Beef Quality Corner -- What is Quality to the Beef Industry?

Livestock Update, December 1999

Bill R. McKinnon, Extension Animal Scientist, Marketing, Virginia Tech

When the term "quality" is mentioned in the cattle business thoughts automatically turn to concerns of marbling or other measures of carcass merit. The industry needs to adopt the concept of total quality management. In its largest sense, quality is the result of each production sector doing an effective job that results in the consumer dollar being distributed efficiently to each segment in proportion to the value they contributed to the product. Lack of quality results in product defects or inefficiencies that siphon off dollars that would otherwise come back to producers.

The source of many quality defects must be laid at the cow/calf producers' feet. The cow/calf producer manufactures the feeder calf which is the raw product to which other production sectors must add value. The genetic package put together by the cow/calf operator can be the root cause of several quality defects that the succeeding production segments cannot undo. Feeder cattle outside of the 5 to 6 frame score or "Medium" to lower half of the "Large" frame feeder cattle grade simply produce carcasses outside the mainstream of market demand. Extremes in frame size either produce carcasses that are discounted or are harvested too early or too late to produce an optimally finished carcass. Light muscled cattle fail to produce enough lean product for each unit of production and hence are discounted as feeder cattle. While adding muscle to their feeder cattle, producers must still provide some potential for marbling within the genetic package. While designing the genetic package, the cow/calf breeder must also continue to make growth a critical consideration. Cattle that fail to make rapid and efficient growth cost both the cow/calf and the feeding sectors. The typical cattle feeder aims the price he pays for calves a little low to offset the potential risks in the genetic package he is buying.

Once the cow/calf operator designs the optimal genetic package, it must still be managed correctly for the calf to represent a quality product. Amazingly, one study estimates that 70% of male feeder calves in the southeastern U.S. are marketed as bull calves. Bull calves are discounted because the buyer must both castrate the calf and suffer the set back from late castration when the job could have been handled more simply by the cow/calf producer. Horned cattle present the same discount situation as bull calves that the total quality management concept would dictate should be handled by the cow/calf sector.

The cattle feeding sector also bears a heavy responsibility in maintaining quality. The current structure of the industry with a huge portion of cattle being finished on a custom feeding basis lends itself to two practices which are having devastating impacts upon quality and efficiency. Because the commercial feeding sector is in the business of selling feed and pen space, the practices of selling the whole show list "on the average" live price and selling a whole pen instead of sorting the pen of cattle for sale fail to reward quality. Both practices send erroneous signals throughout the industry while failing to market a high percentage of cattle at their optimal endpoint. The uniform pens of cattle with carcass merit subsidize the price of pens of less uniform, lower quality cattle. As more finished cattle are marketed on a carcass value basis, there will be a stronger incentive to produce cattle with improved carcass merit and then market them at their optimum endpoint.

The packing sector is the critical third leg in maintaining quality. Obviously, packers are under immediate pressure to avoid contamination in beef products. Processing plants spend tremendous effort and expenditures toward avoiding bacterial contamination and providing their customers with a safe product. One lapse in diligence can mean huge financial losses for that corporation while sending repercussions through the whole industry.

The whole beef industry depends upon the packing sector to look beyond the next quarter's profit to make some investments to enhance long term position of beef. The price signals the packer sends are the quickest means of ushering change and improving quality and consistency throughout the industry. The packer can almost single handedly effect this improvement by leading the industry to a value based marketing environment.

There are several factions within the beef industry that have an interest in maintaining the current lack of quality and level of inefficiency. They have found an economic niche in either adding value to cattle mismanaged by others or by selling inferior cattle at average prices.

Until the nation's beef industry adopts a total quality mindset, it is vulnerable to continued loss of market share and fewer consumer dollars. The continued inefficiencies will mean reduced dollars available to go directly to producers.

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