More Machines, More Choice
Mar 23, 2009
By Steve Cornett
The market analysts last week were struck by the remarkable lack of divergence between Choice and Select beef prices and, interestingly, they seem agreed that one of the biggest factors is the use of mechanical grading.
You’ll recall that last year, after much prodding by the National Cattlemen’s Beef Association, USDA finally approved the use of machinery to replace human eyeball graders. The goal was to make grading more predictable and “fairer.”
If that is what has happened, it looks like a lot of cattle were under graded in years past—and the more high quality cattle in the mix, it looks like the further off the humans were.
It is just about what I expected would happen when we got rid of those subjective human eyeballs. It’s like looking at pretty girls. If you’re grading a Miss America contest (and who among us hasn’t?) you see so many pretty girls that your eyes get jaded. You get to thinking some darned pretty girls are average. I’ve heard people say it.
Having at one time or another watched carcass lines in plants in all three states, I figured the guys up north might be a little spoiled. They get one after another of those fancy European and British cross cattle that originate on professional cattle outfits.
Head farther south and there are more cattle bred to produce in the heat, if you get my drift, and born on places where their primary role is weed control. Not all, of course. But a percentage.
I really thought grades might decrease down there because I figured the human graders might get to where they thought anything with a fleck of white was surprising.
It wasn’t that bad, of course.
Still, the percentage of cattle grading Choice is running several points over historic averages—despite the use of more products designed to pour on muscle at the (in some cases) expense of marbling.
Don Close at Texas Cattle Feeders noted last week that the percentage of Choice cattle in Nebraska has run 71.7% this year, compared to a long-term average of 61.47%. In Kansas, Choice cattle have jumped from a “normal” of 48.51% to 61.41%, and in Texas the historical 45.6% has moved to almost 51%.
Which is nice for grid marketers, I suppose, except that it means thousands more Choice cattle in the mix each week, and thus reduces the value of breeding and feeding to the high quality end point, at a time when consumers are less interested in quality than price.
So there’s one, and maybe the biggest, reason for the spread being historically narrow as we approach the summer grilling season.
Of course, a lot of the many, many culling decisions the last few years have been influenced by grids that reward Choice cattle. And the cattle are still getting bigger, which to the extent it means older, I suppose would enhance marbling. So I guess cattle may just be grading higher.
But I suppose—if only because I tend to suppose what the smart guys tell me is so—it has more to do with the change in grading technique. To that extent, I guess we may be looking at a long-term mitigating effect on the relative value of good-eating beef steak.
I’m not sure that’s all good, are you?
Steve Cornett is editor emeritus at Beef Today. You can reach him via e-mail at firstname.lastname@example.org.
|This column is part of the Beef Today Cattle Drive e-newsletter, which is delivered to subscribers biweekly and includes beef industry analysis, market information as well as the latest beef headline news. Click here to subscribe.