Pillars of Beef Chain Success

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1 Pillars of Beef Chain Success xecutive Summary: The 2011 National Beef Quality Audit lides courtesy of Dr. Deb VanOverbeke Executive Summary: The 2011 National Beef Quality Audit

2 Executive Summary: The 2011 National Beef Quality Audit National Beef Quality Audit

3 Executive Summary: The 2011 National Beef Quality Audit National Beef Quality Audit

4 Executive Summary: The 2011 National Beef Quality Audit National Beef Quality Audit

5 National Beef Quality Audit 5 th audit , 1995, 2000, 2005 and Audit-Three phases: Face-to-face interviews of feeders, packers, retailers, foodservice, government & allied industry In-plant data collection for slaughter and cooler characteristics & instrument grading data Producer beef quality/production practice survey

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7 Why conduct the National Beef Quality Audit?

8 Proactive solutions The simplest approach to getting out from under the weight of a problem is to identify it, face it and then solve it. Courage, determination and discipline are prerequisite to success.

9 PHASE I: MAJOR FINDINGS OF SCIENTIFIC FACE-TO-FACE INTERVIEWS Executive Summary: The 2011 National Beef Quality Audit Audit

10 Each Market Sector Defines Quality Differently, & This Appears To Be Caused By Incongruence In Economic Signals Which Contributes To Discontinuity In Messaging

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12 Top Three 1 Definitions By Quality Category When Answers Were Pooled Across Market Sectors? Food safety No detectable E. coli O157:H7 Tested for pathogens Produced in effective food safety environment Eating satisfaction Tenderness Flavor Customer satisfaction How & where cattle were raised Origin Animal well-being Feed ingredients Lean, fat, & bone Lean to fat ratio Quality grade Yield grade 2s and 3s Weight & size Carcass weights Uniformity in cuts Appropriate ribeye size Cattle genetics Primarily black hide Genetic potential for marbling Primarily British Visual Correct product color Amount of marbling Phenotypic attributes 1 Based on the number of times that each characteristic was mentioned as a response to the question.

13 Best-worst Scaling 1 : Ranking of Seven Quality Attributes Phase 1 Cattlemen s College Strategy Workshop Food safety Eating satisfaction Food safety Eating satisfaction Food safety Eating satisfaction How & where the cattle were raised How & where the cattle were raised How & where the cattle were raised Lean, fat, & bone Lean, fat, & bone Cattle genetics Weight & size Cattle genetics Lean, fat, & bone Cattle genetics Visual characteristics Weight & size Visual characteristics Weight & size Visual characteristics 1 Based on computed Shares-of-Preference derived from BW-Scaling questions.

14 Most Companies, In Each Market Sector, Suggested That Our Industry Is Not Transparent Enough & Does Not Do A Good Job Of Telling Our Story To The General Public

15 Strengths Of The U.S. Beef Industry 1 Retailers Foodservice Packers Feeders Food safety Product quality Promoting the industry & the image of the industry Product quality Food safety Marketing program Premium product Taste People how they care for the animals & land Quality product; wholesome Taste & eating satisfaction Government & Allied Industry Safe eating experience; consumer demand Research, technology, & innovation Food safety Food safety 1 Based on the number of times that each characteristic was mentioned as a response to the question.

16 Weaknesses Of The U.S. Beef Industry 1 Retailers Foodservice Packers Feeders Not telling our story Cost Variability Not telling our story Government & Allied Industry Too fragmented More concerned with exporting product than keeping it domestic Food safety Marketing Too fragmented Food safety Too fragmented/ Not transparent (tie) Consumer perception Too fragmented Not telling our story to improve image Lack of education & knowledge about our industry 1 Based on the number of times that each characteristic was mentioned as a response to the question.

17 Pillars of Beef Chain Success Executive Summary: The 2011 National Beef Quality Audit

18 Typical Week in 21 st Century Beef Packing Plant Shift Monday Tuesday Wednesday Thursday Friday A-shift U.S. cattle Non-hormone treated cattle Canadian cattle Age and source verified U.S. cattle B-shift U.S. cattle Mexican cattle Canadian cattle Branded beef program U.S. cattle

19 Slaughter Data Collection Locations

20 Types of Identification NBQA-2005 % NBQA Lot visual tag Individual visual tag Electronic tags Metal clip tags

21 70 60 Predominantly Black-Hided Cattle % NBQA-2000 NBQA-2005 NBQA-2011

22 % Brands No brands Butt brands Side brands NBQA-2005 NBQA-2011

23 No Mud and/or Manure on Hide % NBQA-2005 NBQA-2011

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26 % Carcasses Without Bruises NBQA-2005 NBQA-2011

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28 Condemnation Frequencies Product Liver Lung Viscera Head Tongue

29 Cooler Data Collection Locations National Beef Quality Audit

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31 Slightly Abundant 00 Moderate 00 Modest 00 Small 50 Small 00 Slight 50 Slight 00

32 USDA Yield Grades

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34 Certified and/or Marketing Programs: Cooler Assessment Percentage ASV A40 CAB Top Choice Natural NHTC Organic

35 Carcass Traits: Steers versus Heifers Fat thickness, inches Ribeye area, square inches Steers Heifers Carcass weight, pounds USDA yield grade

36 USDA Quality Grade Distribution by Sex Class: Cooler Assessment Steers Heifers Percentage Prime Choice Select No Roll

37 Carcass Traits: USDA Quality Grades Prime Choice Select 0.00 Fat thickness, inches 12.0 Ribeye area, square inches Carcass weight, pounds 1.4 USDA yield grade

38 Changes in Prime and Choice Over Time: Cooler Assessment 80% 74% 70% 60% 50% 55% 49% 51% 55% 61% Percentage 40% 30% 20% 10% 0%

39 NBQA-2011: Instrument Grading n = 2.4 X 10 6 Data collected from November 2010 to November 2011 every other month for one week (about 20 days worth of data overall per month) Multiple plants (n = 17) from multiple companies (n = 4)

40 Comparisons Between Cooler and Instrument Data Instrument Trait Cooler mean (n = 9,802) mean (n = 2,427,074) USDA yield grade Adj. fat thickness, in Hot carcass weight, lbs Ribeye area, in Marbling score Small 40 Small 50

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44 Phase lll: Quality Enhancement by the Seedstock, Cow/calf, & Stocker Sectors Results of a Nationwide Survey Executive Summary: The 2011 National Beef Quality Audit

45 The First of its Kind! Phase III Leveraged harvest floor & cooler audit data Incorporated data from producers (seedstock, commercial cow/calf, and stocker) as to how they influence beef quality

46 Survey Respondents 3,755 completed surveys (55% online; 45% written) 45 states represented 75% in the cow/calf segment (avg. = 192 cows) Years working in cattle industry: >10 yrs = 84% >25 yrs = 55%

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48 Definition of Quality Rank Definition Score 1 (T) Producing safe & wholesome beef (T) Raising cattle that are healthy High level of eating satisfaction (T) Cattle are free from defects (T) Cattle are profitable for you (T) Cattle are profitable for others (T) USDA Quality Grade 1.7 When you hear the term quality in relation to the beef industry, what comes to mind? 1 = Strongly Agree, 2 = Agree, 3 = Neutral, 4 = Disagree, 5 = Strongly Disagree

49 95% had some level of routine health protocol(s) they followed; yet, only 31% had this plan in writing **Producers need to document their efforts via record-keeping to assure consumers of their hard work

50 Pillars of Beef Chain Success Executive Summary: The 2011 National Beef Quality Audit

51 Eating Satisfaction Product Integrity Tell Story Executive Summary: The 2011 National Beef Quality Audit

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53 Total Quality Management $1 to Prevent Defect $10 to Fix Defect at Manufacturing $100 to Fix Defect for Customer National Beef Quality Audit

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62 Marbling Approximately 60% of all fed cattle harvested in the US fall between a marbling score of Slight 50 to Small 50 (Cargill, 2011) Slight 50 Small 50

63 Changes Since 2005 Strong cattle prices + Drought related cowherd liquidation = % Heifers

64 Changes Since 2005 Greater % A designation % A designation % A designation Annual increase of 1.6%

65 Changes Since 2005 Greater input costs Older, heavier cattle, fewer days on feed Corn ethanol by-products 20-30% DDGS tends to improve marbling

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67 Changes Since 2005 Zilpaterol hydrochloride + 30 lbs carcass wt - 30 degrees marbling Some 21 d tenderness differences

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69 Questions? Executive Summary: The 2011 National Beef Quality Audit Slides courtesy of Dr. Deb VanOverbeke