All things being equal, it still pays better for cattle producers and feeders to focus on the genetics that produce prime beef rather than branded programs.
That’s not to say branded programs don’t pay, because they do. It’s just that turning out prime beef pays better over time, if cattle producers are able to accomplish it.
Prime-graded beef is often juicier, more flavorful and more tender than other grades of beef and commands a higher price.
Since May of 2003, monthly USDA cutout data shows that prime values averaged $29.18 per cwt more than choice values. Over that same period, branded beef only averaged $5.44 per cwt over the value of unbranded choice beef.
PUSHING FOR PRIME IS DIFFICULT
However, breeding cattle to produce more prime beef is easier said than done.
There’s an old axiom that says “like begets like” so breeding cattle that exhibit a desirable trait would be more likely to produce offspring that have the desired trait. But any trait is the combined result of the genetic makeup of the bull and the cow, and even then, the desired trait may be the combination of several genes from each parent.
Internal traits, like the level of marbling in the muscles are impossible to see until an animal is slaughtered, and by then it’s too late to incorporate that animal’s genes into the herd. And even if it were possible, that animal may possess other, more undesirable, traits that would disqualify him or her from the breeding herd.
Once an animal is identified as having desirable carcass characteristics like marbling, the parents of that animal can sometimes be identified and other offspring tracked to see if these two parents are reliable carriers of the genetic potential for prime beef in their offspring.
Alternatively, producers can test the DNA of prospective bulls and cows for desired traits, greatly shortening the process of elimination among cows and bulls. However, misinterpreting the results is easy, often resulting in incorrect breeding decisions.
BRANDED PROGRAMS EASIER TO SEE
As a result, many branded programs are easier to see and target than trying to improve a herd’s genetics for producing prime-carcassed cattle. These programs either rely on the animal’s breed or on the way it was raised (grass fed vs feedlot finished, for example).
It is much easier and faster for producers to never use antibiotics on a set of cattle, document it and receive a premium for those cattle than it is to breed for heavier marbling over a period of years.
For that reason, cattle producers and feeders can be counted on to aim for various program benefits. Genetic improvements for marbling will take more time and likely will continue to hold the best premiums.
CASH CATTLE MARKET QUIET
Cash cattle markets, after trading $2 per cwt higher last week, were quiet Wednesday. Live-basis bids were heard at $145 to $147 per cwt with asking prices $151 to $152. Dressed-basis bids were posted at $232 to $233, with asking prices holding at $240.
Cattle last week sold at mostly $147 to $148 with some up to $149 live and $232 to $234 dressed.
The USDA’s beef cutout values Wednesday were higher, with the choice cutout at $235.21 per cwt, up $1.73 and select at $228.85, up $0.68. Volume was very heavy with 142 loads of fabricated cuts being sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Tuesday was $217.70, up $0.32, compared with Wednesday’s Aug settlement of $214.12, up $0.17.