Beef Buzz News
Beef Quality Increase Has Led To Higher Profits For Beef Producers Says CattleFax CEO Randy Blach
Tue, 01 Sep 2020 13:05:10 CDT
The trend to produce high quality beef has led to more profitability for producers says Randy Blach, CEO of CattleFax, a global leader in beef industry research, analysis and information.
Ron Hays Beef Buzzes With Randy Blach
Blach was a featured speaker at the recent virtual Feeding Quality Forum sponsored by the Certified Angus Beef program.
There has been a remarkable quality shift in the last 15-20 years which has boosted demand, he said.
This is the reality of what's going on in the industry, Blach said.
We have basically taken an industry that was producing 50 to 55 percent of choice or prime (in 2005) to 82 percent this year, he said.
That takes us from 11.5 billion pounds of choice and prime in 2005-6 to over 18 billion pounds this year.
Three or four years ago there was concern that we would produce too much quality and not generate enough premiums, Blach said.
That has not happened as consumers have said they prefer the higher quality beef. This demand push has led to a dramatic increase in profitability for beef producers.
From 1980 to 1998 our average profitability was $32 per head, Blach said.
The low profits sent more than 400,000 producers away from the industry, Blach said.
The CattleFax CEO said over the last 20 years we have increased profitability to an average of $249 per head.
This is a powerful story as there is a lot more money in our industry today, mainly driven by demand, Blach said.
He wants to make sure all segments of the industry share the profits.
Price discovery is important, but it is also important to produce the right product, he said.
This is an issue here in our industry and we need to send signals to our producers to produce the good stuff that consumers are willing to pay for, Blach said.
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