Improved genetics, focused selection target Prime grade
By Jill J. Dunkel
Breeding for high quality and retaining heifers over generations, Mike Kasten sees results. The Millersville, Mo., rancher has used artificial insemination for decades, finishing the progeny and collecting data.
Detailed records prove the herd does it all, from calving to breeding back, raising the calf on pasture and, increasingly, hitting the top rung on the premium beef ladder--Certified Angus Beef brand Prime.
"I work hard to reach that target," he says. "We've used AI for 40 years and have tried to pick bulls to get us there." His work spanned the years from when Prime was a "bonus" to these days when it is a realistic expectation for him and others who follow such a strategy.
Kasten feeds 200 to 300 calves each year at Irsik & Doll Feedyard, near Garden City, Kan., lately averaging more than 20 percent Prime. "As we've stacked three generations of high quality in our pedigrees, some cattle are running in the mid- to upper-40 percent Prime," he explains. Those that don't reach Prime still make upwards of 80 percent CAB.
That progress has not come at the expense of their ability to perform in the feedyard or grow in the pasture.
"I don't do one-trait selection. We have to have cattle that will work in a pasture situation," Kasten says. "But why not try to get it all if you can? We have the ability to make cattle that are very, very functional on grass, do very good in the feedyard and have Prime carcasses. We don't have to give up anything."
Jerry Bohn, manager of Pratt (Kan.) Feeders, says more and more producers are targeting upper two-thirds Choice and higher. "The premiums being offered for CAB and Prime certainly play a role. I think you've got more genetics that continue to improve towards cattle that grade higher."
He also sees more feedyards focusing on quality. Pratt Feeders uses individual animal management to gain a further edge. "We get the big guys out of a pen early on so we can feed the rest a little longer, getting them to grade higher," Bohn says, noting other advantages.
"We try to market every animal to its optimal end point; the cattle do better that way," he says. "If you're feeding the bulk of the pen to the same end point, some of those calves will get too big."
Better genetics and management at the yard have led to CAB acceptance rates triple what they were 10 years ago at Pratt Feeders. "With the nature of grades being higher, we see a few more of those bumping up beyond Choice. Anything that kicks up to Prime is gravy on the top," he says.
Tyler Brown, with JBS in Greeley, Colo., has seen a significant increase in the demand for high-quality beef over the last 18 months.
"It's been even more pronounced in the last six to eight months," says the JBS premium program manager. "And I don't see it subsiding any in the near term. The market is sending a clear message, not just in the foodservice channel, but also in the retail channel. Consumers are demanding a higher quality eating experience."
Brown says the demand for Prime-grade product has improved similarly to the high Choice market in those retail stores.
Indeed, the number of CAB retail partner stores selling CAB Prime is up 83 percent in the last four years, from 252 stores in 2008 to 463 in 2012. Nearly all licensed packers now sell the Prime brand extension.
"Beef costs so much now that it could pressure demand growth," allows David O'Diam, CAB assistant director of business development. "But I don't see the premiums to producers going down because Prime is becoming part of the sales strategy in more stores, especially with the end meats.
"The market wants at least a steady supply, but it's becoming a struggle," he says. "Packers were getting into 3 percent Prime for a while and that's back to 2 percent of all cattle now."
The mid-October Cattle-Fax Trends newsletter projects a $12 Choice-Select spread for 2013, which would be the fourth consecutive annual increase in the market indicator, and the second-highest ever.
Those are some of the reasons Brown says rewards for producing premium beef should remain robust for the next few years.
"Hopefully, that signal is getting to the ranch, to be producing as much high-quality product as possible," he says.