Cattlemen Respond to Premiums for Producing High Quality BeefThu, 20 Nov 2014 15:15:11 CST
Current market trends reward producers who supply superior cattle. Randy Blach, CEO of CattleFax said its a great time for beef producers with consumers demanding high-quality beef.
"It's been able to reward producers on a weekly, monthly, annual basis with much, much bigger premiums than they get just selling cattle on averages," Blach said. "So that's really the market at work. The differentiation of the market, people knowing that they're going to get a high-quality eating experience with a product that fits a very, very small percentage of the overall market. That brand promise is working."
Better grading cattle aren't just a coincidence, Blach says. Producers are reacting to the longterm premiums.
"It's the highest quality grade in the industry since 1991," Blach said. "That tells you that producers are responding to an economic signal out there that is focused more on quality grade and yield grade, its not just one or the other, its really putting a better overall package together for U.S. and global consumers."
The increase is partly driven by consumer demand for a high-quality eating experience.
"Consumer incomes have been on the rebound here over the last few years, but prior to the recession we went through in 2008-2009, prior to then, we were already seeing the signal," Blach said. "The signal was, was to make more of the animals black hided because there was a value associated with that."
Better grazing conditions, lower corn prices and higher premiums--all indications say now is the time to rebuild the herd with a focus on superior genetics.
"So, the situation we have now, we basically have both ends of the spectrum in place," Blach said. "We've got profitability and green grass. The best grazing conditions in 20-plus years. So that will allow us to expand the nation's cowherd and to respond to the economic signal."
Click or tap on the video below to watch the latest video news release provided by Certified Angus Beef LLC and the American Angus Association.
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