CASE-READY BEEF IS COMING

           It didn't take long, hanging around the 2001 Annual Convention of the Texas Cattle Feeders Association this weekend in Dallas , to get a clear sense that cattle feeders are focused on the future of their industry.  From session speakers to hallway buzz, the topic of conversation was the transition occurring in the cattle industry and how to adapt, adjust and take advantage.

            Adapting and adjusting are key concepts, according to a group of panelists who looked at the phenomenon of case-ready beef and the effect it will have on various segments of the beef production chain.  "I think people have largely looked at case-ready as though it were simply a packer business and we aren't really involved," said panel moderator Bill Mies of College Station . 

But Mies, recently a professor at Texas A&M University and now with the alliance Future Beef, encouraged cattle feeders to become a student of history.  "Look at the changes that boxed beef brought to our industry as we moved away from carcass beef and we can begin to estimate that there will be some rather significant changes as we move to case-ready, as well."

And Mies told cattle feeders that the industry is definitely moving toward case-ready beef.  "The retailers are going to drive it, because it lessens their liability on food safety, and economics are going to drive it, because it will cut costs.  When you get economics and liability on the same side of the ledger sheet, it's usually going to make anything go."

And, the panelists all agreed, when it goes, it will fundamentally affect every segment of the cattle industry. 

At the seedstock and cow-calf level, one of the big ticket items is multiple trait selection, according to Sally Dolezal, a cattle breeding consultant from Derby , Kan.    Case-ready product will mean the beef industry will have to look at economically-important traits in a different light and the benchmark will shift toward traits that affect consumer acceptance.  "You'll have to know the balance of traits and how they work in the cow herd and target those toward your ultimate customer."

Who is that "ultimate customer?"  The consumer.

Dolezal admits that puts some extra pressure on the cow-calf producer in making genetic and management decisions, "but we're fortunate that beef carcass traits are highly heritable.  So whether you're dealing with marbling or carcass weight or retail yield percentage, you're dealing with traits where selection can be highly effective."

That means individual merit will become very important and management and genetic selection will have to be done with considerably more data than is used now. 

"We're really moving out of the mainstream of commodity production," she emphasized.  "One way to think about it is, today we manage on averages.  Futuristically, we're going to manage individuals and that is going to influence what data we collect and how we use it.  And it's going to tie to the genetic tools we have, as well." 

Dennis White agrees.  White, a stocker operator and cattle feeder from Ninnekah , Okla. said the stocker segment of cattle production will change significantly as case-ready beef becomes the norm.  "The business is evolving and these branded programs, whether they are case-ready or precooked beef, will take the stocker business to a different level in terms of management verification.  We're going to have to have a much better head for the stocker business in terms of having standardized processes in place that can be verified."

There will likely be more vertical agreements between stocker operators and their feedyard customers in terms of identifying the kind of cattle that will fit a case-ready program.  "The stocker operator will then be in a position to put those kind of cattle together," he said.  "I think that helps the whole chain of communication.  The outliers are obviously still going to go somewhere, but they'll be heavily discounted." 

Grouping cattle into uniform lots for the feedyard will soon become the table stakes for the stocker operator, he said.  "Whether he sells them, does it for somebody else or feeds them himself to take advantage of a marketing opportunity, that's going to happen." 

And when it does, feedyard operators will be better positioned to provide consistent, uniform sets of cattle to the packer, according to Dan Hale , Extension meats specialist with Texas A&M University .  And consistency will mean more than just cut size, he says.  "Consistency of color is going to become much more important."

Hale believes that case-ready will accelerate in the next few years and agrees with Dolezal that it will change the economic benchmarks that cattlemen use.  "The feeder will have much more information that just the yield grade on a pen of cattle.  If packer can get the information systems developed, they're going to go to a retail product yield system" instead of evaluating carcass performance on a whole yield grade basis. 

That will affect cattle feeders significantly as grid marketing moves to the fore.  "The grid will actually become much, much larger, more fully developed and ultimately give greater premiums and discounts based on retail product yield." 

In effect, it will change how the base price of cattle is developed.  "As case-ready grows and gets a higher percentage of total beef dollars, that will impact the industry by having a new basis that we'll work from-instead of live cash price, we'll work off the end product going out the packing house." 

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