Animal Science 1 Unit 19

 Beef Promotion and Research Act of 1985  Established in 1985  $1/hd check off for every head of beef sold in the United States  50 cents goes to beef council in the state the animal was sold in; if no state council it goes to the national  50 cents goes to Beef Promotion and Research Board for use at the National Level

 Promotion of beef as a food  Provide consumer information  Provide information to the beef industry  Promote foreign marketing  Promote research in beef production and utilization

 Auctions  Packers  Other markets

 Supply: the amount of a product that producers will offer for sale at a given price at a given time  As price increase producers are willing to offer more product for sale  As price decreases less product will be offered for sale.

 Demand: the amount of a product that buyers will purchase at a given price.  As prices go up there is less demand at a given time for a given price.  As prices go down there tends to be more demand for a product.

 Management decisions to raise more or fewer cattle eventually affect the price of cattle on the market.  Beef cattle numbers tend to run in 9-13 year cycles  See fig.19-1

 Federal law that is administered by the USDA  Regulates all cattle that move across state lines  Act sets the rules for fair business practices and competition  Rules apply to  Stockyards  Auction markets  Packers  Market agencies  Dealers who engage in interstate livestock marketing  Individual farmers and ranchers who buy or sell cattle as a part of their operation are not considered to be dealers under the provisions of the act

 Set the value of the cattle  Physically move the cattle from producer to consumer

 Determining factors- price, cost of marketing and convenience  Most producers select markets based on convenience  However, cost of marketing and price should be given higher precedence

 The loss of weight that occurs as cattle are moved to market  Amount of loss varies from 1-5% of an animal’s weight  Losses due to shrinkage are absorbed by the seller

 The distance the cattle are moved.  Most loss in weight occurs in the first few miles.  The amount and kind of feed and water the cattle receive just before shipping  Weather  The condition of the cattle  Thin cattle shrink more than fat cattle  How the cattle are handled  Sex of the animal  Amount of feed, water and rest received during shipping  The length of the fillback period after the cattle reach the market  The fillback period is the time during which the cattle are fed.

 Available from the newspaper, radio, television and by phone  The USDA publishes weekly livestock market news information  Outlook information is available from Colleges of Agriculture

 Also called central markets or public stockyards  Facilities are owned by a stockyard company  The company charges for the use of the facilities and feed fed to the cattle while they are in the stockyard.  Title to the livestock does not pass to the stockyard company.

 2 or more commission firms  Cattle are consigned to a commission firm by the seller  When goods are consigned they are not sold to another party but merely given to another party who acts as a selling agent.

 Bargain with representatives of purchaser to get the best price possible for the cattle  Charge a commission (fee) for their services in marketing the cattle

 Charge for  Yardage  Fee charged for the use of stockyard facilities  Feed  Insurance  Selling fees  These fees are deducted from the selling price  The seller receives the net amount after the charges are taken out

 Exist for both feeder cattle and slaughter cattle  Today there are about 30  This is compared to the 80 that existed in the 1920’s and 30’s  Most are in western and Midwestern states  Slaughter cattle terminal markets are located near population centers and packing plants

 Commission firm sales are made by private sales  Both buyers and sellers are represented by professionals  Some terminal markets are now using auction sales as a method of selling both feeder and slaughter cattle

 Use is decreasing  About 12% of the packer sources of slaughter cattle is from terminal markets  Compared to 90% in 1925  Larger producers of cattle tend to use other methods of marketing their cattle

 Cattle are sold by public bidding  Also called local sale barns and community auctions  Popular due to their convenience for buyers and open competition for cattle  Of the most value to the smaller cattle producers.

 Yardage  Feed  Insurance  Brand inspection  Health inspection  Check-off dollar  Charges are based on either a percent of the selling price or a fixed fee.  Cost are paid by the seller.

 Tend to be used by large cattle producers  No commission firms or brokers

 Used to market cattle directly from feeder cattle producers to cattle feeders  Sale is made on the range or farm where the feeder cattle are produced  Often used by large producers of feeder cattle

 Buy feeder cattle for cattle feeders  Dealers are paid either on a commission basis or they buy cattle outright and then resell them at a higher price  Also buy slaughter cattle locally  Usually have facilities for handling cattle  These cattle are then shipped on to packing plants for slaughter

 Buy feeder cattle on order for cattle feeders  Cattle feeders use order buyers because order buyers know where the cattle are and they are familiar with the market conditions.  Also buy slaughter cattle for packing plants  Buy cattle on the farm and ship them directly to the packing plant  Cattle are weighed at the packing plant and are paid for at prevailing prices for that day.

 Bought on a grade and yield basis  The animal’s value is determined after it is slaughtered  The carcass is graded  The carcass weight or yield is determined.  Good quality cattle bring a higher price when marketed this way  About 23% of the cattle and 9% of the calves in the United States

 Cattle are videotaped on the farm or ranch  Video is sent to the transmitting station where the auction is located  Video is telecast for viewing by prospective buyers  Prospective buyers must register with the auction company in advance of the sale  Video allows the buyers to see the cattle without moving the cattle to the auction  Purchased cattle are moved directly from the seller’s facility to the buyers facility

 Used mainly for marketing feeder cattle  Works as a form of auction selling  Each bidder has a computer terminal on-line during the sale  Bids are entered on-line during the sale

 Specialized business  Cattle are sold by private sales or auction  Producers advertise through breed associations and other publications  Selling performance tested bulls and exhibiting at fairs also provide advertisement

 The Agricultural Marketing Act of 1946 was amended by the Farm Act of 2002  It now requires retailers to label covered commodities showing the country of origin  This includes the muscle cuts of beef, lamb and pork and ground beef, lamb and pork  Other products that do not come from the livestock industry are also included-fruit, vegetables  Mandatory COOL went into effect Sept. 30, 2008

 A covered commodity is eligible for designation as “Product of the U.S.” only if it is derived “exclusively from an animal that is exclusively born, raised and slaughtered in the United States.” P R O D U C T O F U S A

 A product is deemed to have multiple countries of origin if the animal from which it was derived was born and/or raised in a different country or countries and then slaughtered in the U.S. Covered commodities in this category would have to identify all the relevant countries.

 Covered commodities from animals raised in another country but slaughtered in the U.S. would fall into this category.

 Meat products imported from another country would be labeled as a product of that country. PRODUCT OF CANADA

 Beef animals younger than 1 year of age  Further classified as  Veal calves (vealers)  Slaughter calves  Generally divided on the basis of the kind of carcass they will produce  Main difference is the color of the lean

 Have only had a milk diet  Under 3 months of age  Light veal calves-less than 110 pounds  Medium weight: pounds  Heavy weight: more than 180 pounds  Lean is very pale

 Usually between 3 and 8 months of age  Have been fed a diet other than milk for a period of time  Light weight: less than 200 pounds  Medium: pounds  Heavy: More than 300 pounds

 Sex’s are steers, heifers, and bulls  All graded on the same standards  Five grades  (1) Prime  (2) Choice  (3) Good  (4)Standard  (5) Utility

 Class is based on sex definitions  Grade is based on apparent carcass merit of the animal

 Steer  A male that was castrated before reaching sexual maturity.  Does not show characteristics of a bull  Bullock  Male, usually under 24 months of age  May or may not be castrated  Does show some characteristics of a bull

 Heifer  Immature female, that has not had a calf or has not matured as a cow  Cow  Older female that has had one or more calves or a mature female that has not had a calf.  Bull  Male, usually over 24 months of age  Has not be castrated  By official USDA standards any castrated male bovine that shows or is beginning to show the male characteristics of an uncasterated male is considered a bull

 Prime  Choice  Select  Standard  Commercial  Utility  Cutter  Canner

 1-5  Yield Grade 1  Indicates the highest yield of lean meat  Yield Grade 5  Indicates the lowest yield of lean meat  based on the muscling in the loin, round and forearm  Fatness over the back, loin, rump, flank, cod, twist and brisket is also used in determining yield grades

 based on the amount and distribution of finish on an animal  Firmness and fullness of muscling and maturity of the animal are other factors involved in quality grading.  See fig and 19-5

 Age and apparent sex designation determines the class of the beef carcass  Quality and yield grades are the same as those for live slaughter cattle

 Refers to the presences of and distribution of fat and lean in a cut of meat  Amount of marbling affects the quality grade of the carcass  Marbling, maturity and quality grades all affect each other

 Influenced by carcass weight, rib eye area, thickness of fat over the rib eye area and the amount of kidney, pelvic and heart fat (KPH)  A preliminary yield grade for a warm beef carcass is determined by the thickness of fat over the rib eye  Each 0.1 inch of fat thickness changes the yield grade by 0.25 of yield grade  An adjustment is then made for rib eye area and percent KPH to determine the final yield grade  An increase in the amount of these fats decreases the percent of retail cuts from the carcass

 Fat thickness over the rib eye 0.2”  Prelim Yield Grade—2.5  Warm Carcass Wt.—600 lbs  REA—12 sq. in.  Adjustment is then -0.3  % KPH– 2.5, adjustment is then a -0.2 of a grade  Final yield grade is then 2  = 2.0

 Higher grades of slaughter cattle are usually grain fed and have a high yield of lean cuts with the right amount of marbling  These animals bring higher prices in the market  WHY???

 Lean is darker in color than normal  Usually has a gummy or sticky texture  Thought to be a result of a reduced sugar content in the lean meat at the time of slaughter  Condition is sometimes found in cattle that have been subject to stress conditions before slaughter  Condition varies from barley visible to nearly black in color  No negative affect on taste but is considered a defect because it affects consumer acceptance  Condition may result in the deduction of 1 full grade

 Supply and demand govern the price of beef  Producers have little effect on the demand but management decisions affect the supply.  Prices vary with the seasons  Beef cattle are marketed through terminal, auction and direct selling.  Sale of beef cattle that are transported across state lines is regulated by the Packers and Stockyards Act.

 Purebred cattle are sold by private sale and auction.  Reputation and method of advertising are important to these producers.  Marketing method is usually based on convenience but should be based on price and costs of marketing.  Cattle shrink when shipped. Careful handling and management can reduce losses due to shrinkage.

 Cattle are divided into classes based on use, age, weight, and sex.  Quality grades are used for both feeder and slaughter cattle.  Yield grades are also used for slaughter cattle  Age and amount of marbling also affect the quality  Yield grade is determined by the amount of lean meat that can be cut from the carcass  Futures market can be used to reduce price risk.