Commentary; By H. Russell Cross
It’s a conundrum that has long plagued the beef business—what’s economically necessary for producers presents big challenges for wholesalers, retailers and most importantly, consumers.
Over the past several decades, the genetic direction of the nation’s cowherd has been driving us to bigger and bigger cattle. That, in turn, drives bigger and bigger fed cattle carcasses. While that may be an economic reality for the production end of the marketing chain, it creates an alarming and difficult situation for beef marketers.
In 2016, the Texas Beef Council commissioned a study at Texas A&M University to analyze the potential impact of the increase in size/weight of cattle, carcasses, subprimal cuts and retail cuts/portions on supermarket operators, purveyors and distributors in Texas. During this study, researchers interviewed representatives of six supermarket chains and seven purveyor/distributors; we conducted audits of 54 supermarkets; and we conferred with individuals from several industry trade organizations and other universities.
What I personally observed and learned during this study disturbed me greatly.
First some background:
- Americans reduced their beef consumption by 10% in the past decade (Guoyao Wu, Texas A&M University, March, 2017).
- Beef’s share of per capita meat/poultry consumption decreased from 45% in 1970 to 25% in 2016 (Shawn Darcy, National Cattlemen’s Beef Association, December, 2016).
- Average cattle slaughter weight increased more than 330 pounds over the past 40 years. Average steer carcass weight last December was 902 pounds.
- Retailers are being forced to reduce steak thickness to meet a target purchase price, yet most consumers prefer thicker steaks.
- Of the 3.7 million steer and heifer carcasses evaluated in 2016, 39% weighed more than 900 pounds. (National Beef Quality Audit, 2016).
- In the National Beef Quality Audit, 24% of the carcasses had ribeye size greater than 15 square inches.
- A key Oklahoma State University study found that the 40-year increase in carcass weight has led to a $8.6 billion loss in “consumer welfare” (i.e., the sum of the decrease in price necessary to convince purchasers to buy a thinner steak plus the amount not spent when consumers decided not to buy a steak because it was thin) resulting from changing steak size (Maples, Lusk and Peel, 2016).
What did we learn in the retail store audits?
- In 1973, the meat industry developed a very useful tool, known as the Uniform Retail Meat Identify Standards (URMIS). Across the chuck, rib, loin and round, 101 standard label names were adopted and used by the entire industry.
- Unfortunately, increased carcass size has forced the retail sector to modify the traditional cut and move away from the use of URMIS.
- In our supermarket survey, we identified a total of 364 different label names of beef cuts.
- The majority of the stores used at least one of seven “thickness declarations” as part of the label name; the thickness declarations referred to cuts of thickness from 0.20 to 1.12 in.
- Of the 54 stores audited, only four provided the customer with cooking instructions. This is very problematic since many of the steaks originated from the round and chuck.
- Both URMIS and the beef checkoff identify several alternative ways to cook individual cuts of beef. Over the years, the beef checkoff has funded a significant amount of consumer research which has guided the development of cooking recommendations, cooking methods and recipes.
- Bottom line, large carcasses are forcing retailers to cut more of the middle-meat steaks thinner to meet package and cost restrictions.
- Retailers are also cutting chuck and round primals into progressively thinner steaks.
- Most alarming in the supermarket audit was the lack of cooking instructions. If consumers buy inside round or eye of round steaks and put them on a grill, they will be very disappointed with the final product and will likely shift proteins after a few unacceptable experiences.
Interviews with retail chains
- The round was the most problematic primal cut followed by the loin. Rounds are too large and difficult to handle, cuts are too large for trays, etc. Excessive size of the loin presents problems with the appearance of the T-bone and sirloin steaks.
- All large primals cause retailers to deal with inadequate tray sizes to match cut size, consider cost per package, etc. Cutting thinner is their chosen alternative, which is taking us away from what the consumer wants.
Interview with purveyors/distributors
- Purveyors were disappointed with size, consistency/uniformity of primal cuts at receiving.
- Primals most problematic are the rib followed by the loin.
- Many purveyors are removing the M. spinalis dorsi (cap) muscle on ribeye steaks to keep size of portions down.
- Most purveyors are forced to go thinner on steaks. This is very problematic.
How do we solve this problem? Here are some potential solutions suggested during the retail and purveyor/distributor interviews:
- Assure that customers receive in-store information on the recommended cooking method for each retail cut. Retailers should take advantage of the tremendous volume of research and educational material made available by the beef checkoff.
- Set standards for “Thickness Declarations” and seek concurrence among supermarket operators.
- Use beef checkoff muscle profiling data on relative tenderness of muscles to develop cut-preparation protocols.
- Expand offerings of split-tray “Roast Meals,” “Beef and Vegetable Kits,” or “Specified Seasoning Presentations.”
- Use meat-department associates to interact with shoppers and serve as information sources.
- Purchase more prepackaged beef value cuts (e.g. Flat Iron, Petite Tender, etc.) for sale in or near full service cases.
- Contract with producers or packers to purchase desired primal-cut weights.
- Use a fanciful name to merchandise select portions of a less popular cut.
- Pay a premium for subprimals of the desired size/weight
- Primal cuts are too big and the manner in which the retail and purveying sectors are forced to merchandize them is very likely to impact demand for beef!
- It is not likely that the economic signals will be sent though the production chain to reduce size even though current practices will likely impact the demand for their product.
- If the size does not change, what are our alternatives? We obviously must find a better and more effectively way to process and merchandize our products. The first step is additional studies to build on the Oklahoma State University research in order to truly know what current practices are doing to demand.
A top priority for the U.S. beef industry (Beef Board, NAMI, NCBA, state beef councils, universities, etc.) must be to address meat quality, consistency and preparation methods for the consumer. It is obvious that producing product from larger carcasses is an effective, sustainable practice that will likely continue.
We must determine the impact of current and future practices and utilize data to identify the most effective path forward to not only increase demand, but to counter the potential slide in demand.
A potential course of action would be to more aggressively use the Beef Board’s consumer, cooking, recipe development and muscle profile research and begin to prepare and merchandize retail cuts with the optimal size and thickness that are supported by this research.
It is time to take this seriously.
Cross is professor of meat science and former head of the Animal Science Department at Texas A&M University
Maples, J.G., Lusk, J.L., and Peel, D.S. 2016. When Bigger Isn’t Better: Steak Size and Consumer Preferences. Issue: 23532. Annual Meeting, Agricultural and Applied Economics Association.