North America’s high-quality beef
(Article by Steve Kay)
The Canadian and U.S. beef industries have much in common. In fact, their markets for both cattle and beef are more highly integrated than anywhere else in the world. They have another thing in common that no other beef-producing country has. They produce the highest-quality beef in the world and more than any other nation.
Canada at any one time has between 1.3 million and 1.5 million cattle in feedlots on a largely grain-based diet. The cattle that were graded for quality graded 69 per cent AAA or Prime in 2020, with the Prime number being 3.5 per cent. These two grades are similar to those in the U.S., but AAA is regarded as more stringent than USDA Choice.
In comparison, the U.S. industry currently has 14.7 million cattle in its feedlots. It harvests approximately half a million fed steers and heifers per week. Despite these huge numbers, there is a carcass uniformity and quality today that could only have been dreamed about 20 years ago.
For example, cattle in the week ended February 20 graded a combined 86.07 per cent USDA Prime and USDA Choice. Cattle graded 11.73 per cent Prime and 74.34 per cent Choice. This broke the previous record of 84.76 per cent set the week ended February 10. These exceptional percentages reflect extra intra-muscular fat or marbling in carcasses (in the 12th rib-eye). The increase over 20 years has also coincided with a huge decline in exterior fat on carcasses.
The U.S. has long been the producer of the most grain-fed beef in the world. But the beef suffered from a lack of uniformity in the 1980s and 1990s. The remarkable improvement in its quality and consistency over the past 20 years changed all that. It also cemented the U.S.’s position as the global leader in the highest-quality beef. Many factors have gone into the transformation, including improved genetics, scientifically advanced cattle-feeding practices and financial incentives by processors to encourage producers to raise the carcass quality of their cattle.
USDA Prime beef used to be impossible to find in grocery stores, as a meager supply all went to white-tablecloth restaurants. But with three times as much Prime percentage-wise being produced as 10 years ago, it can be found in many stores around the country. Warehouse giant Costco remains by far the largest seller of USDA Prime and was a big reason why more Prime is being produced.
Now consider how retail beef prices compare to the price of other proteins. So far this year, retail beef demand and sales have been stellar, even though retail prices in January were slightly higher than in December. USDA’s retail Choice beef price averaged US$6.41 per pound, up 1.9 per cent from December’s US$6.29 per pound and up 5.8 per cent from January last year. USDA’s All Fresh beef price averaged US$6.29 per pound, up 1.0 per cent from December’s US$6.23 per pound and up 5.9 per cent from January last year. Pork average prices were the same as in December at US$4.12 per pound but were up 7.3 per cent from January last year. Chicken average prices edged up two cents to US$2.03 per pound and were 8.6 per cent higher than last year.
This meant the All Fresh beef price was more than three times higher than the average chicken price and 1.5 times higher than the average pork price. These price differentials have rarely changed in recent years, apart from at the height of the impact of the COVID-19 pandemic on prices last spring. But it again reveals that beef remains Americans’ favourite meat by far and they are prepared to pay up for it because of its high quality.
(Photo Source: Canada Beef Inc.)
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