CAB Releases 'How-To' Guide

US - Cattlemen have to keep producing a fast-growing calf every year to make money. But that’s not enough if those calves don’t produce the beef consumers want.

28 November 2007

3 minute read

North America

A new “how-to” report from Certified Angus Beef LLC (CAB) spells out the means to pleasing those who bring new dollars to the beef industry.

“There’s a solid market for premium quality beef,” says Ron Boatwright, of Dallas-based Freedman Meats, Inc. “Our customers want a consistent product and with CAB, our customers know what to expect.”

The company grew from a $15 million business in 1989 to $191 million at the Dallas facility this year. Boatwright attributes that growth to the impact Certified Angus Beef ® (CAB®) has on the company’s sales and quality image.

CAB was born to meet demand for marbling and high quality beef and has grown to become an industry icon for that. “The brand delivers on a promise,” says CAB supply development director Mark McCully. “Packers pay producers more than $40 million a year to keep the supply coming in.”

Producers share in those premiums when they take steps to realize the potential in high-quality Angus genetics, he says. The money represents “why” producers would aim for the CAB target. The next consideration is “how,” and the new management guide from CAB addresses that question.

The Best Practices Manual is a follow-up to last year’s special report, Supplying the Brand, which explained how the “pull-through” effect in the open market bids premiums for cattle that hit the CAB target.

“This new report gets down to the nuts and bolts of production decisions,” McCully says.

Presented in five main sections after an introduction, the manual provides insight into general management, genetic selection, health, nutrition and marketing. “We think that the average producer could double their herd’s CAB acceptance rate by following this guide,” McCully says. “That could double your premiums.”

The Best Practices Manual draws on advice from more than a dozen animal scientists and industry professionals in each of its sections. However, a cost-benefit analysis is hard to pin down.

Herd improvement requires some investment, economists point out. Some specific recommendations, such as individual animal identification (ID), are means to an end. “But ear tags do not make a manager,” says Iowa State University’s John Lawrence. “Decisions make a manager, and vice versa.”

Health programs pay by lowering cost of production more than from the revenue side, Lawrence says, although several studies show premiums of more than $6 per hundredweight for third-party certification. “To get that higher price, you’ll need to do more than just produce that healthy calf,” he adds.

University of Missouri economist Vern Pierce couldn’t agree more. “It’s understandable that people get excited improving health, genetics and nutrition,” he says, “but they absolutely have to get just as excited about marketing to capture the added value.”

The CAB manual introduction warns, “A value-added product sold as a commodity will bring a commodity price.” Its marketing ideas section includes an outline for a feeder-calf “Value-Discovery System” similar in function to the grid marketing now popular for finished cattle.

Ultimately, the Best Practices Manual is no more than a set of guidelines for those who want to produce high-quality beef, and reap the rewards, McCully says. Its foundation ideas and theories are science-based, but like all science, they’re subject to being replaced as the body of knowledge grows. Moreover, many are in need of local adaptation to environment and resources.

As the manual says in closing, “Perfection will never be attained; proceed with the certainty that you can always do better than what’s considered best right now.”

For copies of the Best Practices Manual or Supplying the Brand, contact Marilyn Conley at 800-225-2333, or email [email protected].