In response to a March issue guest column likening the use of β2-agonists (i.e., Zilmax®) to the end of beef demand (“Does anyone smell smoke?” page 74), I offer beef producers another perspective.
Certified Angus Beef ®(CAB) is without question a great marketing program for the beef industry, and I appreciate the passion and fervor of its supporters. CAB has increased the value of black-hided feeder cattle over other cattle (up to $30/calf) and is largely responsible for the conversion of many non-black-hided breeds to become black-hided breeds.
When a CAB carcass is sold on a value-based grid, the producer currently receives a $25/carcass premium (assuming an 800-lb. carcass). However, on an industry basis, only 16% of black-hided cattle qualify for the CAB brand, which dilutes the net return per carcass to $4; a deficit of $26/black-hided steer or heifer that has to be made up via means other than CAB premiums.
A profitability-driven business
It's important to remember the beef industry is a profitability-driven business. If you're in this business solely for marbling, you will have a difficult time convincing your banker you need to feed cattle to a marbling standard because it's the right thing to do for our industry.
With increasing feed, energy and other input costs, we need to remember that feeding to Choice, much less premium Choice, may not maximize net revenue. Also, realize that a portion of our cattle population will not grade Choice regardless of the use of any growth technology, nor do all retail and foodservice markets have the consumer demand for USDA Choice and Prime beef. Many consumers actually prefer USDA Select for its price and leanness attributes; be thankful for Wal-Mart and all other Select retailers.
Furthermore, if all cattle graded USDA Choice, then Choice would be meaningless. We need market differentiation to meet individual consumer demands; it also allows beef to further differentiate from other protein competitors.
As I write this column in early April, Select Yield Grade (YG) 1 carcasses are premium to Choice YG 3 carcasses by 25¢/cwt. I need not tell you which is more efficient to produce.
The quality perceived by the consumer for a CAB steak is economically undermined by the trimmable waste — inter-muscular, subcutaneous and internal fat — that accompanies an increase in intramuscular fat. Market signals agree; YG 1 carcass premiums currently exceed CAB premiums.
As a scientist who has investigated the effects of feeding Zilmax, I have firsthand data and experience on the value it creates for the entire beef chain. Feeding Zilmax for 20 days increases dressed yield 1.4%, adds 30 lbs. of hot carcass weight, doubles the number of YG 1 and 2 carcasses and halves the number of YG 4 and 5 carcasses. It also minimally affects Quality Grade by decreasing marbling score 2.2 degrees (i.e., Small 62 to Small 40).
Collectively, these attributes add an additional $40/carcass for feeders who sell on value-based grids. Zilmax also increases fabrication yield 1.5%, creating new value to the beef processor of $60/carcass. The combined value created by Zilmax adds $100 to the beef-industry chain.
A focused use
Zilmax isn't a product that will be fed to all cattle, for any number of days, via any marketing method. To capture Zilmax's value, producers must manage it; feeding it per Intervet's recommendations. Feed it to the right cattle (cattle that can benefit from added carcass pounds and improved cut-ability) for the right time (20 days) for the right market (value-based grids).
Even CAB can benefit from the right cattle being fed this technology. Feeding Zilmax to fleshy 51% black-hided cattle that grade well could improve CAB acceptance rates by reducing the incidence of carcasses with greater than 1.0 in. of backfat. Moreover, the producer will receive the CAB premium on an additional 30 lbs. of carcass.
Don't be fooled by the smoke and mirrors. Investigate new technologies. Set aside your emotions; do the math and determine on your own whether growth technologies work in your operation.
Zilmax is simply another tool to help beef producers supply dynamic consumer demands and sustain long-term industry profitability. This is vital to keeping beef the center of the plate; not only at high-end restaurants, but on every dinner table in America.
Ty E. Lawrence, Ph.D., is an assistant professor of animal science and director of the Beef Carcass Research Center and Meat Laboratory at West Texas A&M University in Canyon. He is among a team of researchers who have conducted post-approval research into methods to maximize the value of Zilmax®throughout the beef chain.