Making the most of limited supplies, CAB shines in 2006

US - A continuous quest for high quality and value led the Certified Angus Beef (CAB) brand to its highest product utilization ever in fiscal 2006, which ended Sept. 30.
calendar icon 4 January 2007
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While supplies of most U.S. cattle began a cyclical increase last year, the high-marbling kind required for the CAB brand did not keep pace. Despite a record high 13.1 million identified Angus cattle, the record low 14% acceptance rate called for ingenuity from licensees, Certified Angus Beef LLC president John Stika said.

The brand’s 13,500 licensees worldwide sold more than 544 million pounds in 56 countries. That seventh consecutive year of sales greater than half a billion pounds was only possible by marketing nearly 300 pounds of boneless beef equivalent per carcass.

Producers may associate CAB with such items as prime rib and strip steak, but the chuck and round hold the key to higher premiums, said Stika, who served as CAB vice president for business development last year before accepting the top post in November.

“The high-quality steak cuts are easy to market because of well-established demand for such products,” he explained. “But our licensees must sell more of each carcass as premium quality if producers are to realize most of the dollar value of their cattle. That creates the pull-through demand and rewards for on-target producers.”

According to a survey of licensed packers last year, those rewards have piled up to more than $200 million in grid premiums over the last decade. “It’s essential to satisfy consumers, but there is no future for a brand that cannot reward its producers,” said Jim Riemann, who recently retired as CAB president. “Consistency, integrity, quality and trust—in every sector of the industry—have always been vital parts of the CAB brand.”

The American Angus Association’s AngusSource program provided a new opportunity as the CAB board voted last June to allow CAB eligibility for all calves registered with that source- and age-verified program. That’s in addition to the industry standard of Angus-influenced cattle with a predominantly black hide color.

Source: Drovers

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