDs available? Do so many EPDs for so many different traits actually confuse producers rather than help them?
“The indiscriminate proliferation of EPDs has really gotten out of hand,” says Hough. “In three breeds' sire summaries, I recently counted 24 distinct EPDs. This is too much information. Just because we have the data to calculate an EPD, does not mean we should have an EPD for that trait.”
Don Schiefelbein of American Gelbvieh Association predicts a two-tiered system for genetic prediction and selection in the future. In this system, seedstock producers would use a wide array of EPDs and other genetic selection tools to make breeding management decisions. Commercial producers would use more general tools to narrow down which genetics would be best suited for their environment and marketing practices.
AGA recently developed software that simplifies genetic selection decisions for producers, by allowing them to input production, environmental and marketing information and matching these things to desirable genetics.
Recently, AGA became the first breed association to develop EPDs based on dollar values. Most likely, similar genetic prediction tools will be available in the future.
Other developments could be the widespread application of DNA marker-assisted technologies. But these may not be a silver bullet for genetic predictions, either – at least, that is, until researchers gain a better understanding of the interaction of genes, and how different genes respond to different environmental or management situations.
SIDEBAR HEAD: The rise of hybrid seedstock
The rise of hybrid seedstock represents both threat and opportunity for breed associations. In fact, breed associations in other food animal industries, such as pork or poultry, are either non-existent or economically irrelevant.
Will the same happen in beef?
AGA's Schiefelbein believes registered hybrid seedstock will someday dominate the commercial marketplace in the beef business. But rather than fighting this trend, he thinks associations should embrace it.
In fact, AGA recently developed a line of hybrid cattle called “Balancers,” which the association recognizes as a genetic subgroup in its registry. Other associations have developed similar programs.
The benefit through embracing hybrids is that associations that do so not only get data on composite livestock, they also get revenue for processing and disseminating information on these cattle.
“Composites already dominate the seedstock market in hogs, poultry, fish, corn, soybeans – you name it,” Schiefelbein says. “But breed associations will continue to record and propagate with their memberships purebred populations of their specific breed. And purebred lines of cattle are essential for rapid genetic progress. I believe we'll see more and more breed associations beginning to record -- many already have -- hybrid derivative cattle.”
Adds Hough: “I believe there will be more hybrid (F-l) bulls being used in place of where a straight-bred continental may have been used in the past. This demand should result in the production of more hybrid bulls, but I do not see many new four-breed composites being built. Our registry has been designed to accommodate composite/hybrid cattle. In our registry, we are currently seeing a rapid expansion of Angus cattle with Brahman influence. These ‘Angus Plus' cattle will fill an important market demand that exists in certain environments.”
By developing opportunities for hybrid cattle, and by propagating their use, breed associations believe they will bolster their position in the marketplace. Unlike swine associations, which either ignored or fought the trend in the 1970s and 80s, cattle associations believe they can be in the driver's seat when it comes to hybrid production, thus ensuring their relevance in the years to come.
“It's all about control,” adds Schiefelbein. “The database is the basis for association control. If you are the primary information center, you have primary control. Breed associations are in the driver's seat because we control the database. In other words, this is our game to lose. Breed associations think more like genetic companies each day and less like a ‘typical' breed associations of the past. The programs we've developed are things that privately owned genetic companies would endorse whole-heartedly.”
SIDEBAR HEAD: Pull the rope, don't push it
Historically, breed associations have adopted “push-through” marketing efforts, which involve widespread advertising and promotional efforts but very little emphasis on building demand for commercial calves, feedlot cattle or even breed-specific beef.
All that changed in the late 1970s when the Angus association rolled out Certfied Angus Beef. Other breed associations, seeing CAB's success in not only building demand for Angus beef but also for Angus bulls, took on a more active role in the marketplace, too.
At the minimum, most of them developed their own commercial marketing programs to help commercial producers identify markets for their calves. Others followed in CAB's footsteps, and took their case directly to the consumer. Certified Hereford Beef is an example of the latter.
“Our commercial marketing efforts include a USDA Process Verified Feeder Calf Certification Program, access into premium branded beef programs, value based marketing, and a host of feeder calf marketing services,” says Hough. “It is our policy that successful bull sales start with the successful marketing of feeder cattle. That is why commercial marketing is one of our highest priorities when it comes to resource allocation.”
It may be increasingly difficult for breed associations to actively develop their own branded beef programs in the future. Labeling requirements, which are much stricter today than they were when CAB was rolled out in the late 1970s, and the level of investment it takes to launch a new product line all make it an uphill battle for associations to enter into the fray.
But that doesn't mean associations can't play a key role in the success of other, privately owned branded ventures. Currently, breeds are extensively involved with companies like Laura's Lean, PM Beef Group, and others. All of these things represent pull-through mentality, and a departure from traditional marketing practices.
SIDEBAR HEAD: The Black Angus Juggernaut
No doubt Black Angus cattle now enjoy unprecedented market strength. Nearly half of all purebred cattle registered in this country are Black Angus. More than 90 percent of all U.S. semen sales are Black Angus. Black Angus breeders have enjoyed a decade of selling more bulls than all other breeds combined for several hundred dollars more per head. They've watched consumer demand for Angus products explode. Today, nearly 40 products use the word “Angus” as part of their brand name.
The result of this has been shrinking marketshare for almost all other breeds. Revenues generated by registrations and transfers have plummeted. Producer demand for some breeds – especially continental breeds – have softened considerably. And as a result, many breed associations have pared back services and staffing levels.
So is there a future for breeds other than Angus?
Absolutely, says Andersen. In fact, the recent tough years have forced many associations to focus on what products and services they do best. Rather than trying to be all things to all people, breed associations today are more sophisticated technologically, and better prepared to process and deliver useful information to the marketplace.
“Success isn't solely necessarily determined by having the most money or the most people,” says Andersen. “If you have bright, talented and innovative people, you can succeed in this business.”
Andersen and others believe their breeds can latch on to the success of Angus, which ultimately will build demand for their cattle.
“We look at the widespread population of Angus genetics to be a good thing for us because they are very complementary to Limousin genetics,” Andersen explains. “Our challenge is to demonstrate to the commercial industry that Continental-British cross cattle are more profitable than predominantly straightbred commercial Angus programs. A carefully constructed British-Continental cross comes a lot close for hitting targets than any straightbred there is. We need to communicate this to the industry.”
Schiefelbein sees changes in beef processing – and the growth of case-ready product – to have beneficial impacts on continental cattle because the value of cattle will no longer be determined by their ability to marble.
“We know that a quality carcass is one that grades Choice or better with an acceptable amount of retail yield,” adds Schiefelbein. “We also know that today's consumer does not have to deal with excess fat almost all beef is sold with zero fat trim at the retail and restaurant trade. With the movement towards case-ready beef, the importance from an economic standpoint of retail yield will increase substantially. Once the packer is forced to essentially move to zero fat trim, the dynamics of carcass value will change dramatically. This will have a profound impact on genetic selection decisions in the future.