CAB Has Helped Change Beef Industry, Says Randy Blach, CattleFax CEO

Cattle Fax CEO Randy Blach says the Certified Angus Beef brand "has changed the course of the entire industry." ( Greg Henderson )

The Certified Angus Beef brand “has changed the course of the entire industry,” Cattle Fax CEO Randy Blach told attendees at the Certified Angus Beef Convention in Maui, Hawaii, Friday. Specifically, Blach noted beef demand was in decline from the 1980s to 1998. By the end of the 90s, beef demand had begun to turn higher, driven in large part by the production of higher quality beef products such as Certified Angus Beef.

By the middle of the decade of the 2000s, Blach said cattle grading USDA Choice and Prime totaled about 55% of all cattle harvested. By 2018, carcasses grading Choice and Prime totaled nearly 80%. That helped drive increases in Certified Angus Beef sales to the record 1.215 billion pounds in the fiscal year ended in September.

Blach said the increasing number of carcasses grading Prime has led to declining price spreads between CAB and Prime, but, “that represents an opportunity” for the retailers and food service businesses in attendance at the 40th Anniversary Convention for CAB.

Increasing consumer incomes have led to increasing consumer expenditures on beef, “and they are spending on quality beef,” Blach said.

“If demand had not grown in the last 20 years, consumer spending on beef would be $17 billion smaller. That means the price of fed cattle would be about $20 per cwt. less, or roughly $270 per head,” he said.

Similarly, Blach said the value of exports per head of American fed cattle produced has increased significantly. In 2015, he said, exports accounted for $333 of the value of a fed steer. By 2018 that value per fed steer had increased to $355.

“Without exports, American consumers would need to eat an additional 41 pounds of red meat and poultry to consume all we produce,” Blach said.

Blach cautioned that production of beef pork and poultry would increase the next couple of year, and the demand would need to remain strong to support prices. He projected per capita red meat and poultry production would exceed 220 pounds in 2019 and 2020.