Beef Demand: More Than Just a Good SteakTue, 20 Jan 2015 15:50:31 CST
T-bones, sirloins, filets and strips those "middle meats make up 12% of the carcass, but nearly half of its total value. That and the difference in cooking method--lead many to believe it's the only place where beef grades matter. Not according to longtime Urner Barry market reporter Bruce Longo and the data he tracks.
"Over about 50 percent of the carcass happens to be either chuck or round, known as the end cuts," Longo said. "So it's imperative that the end cuts get some life, get some play, get some retail activity in it and also we see that from food service."
Over the last five years, the spread between Certified Angus Beef ® brand and U-S-D-A Choice carcass values has jumped roughly 30 percent, with much of that increase represented by premiums for end meats and grinds. Longo said that shows there's value in higher quality grades, even when it's not a steak. The benefits of recognizable brands might be even more apparent in the current market dynamics.
"Yeah, beef prices are high, we know that beef prices are going to be high for a little bit but we'll see some relief out in a couple years," Longo said. "But we've reached some levels that the consumers have never seen before. What gets overturned by using a premium cut is really the eating experience. Really understanding when they go into a better steak, a better quality steak. The eating experience and the customer comes away saying that was worth the money spent. So while consumers are focused on their budgets, ok, we're all budget conscious in all of our families, sometimes the eating experience will out way the monetary concern."
Both surveys and studies of recent economic downturns prove that point, according to Certified Angus Beef® (CAB®) brand Vice President Tracey Erickson.
"We know from research that consumers are willing to pay more to get the qualities they desire in beef," Erickson said. "In fact, what we see, even in economics where recession is taking place, or folks don't have quite as much to spend, is that there's a willingness in certain product categories to actually spend just a bit more to ensure that the eating experience is going to be there. And fortunately high-quality beef is one of those."
That signal makes its way back to cattlemen who act to produce more of the cattle that are in demand and it all starts when consumers vote with their pocketbooks.
"So folks are willing to put down a little bit more money at the meat counter and at the restaurant to get a product that they know is going to perform," Erickson said.
This video news is provided by CAB and the American Angus Association.
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