Consumer-based programs listed in the “BEEF Alliance Yellow Pages” reflect the overall evolution of industry structure. While the numbers flowing through these alliances are increasing slowly over time, fewer alliances are accounting for more of the cattle.
Of the 15 alliances reporting this year and in 2000 — either by the same name or as the same entity under a new name — 11 reported cattle numbers in a way that can be compared. In 2000, these 11 accounted for 957,980 head of the 1.5 million reported by 21 alliances that year — about 63.7%. These same 11 alliances account for 1.8 million head of cattle in 2007, out of 2.1 million reported by 16 alliances — about 85.7%.
Keep in mind, no alliance listing is comprehensive. The BEEF listing has included 55 different alliances over the years, as many as 36 in 2001 and 2003; as few as 27 this year and in 2005. Of these, 13 were part of the listing in both 2000 and this year.
When these “Alliance Yellow Pages” began, some alliances chose not to be included for one reason or another. Similarly, some that chose to be listed elected to share little specific information, such as cattle numbers and premiums.
Consequently, this listing doesn't represent all cattle involved in alliances. But the alliances that are listed and willing to share such information account for enough critical mass that they serve as a barometer of overall alliance growth and interests.
Unsurprisingly, specifications have increased over time, becoming narrower in some programs for such things as genetics and carcass performance. Whereas some alliances merely specified a preference for British genetics in the beginning, many now specify at least 50% Angus; some go as far as requiring a certain percentage of cattle to grade Choice. One has even moved beyond the breed question to basing its program on bio-types.
Some of the programs listed this year prefer a high percentage British or Continental; some either prefer or shy away from Bos indicus breeds. Since the listing began, however, alliances have been created specific to Wagyu and Charolais breeds, joining those already specific to Angus, Red Angus, Hereford, Limousin or Gelbvieh. Overall, alliance preference continues to be for Angus and Red Angus specifically, or for British X Continental crossbreds in general. In 2000, four programs cited Angus or Red Angus as a specific genetic requirement; 10 did so this year. Conversely, seven programs had no genetic requirement in 2000; only two this year.
Likewise, while some programs required source verification or all-natural from the very beginning, some have added requirements for nutrition and management, verifiable through USDA Quality Systems Assessment programs or Process Verified Programs.
Back in 2000, eight of the alliances listed no requirements for things such as source verification, preconditioning, natural or weaning; only five did so this year.
One notable difference over time is the apparent focus of more alliances on getting the type of cattle that fit by rewarding the original producer of the cattle, even if those producers don't retain ownership through harvest. In 2001, 25% of the alliances said it was possible for cow-calf producers to receive a premium on calves they sold that ended up in the program; 59% cite that possibility this year.
Speaking of which, premiums continue to increase, albeit slowly, especially in natural programs. Of those reporting in 2000, the top premium was $65/head (or $5/cwt.); this year it was $109. Conversely, cost has remained mostly static, with the highest reported cost for participation this year at $12/head. This doesn't account for the cost of owning or leasing shares, or buying genetics or other products required by some programs. By the same token, the premiums mentioned here don't account for the dividends members receive within some alliances, beyond carcass premiums.
The required number of head has also remained fairly constant, while trends in carcass weight have remained much the same, too. In 2001, the requirements were 535-1,000 lbs. This year, they're 500-1,000 lbs.
Perhaps most notable is how little the veteran alliances — those reporting in 2000 and this year — have changed, though cost of participation has remained the same or declined and premiums have remained the same or increased. By and large, though, it seems these veteran programs started with sound enough targets and business models to support sustained growth.