A Weighty Issue

By: Loretta Sorensen

216pg8It’s no secret that hot carcass weights (HCW) have been on an upward trend for the past 40 years, with an overall HCW average that’s 200 pounds more now than in 1960. From 2008 through 2012, Angus-influenced cattle weights increased 34 pounds, to last year’s 846 pound HCW. Just what’s driving the trend and exactly how it’s affecting the industry and end-users isn’t yet fully understood.

Sean Walter at Professional Cattle Consultants says there are both positive and negative impacts of increased HCW.

“Feedlots have found that adding extra carcass weight – even with record high corn prices – improved over-all profitability. And when they are losing over $100 per head that’s important,” Walter says. Recent statistics show that the most profitable pens had the heaviest carcass weight. The value of the additional weight gain more than offsets the discounts for the heavy carcasses. The cut-off weight where discounts are applied is 1050 pounds now for many grids which is 150 pounds heavier than it was just a few years ago. That has let feeders increase average weights without having too many discounts.”

Packers experience both positive and negative impacts from HCW. They can spread costs across a heavier carcass, unless that carcass is so large it slows down the production line. Boxing larger beef cuts can also pose problems.

“When that beef gets to the retailer, they want uniform units so they can standardize prices,” Walter says. “If there’s a lot of variation in sizes, it causes presentation problems for restaurants and food service companies.”

Certified Angus Beef (CAB) president, John Stika, says managing heavier boxes of beef also impacts retailers.

“Retail doesn’t use a lot of forklifts,” Stika says. “There are limits on what those boxes can weigh.”

One positive aspect of increased HCW in relation to shrinking U.S. beef herd sizes is that heavier carcasses made up for 256,000 head of cattle between November 2012 and March 2013.

“Even if they’re struggling with how to present larger beef cuts, retailers would rather have the larger beef than no beef,” Stika says.

Herd genetics may be playing a role in the HCW increase. Cow sizes have increased and decreased, while steer sizes have continued to climb. Walter notes that genetics have recently trended toward larger cow sizes, a change he expects will continue for some time.

“That could result in even larger steer sizes in the near future,” Walter says.

Stika points out that along with increased HCW, beef quality scores are trending higher, too.

“CAB data and supporting records from the NBQA (National Beef Quality Audit) show that cattle with a marbling score of Modest or higher were 14 pounds heavier than average in 2012,” Stika says.

For the time being, the profits beef producers realize on HCW outweighs concerns packers and retailers are finding with larger cuts of meat. Stika expects the prospect of increased overall profit will motivate beef producers to continue feeding steers to the higher weights until the supply/demand balance tips in another direction.

“Historically, we see an increase in HCW about every other year,” Stika says. “That has held true in 2013, when HCW averages remained steady. In recent years we’ve seen about a five-pound increase each time. With improved genetics and cattle health, I think we’re naïve if we don’t expect to continue to see that much of an increase each year.”

So how will increasing HCW impact the beef industry?

“I don’t think it’s an issue yet,” Walter says. “We’ve met with several segments of the beef industry to discuss the trend and what it could mean to packers and consumers. If cattle continue to get larger every year, it could be a potential problem.”

Stika believes beef industry leaders will need to engage in creative strategy in order to satisfactorily meet consumer demand in light of the reality of larger carcass sizes.

“As carcass sizes grow, the range in product differences will grow,” Stika says. “We’ll need to find a way to resolve packer logistics and inventory management if want to continue to drive beef demand forward.”   

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