Certified Angus Beef Grid Premiums Continue Upward SurgeWed, 18 Apr 2012 11:11:50 CDT
The big hike in CAB grid premiums last year are attributable to one thing says Certified Angus Beef President John Stika.
"The biggest thing the production system needs to always keep in mind is that all new dollars that flow into this industry start with the consumer."
Consumer demand for Certified Angus Beef surged last year. That demand fueled a packer-reported 40 percent jump in CAB grid premiums.
Stika says that increased demand filters all the way through the industry.
"You know, if packers are receiving higher prices for Certified Angus Beef, and those prices for Certified Angus middle meats this past year ran about 20 percent higher than those same prices in 2010. As those prices go up then, obviously, we tend to see live cattle prices and premiums for Certified Angus Beef-qualifying cattle go up as well.
The $32 million CAB grid premium total last year is up from $23 million in 2010 according to February reports. This premium was in addition to hitting USDA grading targets.
While the choice-select spread gets the most attention, Stika says "What most producers tend not to notice or not realize is that in many cases the certified Angus-choice spread remains wider than the choice-select spread."
Stika says it's a trend he expects to see continue.
"It's really the function of a brand that continues to grow-that's consumer awareness globally and, obviously, we've seen a shift, I believe, in what consumers are expecting from our beef industry."
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