Listen Up Youngsters: Target Consumer Demands02 December 2014
US - Listen to consumers and they will tell you what to produce, and at the moment it is quality.
Expectations are higher, matching beef prices, and this should be addressed.
Mark McCully, vice president of production at Certified Angus Beef brand, delivered this message at the National Block and Bridle Convention in Texas last month.
There’s more pressure than ever to deliver a great eating experience, and remember why consumers are buying beef.”
Even with the rise in costs, consumers are still purchasing beef as long as they’re satisfied with the meals, he explained.
“We’re not the cheapest protein out there, and when we spend a lot of money on a product or premium brand, we have a higher expectation level of how that product will perform,” Mr McCully said.
There are great opportunities for cattle producers, but the challenge is to think about the cowcalf business in a different way, thinking of what consumers want first, the CAB officer said.
“Our traditional way of thinking is we start at the ranch and think about the mother cow only, but when we look at the growth in the high-quality beef sector, the opportunities out there for a young person getting back into this industry are great,” Mr McCully said.
“I would suggest that, in addition to your focus on great cows, look beyond the commodity business to where there’s value added, and where there is a growth in demand,” he said.
“That’s clearly in the high-quality side of the beef market.” To keep up with that growing demand, he said producers may take advantage of the tools and technology available at the ranch for genetic selection. Value based marketing systems with targets like CAB incentivize producers to raise the best.
“Cattle that meet CAB specifications are simply worth more,” he said. “The increased value is translated into our feeding industry. Better genetics that can hit those targets on a consistent basis, they’re worth more. And feeders are willing to pay those dollars to the cow-calf producer.”
The shift to higher quality has changed the supply of premium vs. commodity feeder cattle. Most cattle are sold on a value-based marketing system today, and that has changed market dynamics, Mr McCully said.
Feeders and packers want more superior cattle and fewer commodity calves.
“Sometimes folks think the premium market is a really small, tiny, niche but today Certified Angus Beef makes up more than 15 per cent of the fed cattle coming through our feedlots and packing plants, and that has just continued to grow,” he said.
“We don’t see that growth slowing anytime soon.” Mr McCully emphasized the opportunities for young professionals entering the beef cattle business are at an all-time high, “but it’s an important reminder” that we have to meet consumer expectations first.