In a statistical view of the world, you and I are average people. Our cattle are average, our lives are average and our incomes are average. Being closer to the situation, we probably see it differently. For example, most producers believe their cattle are above average in value.
A concept called “the law of averages” says that's impossible. By definition, as many cattle are below average as are above average. Those who buy and feed commodity cattle believe in this law because of long-term experience. But they still try to defeat it in the short term, or they leave the world of averages behind in favor of information.
We need to know average numbers in order to aim higher in everything we do. Those who would add value to their calves aim for a combination of greater-than-average performance and carcass value.
However, you have no incentive to add value if your better cattle are lumped in with poor-quality cattle and sold at an average price. You want some form of value-based price that rewards your improvement. The market is moving in that direction and, as it does, it provides a strong incentive to produce above-average cattle.
Consumers learned about average eating quality during the 20-year slide in demand for beef, a time when average pricing squelched producer incentives. During that same time, the Certified Angus Beef (CAB) brand grew to annual worldwide sales of more than 500 million lbs. by rising above the average.
Recent beef checkoff studies show consumers will pay more for guaranteed tender beef, and still more for beef that grades at least average Choice, compared to Select. While average beef was found wanting by a whole generation of consumers, they will pay a premium for consistently flavorful, tender and juicy beef. That willingness is what is driving change in the cattle industry.
The average is still a great benchmarking tool within a herd. It provides a yardstick for improvement and becomes an upwardly moving figure in comparison to the industry's commodity. But we can't improve with default values or average assumptions.
Broaden Our Perspective
Most of what we think we know in the beef industry is based on research that focused on supposedly average animals meant to represent typical cattle in the region. If breeds are considered, they usually have been the broad classifications of English and continental — or Bos indicus and Bos taurus.
If that's all the further research goes, the best nuggets of advice are only sweeping generalities about average breed types. When the leading edge was commodity-oriented, such average inquiries were good enough. They are still good starting points but not always sufficient.
We learn little, for example, by considering whether average cattle would have made or lost money on muscle or quality grids — except that you should not market commodities that way. USDA publishes a weekly average grid report, but it's a poor model for considering specific action. Producers want to know if their specific cattle will make money on a specific grid.
Branded programs don't offer an average premium or represent targets of average stability. And despite conventional wisdom, you can't maximize grid profit with middle-of-the-road cattle. The whole point of value-based marketing is to encourage aiming at a proven end-product target. There's no long-term security in keeping to the muddy middle with no goal but average.
An average isn't usually something to fear, but the beef industry seems at least a little uncomfortable with the fact that today's average cow is Angus-based. Political and economic factors dictate the continuation of a paradigm in which a large number of breeds exert equal influence. As a result, organizations and research institutes are becoming less effective in serving constituents who have mostly Angus herds.
These pressures hamper progress toward individual excellence — a quest that can only increase average values across the beef industry and build consumer demand.
The beef industry needs to pursue research strategies that recognize the value of that growing quest. The effort will require more cooperative onsite research with ranchers, where refinements in the process of discovery will be more valuable to the industry than what is discovered.
The rise of individually managed cattle sorted to end points in feedlots, and data feedback to value-indexed cows mean we can't move forward with average advice. We need road maps to profitable production in several leading scenarios. One of these should be purebred cattle selected for the combination of carcass market value, cow functionality and feedlot performance.
Of course, one scenario should continue to be the crossbred model, but the industry should realize the limits of supporting this as an ideal. Considering the complexity required for on-target crossbreeding, successful individuals might do as well by concentrating on known genetics rather than average breed complementarity.
It doesn't matter if the average profit from a research English herd with “representative” but static genetics falls behind a continental-cross herd at the same institute. What matters is what works for the individual. Theory is fine, but counter-examples dispute everything based on averages.
Steve Suther is director of industry information for Certified Angus Beef LLC. Contact him at 785/889-4162 or [email protected].