Are we producing the highest-quality cattle ever in the history of this great industry? Well, “ever” is right up there with words like never or best, often subject to debate …
But it’s a fact that we are producing the highest percentage of choice and higher cattle since the USDA implemented the grade change in the mid-1970s.
Starting in 1976, we entered a 30-year decline in the percentage of prime- and choice-grading cattle.
Sadly, but not surprisingly, that was accompanied by a decline in beef demand that left the industry in a weakened state of decline.
Eventually, consumer demand signals for better beef started to make their way to the ranch, and quality grades ended that long slide in 2006 when barely half of fed cattle could grade choice or prime (51.7 percent).
Three years later, that had improved to 56.2 percent (Table 1). Researchers identified six reasons why that had occurred, ranging from management changes to genetics.
What is impressive is that since 2009 the industry has continued that upward progress to near the all-time high of 70 percent choice and prime grades in 2014.
As we proceed through 2015, the numbers keep getting better, reaching 73.2 percent choice and prime for the first eight weeks. That compares to 71.2 percent for the same period in 2014.
Not to be overlooked is how the percentages hitting prime and premium choice have improved. Historically, only 2 to 3 percent of federally inspected cattle graded prime, and by 2006 the percentage of black-hided, Angus-type cattle qualifying for Certified Angus Beef (CAB) had dipped to only 13.9 percent.
In 2014, the share of cattle grading prime exceeded 4 percent for the first time as an annual average, and CAB acceptance rates were at a record 25.6 percent, allowing continued sales growth of the largest beef brand.
Why has this positive trend continued? Some of the reasons identified in 2009 still apply, but several other circumstances are dramatically different, partially related to structural changes in the industry coupled with the impact of the devastating drought in many regions. Let’s examine these reasons in greater depth.
Higher cattle prices have changed how feedlots manage cattle
As cattle prices started increasing in 2005 and 2006, culminating in all-time highs in 2014 and 2015, feedlots had to adapt management practices. In the past four years, feeder calf prices have increased 129 percent while fed cattle prices were held to near 71 percent.
That rapidly widened spread in prices saw feedlots adjust by investing more time in existing pens to delay having to buy more expensive replacements.
The shift continued regardless of corn prices and resulted in live and carcass weights never seen before, more cattle sold on formulas or grids and extended days on feed, making cattle somewhat fatter.
Historically, fed cattle were marketed at a compositional end point of 0.52 to 0.54 inches of fat cover. With cattle being genetically different today, most can be fed to 0.6 to 0.65 inches of fat cover without excessive YG 4 and 5 problems.
The years of record-high corn prices moved more cattle feeders to sell on some type of grid or formula, now perhaps 75 percent of the market.
Their rationale is based on the high incremental muscle deposition compared to skeletal growth in the last 25 to 30 days on feed, again adding pounds.
The impact that added weight, additional fat cover and more days on feed can have on quality grade is pretty dramatic. A slight increase, just moving from 0.5 inches fat cover to 0.6 inches, results in a 4.4 percentage point increase in the share of choice and prime grades and a jump of 4.3 points in CAB acceptance, or up to 20 percent more cattle in those premium categories.
Drought impact
Starting in 2008, a persistent Southwestern drought began to spread throughout much of the U.S., leading to a sell-off in beef cow herds that reached a staggering low of 29 million cows by January 2014.
Because the hardest-hit region was the Southern Plains, the perennially number one cow state of Texas alone liquidated more than 1.2 million beef cows.
Historically, the southern side of the Great Plains region has produced lower-grading cattle, so it seems safe to assume many of the cows culled were some of those lower-quality animals.
Supporting this theory is the fact that grading levels at the Texas plants have shown the biggest improvement in the past five years – a 23.9 percent increase in grade compared to 2.7 percent higher for plants in Nebraska (Table 1).
Genetics for marbling
We have long known that marbling is moderately heritable with very few correlations to other economically important traits, allowing for genetic selection and progress. With the rise of grid marketing in the 1990s and virtually all grids featuring a quality grade premium, the economic importance of marbling has continued to grow.
Not surprisingly, seedstock producers noticed the priority placed on marbling EPDs by their bull-buying clientele and have responded to that demand.
Angus is the dominant breed in terms of the share of bulls turned out each year, with surveys generally indicating Angus bulls at about 60 percent of the total.
Evaluating the genetic trend line for marbling in the Angus breed, it is apparent that marbling potential in sires used (and by extension the commercial cow herd) is much greater than 15 years ago.
Table 2 illustrates how the percentage of Angus genetics can influence individual marbling and subsequent quality grade potential.
When producers start stacking genetics for marbling on both the cow and bull side, great progress can be made in quality grade. In 2005, research showed the impact stacking genetics can have in a herd in just two generations, using typical “Southern” cattle as a base.
Using a 40 percent choice and prime base, it was illustrated how this could be increased to 58 percent in the first generation by using a high-marbling Angus sire. In the second generation, a further increase to 70 percent could be achieved.
To give appropriate credit to other breeds, Simmental and Hereford rank as the two other breeds surveys say are most commonly used along with Angus.
These three breeds represent about 80 percent of all bulls turned out annually. Seedstock operators within both these breeds have put greater selection pressure on marbling, as shown by their trend lines in the past 10 years.
Another way to look at genetic trends can be seen in the degree to which we have “turned the U.S. cattle herd black.”
Today, 62 to 63 percent of all fed cattle are black-hided, but if we take Holsteins out of the fed cattle population and consider only native beef cattle, 75 percent to 77 percent of those are black-hided today, a trend line that has been fairly steady with 1.5 to 2 percent increases each year for 25 years.
Using the extensive Iowa Tri-County Steer Carcass Futurity data (Table 3), we see the dramatic difference in quality grade related to hide color.
Holstein impact
When we think of cattle feeding, we may forget the fairly high percentage of that mix represented by Holstein steers and heifers.
Traditionally, CattleFax data has suggested Holsteins represent about 15 to 17 percent of the total, but with the significant decline in beef cow numbers and the stable number of dairy cows, Holsteins have grown to nearly 20 percent of the fed mix.
Many do not realize the disparity in quality grade between Holstein fed cattle and the native beef cattle, or wrongly assume the former do not grade well.
Data from the industry’s National Beef Quality Audit has shown that Holstein steers and heifers typically have a 15 percentage point higher incidence of prime/choice carcasses than those of their beef contemporaries (Table 4).
That’s why, as Holsteins represent a higher percentage of the fed cattle mix today, some of the increase in quality grade must be attributed to the “Holstein effect. 
- Larry R. Corah
- Vice President
- Certified Angus Beef (retired)
