Congratulations to the American rancher! You have done an amazing job making more, better beef with fewer, more-efficient cattle—the definition of sustainability!
But progress does not come without problems, and the industry is facing one in production; there’s going to be more beef.
The U.S. has been steadily producing more beef over the past years. In 2016, domestic production was over 25 billion pounds. This year is projected to produce over 26 billion pounds. And early estimates expect 2018 will see production exceed 27 billion pounds and the previous record. Some estimates expect 2019 will eclipse whatever record 2018 will set.
This presents challenges. More beef on the market means at least one of three things must happen: Domestic consumers must buy more beef; international consumers must buy more beef; and/or producers must accept less money for their cattle and/or beef.
The “more cattle” part of the “more beef” problem usually gets the most attention. Relatively speaking—considering the record lows in cattle supply seen in 2014—the industry is bringing more cattle to slaughter in recent years.
For example, in the week following Thanksgiving—usually a period that sees slowing production rates—almost 650,000 head were processed. That week was the highest overall production week of the year and had the highest fed cattle kill rate of the year. That week produced a lot of beef and expectations are that production rates going forward will quickly exceed the U.S. packing industry’s capacity.
More than just more
There’s more to “more beef” than simply “more cattle,” however.
“We’ve seen a lot of change—fundamental change—in our industries, but at the same time, a lot of opportunities,” said University of Montana’s Dr. Tim DelCurto, professor of range beef cattle nutrition and management. DelCurto spoke at the 2017 Western Alfalfa and Range Symposium, held Nov. 28-30 in Reno, NV.
“Why is this happening? If you actually calculate the increase in carcass weights over time, it accounts for 75 percent of this increase in production. Another way to say that is our cattle have gotten a lot bigger.”
He explained that, since 1977, carcass weights have added 6 pounds per year on average.
“That might not sound like that big a deal, but if you go 40 years, that’s 40 times 6 and, all of a sudden, you have a lot of weight added to carcasses.”
According to USDA data, average steer carcasses this year have ranged from the January high of 905 lbs. to the May low of 830 lbs. The five-year average ranges from averages of 845-890 lbs.
Those carcasses have been improving in quality as well. Despite recent news of declining rates of Choice-grading carcasses on a short-term scope, the rates of Choice carcasses have increased noticeably over the past few years. The five-year average rate of Choice carcasses is about 66 percent. In 2017, that percentage ranged from 70-74 prior to the recent recalibration of grading cameras. Most recently, about 68-70 percent of carcasses have been grading Choice.
The rate of Prime-grading carcasses has also increased. Last week, 7.34 percent of carcasses across the nation graded Prime. While this is a good thing in terms of improving quality, it also presents a problem in terms of moving product. Prime beef is more expensive, meaning there is a smaller audience of potential consumers for it. Composite boxed beef prices in recent weeks have shown Prime product at about a $25/cwt. premium to Choice.
Prime beef brought up a topic DelCurto sees as relevant to the future of beef production: dairy.
“It may surprise you that about 30-50 percent of Prime beef comes from Holsteins,” he told the audience, adding that “that’s hard for a beef guy to say.”
He also pointed out that technology is likely to make the dairy industry’s impact on the beef industry even bigger very soon.
“We’re pretty close to perfecting sexed semen. If we get that effective, the dairy industry is going to be an even bigger player in the beef industry because they can breed the very best dairy cows for female [calves] and everything else can be bred for beef characteristics,” he said, chuckling as he pointed out that the beef industry doesn’t give the dairy industry its due.
“I expect to see some pretty significant changes.” — Kerry Halladay, WLJ editor
