June 2, 2000

Change means
opportunity for cattle industry

Second of two part series

By Lana Robinson
Field Editor

During a recent talk on expected changes in the food production system over the next decade, and related opportunities for cattlemen, Dr. Harlan Ritchie, Extension beef specialist at Michigan State University, emphasized the industry’s need to satisfactorily address the tenderness issue. Speaking to a group of producers at the Heart of Texas Cow-Calf Clinic in Brownwood, Ritchie said toughness has been identified as the number one problem regarding beef’s quality. To date, degree of marbling (USDA Quality Grade) is the best indicator for tenderness. Depending on the particular research project reviewed, however, marbling accounts for only 5 to 30 percent of the variation in beef tenderness, indicating the need for a more precise way to assess tenderness.

“A Warner-Bratzler shear force test could offer the precision needed,” Ritchie suggested. “Scientists at U.S. MARC have devised a semi-automated system to do in-plant shear force on cooked rib steaks from beef carcasses. However, it is not yet rapid enough to operate at line speed in large plants. Texas A&M is currently conducting research on a system to evaluate tenderness in fresh beef.”

Ritchie further noted that Research at Colorado State showed that compared to top sirloin steaks aged for only three days, aging for 14-21 days plus high voltage electrical stimulation reduced the incidence of toughness from 54 percent to 19 percent. An even further reduction to 5 percent could be achieved by using the top 25 percent of sires evaluated for tenderness.

“This study demonstrates the power of genetics in minimizing the probability of a tough steak,” Ritchie observed. “In line with this work, NCBA’s Beef Promotion Operating Committee on May 28, 1998, approved a three-and-a-half-year project, entitled ‘Carcass Merit Traits: Development of EPDs and Genetic Marker Validation.’ EPDs for tenderness will eventually evolve from this project. In the meantime, it behooves the industry to implement those cost-effective pre- and post-mortem strategies that are known to reduce toughness.”

Food safety will remain an important issue going forward, said Ritchie, noting recent setbacks related to E.coli contamination. As a result, he said beef processors have become very proactive by implementing post-harvest strategies that can reduce the risk of foodborne illness. Though it has been approved, Ritchie says it remains to be seen whether irradiation will be widely adopted.
“Now, and in the future, the industry will be facing numerous environmental issues, including public and private land use, water use, water quality, air quality, endangered species legislation, global warming, as well as other issues. It will be important for the industry to direct resources towards taking a firm stand on these issues,” he warned.

Ritchie expects to see the trend toward branded beef products and the creation of more easy-to-prepare products using hard-to-sell cuts to continue. He praised the industry for recent advancements in this area, but lamented the fact that beef is having to play catch up competing meats.

He touched on biotechnology, such as cloning, the production of trans-genic animals for harvesting of organs that can be transplanted into humans, and other possibilities.

“Today we can test for black color. Tomorrow, marker assisted selection will enable us to identify economic trait loci (ETLs) for various economically important traits such as growth, muscle, tenderness, etc. After several decades of waiting, we will eventually have a commercially feasible means of producing sexed semen. Gaining public acceptance of biotechnology through education is vital,” he said.

Market targets defined
A major question that emerges from the debate on industry structure is, “How and where will price discovery occur as the industry becomes more concentrated and coordinated?”

Ritchie said as the value-based marketing system that has just begun to form matures, it will call for the following: 1) A clear definition of specific market targets for live cattle; 2) A carcass I.D. and data transfer system from packer back to producer; 3) Accurate characterization of biological types for specific targets; and 4) Sorting of cattle with a specific target every time cattle are sold, rather than selling on the average.

Four primary market targets seem to have emerged for U.S. beef : 1) Retail beef that is High Select to Low Choice. Must have acceptable eating qualities. This product will make up about 50-55 percent of the market; 2) Mid-Choice or higher beef for the upscale domestic trade and for export. Must have superior eating qualities (tenderness, juiciness, flavor). Future demand for this product will be approximately 25-30 percent of the market; 3) Young, extremely lean beef that has acceptable tenderness; about 15-20 percent of the market; and 4) Other niche markets, such as organic or natural; approximately 5 percent.

Ritchie said in the future, high-value “reputation” feeder cattle will have several years of feedyard and carcass data behind them; will have been sired by a known bull battery with proven performance and carcass traits; and will be pre-designed and managed for a specific targeted market.

“To ready ourselves for this kind of future, I would encourage individual cow-calf producers to retain ownership on a representative sample of your calf crop and have them fed out to see if your genetics are up to speed in feedlot performance and carcass traits,” he said. “However, we must not lose sight of other critical factors that impact profitability.”

Profitability factors examined
In reviewing SPA (Standardized Performance Analysis) data from Cattle-Fax, the factors that generally characterize high profit cow-calf herds are as follows: 1) Do a consistently good job of controlling costs without jeopardizing cow herd productivity or gross income; 2) Have consistently lower feed costs, especially harvested feeds; 3) Purchase good bulls; and 4) Have sound herd health programs.

In contrast, low profit herds generally have :1) Consistently higher costs, especially feed costs; and 2) Lower weaning percentages and lighter weaning weights, but not always.

“Economic analyses suggest that for cow-calf herds selling calves at weaning time, the relative weighting should currently be approximately 50 percent on reproduction traits, 25 percent on growth traits, and 25 percent on end-product traits. However, these weightings are subject to change as the structure of the industry changes,” the beef specialist pointed out.

Ritchie said the cattle that invariably make the most money in a feedyard are those that gain the most weight, in the shortest period of time, on the least amount of feed.

The argument can be made that carcass characteristics have not had as much influence because there has not been as much variation in carcass value as there is in gain and feed conversion.

The Extension beef specialist said in a six-year analysis of factors affecting profitability of calves in the Oklahoma Steer Feedout, medical cost ranked first. The Texas Ranch-to-Rail Program revealed that in 1997-98, there was a difference of $65.39 in net return per head between calves that stayed healthy and those that were treated for sickness.

A revealing analysis of Cattle-Fax data recently sorted each of three production sectors (cow-calf, feedlot, and carcass) into the highest 25 percent and lowest 25 percent in profitability. The range in profitability within each of these sectors was $173, $84, and $40 for cow-calf, feedlot, and carcass, respectively.

“This suggests that the greatest opportunity for changing industry profitability currently resides within the cow-calf sector, the least within the carcass sector, and the feedlot sector intermediate,” Ritchie concluded.