On the sidelines of the American Angus Convention in Ft. Worth, Texas, Senior Farm and Ranch Broadcaster Ron Hays spoke with Nevil Speer, a beef industry consultant and influential columnist. Yesterday, they covered several topics from herd rebuilding to the positive side of extended droughts. Today, they are discussing the heightened quality of modern beef.
“It is just amazing what has happened over the last ten years,” Speer said. “That is what causes the return of the customer. We have more upper two-thirds choice, more prime; we all have learned to like marbling. It has really made a difference in terms of consumer acceptance and that is what gives us pricing power and drives dollars.”
He emphasized how every dollar in the beef industry comes from the consumer, so the product produced must invoke demand from consumers.
“One thing we have to remember is that there is more equity at risk in this business than ever,” he stated. “This is a big dollar business, and we need to keep that in mind.”
Hays brought up the USDA’s proposal to level the prices of all cattle with no premiums, but Speer defended the industry’s market-oriented approach describing the value of grid marketing. He said, “Grid marketing is what began to allow us to separate the value of cattle, and ultimately because it was in response to consumer signals. It is what allowed cattle producers to get closer to the consumer and get paid accordingly. Any effort to undo that would unravel all of the gains we have made with the consumer.”
He emphasized the $1,300 difference from the top-priced cattle and the bottom-priced cattle and how different individual animals are. He was in accordance with different prices for different animals being very justifiable.
He related that consumers are just as varied, with different price/value drivers. While demand for a quality product is the most common factor, getting beef into the hands of the consumer is a very complex business when considering things such as shopping experience, how to categorize beef, and determining price points.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
