Data Imply Rising Beef Quality With Zilmax Removal

Every week over the last year, the percentage of choice grading beef carcasses has increased over the previous year, and the change can be tied to the removal of Zilmax from the diets of feeder cattle.

Zilmax, an FDA-approved growth promotant manufactured and sold by Merck Animal Health, was removed from the market a year ago over concerns about animal health, although there were no concerns about human health.

While Zilmax increased the amount of beef each animal produced within the last weeks just prior to slaughter, it was generally accepted that it also reduced the USDA quality grade.  In doing so, it also reduced the premiums paid to cattle feeders for choice or prime carcasses.  However, the pounds of beef produced more than made up for the loss of quality premiums.

The Livestock Marketing Information Center compiled data that showed that for the week ended Sep. 13, the percentage of cattle grading choice was 64.5%, up 2.3 percentage points from a year earlier.  Since Zilmax was removed, an average of 3.0% more carcasses graded choice in a range from plus 0.9% to plus 4.9%.

The data would imply that removing Zilmax from the rations increased quality grades, the LMIC said.  Further increases could be coming as steer carcass weights rise to record highs.

Increasing weights do bring more choice carcasses, but university studies show it is a poor substitute for good genetics.  Once the cattle are mature and have put on an optimal amount of fat, they have a declining tendency to deposit fat within the muscle, a desirable trait called marbling, and a greater tendency to just get fat.

But cattle are getting larger, reflecting current genetics, cheaper corn, higher feeder cattle replacement costs, currently lackluster fed cattle marketings and currently profitable fed cattle prices.  Most of these factors, however, are fleeting and will change with economic conditions.




While cattle feeders work toward producing more choice carcasses, shifts in consumer demand are causing adjustments in the USDA’s closely watched daily carcass cutout value.  The value is an index of the combined relative values of the seven primal cuts of beef.

The beef market demand profile is changing as consumers seek more affordable and available cuts such as those coming from the chuck or round.

A simple analysis of the change from 2006 to August of 2014 of the percentage of each cut to the total carcass cutout value showed the rib-to-carcass cutout value had decreased by 11%, and the loin-to-carcass cutout value had declined by 21%.  At the same time, the short plate-, chuck- and brisket-to-carcass cutout values increased 22%, 25% and 38%, respectively.

Market sources say those changes likely are in place long term.  Consumer attitudes are shifting, and the increase in the percentage of choice and prime carcasses allows them to make the switch and still have an enjoyable dining experience.




Boxed-beef prices were narrowly mixed Tuesday, with the USDA reporting its choice beef cutout value at $238.03 per cwt, up $0.01, and its select cutout at $226.45, down $0.38.  These prices remain below a week earlier when choice was reported at $239.17 and Select at $227.29.

The choice/select spread widened to $11.58 from $11.19 on Monday.  There were 181 loads of fabricated product sold into the spot market.

USDA data show the seasonal choice/select spread peak occurs the last week of November, but the market is following last year when the peak came in late September.

The CME Feeder Cattle Index for the seven days ended Monday was a record $233.66, up $0.22 from Friday.  By comparison, the Oct futures contract settled Tuesday at $235.42, up $0.77