CAB® and the High Quality Beef Market Certified Angus Beef LLC

Outline Overview of the Certified Angus Beef® brand and defining “high quality” Production trends in high quality beef Best practices for targeting a high quality beef market

Certified Angus Beef LLC Not-for-profit subsidiary of the American Angus Association Specifications evaluated by third party (USDA/CBGA) Never own cattle or product – only the brand Licensing allows brand use to partnering companies Sole revenue generated through commissions applied to the brand sales of licensed packers and value-added processors

STEP 1 to become CAB® Live animal specification Must be “Angus-type” –Predominantly (>51%) black hide In 2014, approximately 62% of all fed cattle met this specification. NO grid premiums are paid for being “Angus-type”.

Imitation- The most sincere form of flattery? For 2014: –165- USDA Certified Programs –123- Have “Angus” in their name These range in quality from Prime to cull cows Certified Angus Beef® brand is still the only program owned and operated by the members of the American Angus Association All “Angus beef” is not created equal

STEP 2 to become CAB® Ten Carcass Specifications Superior flavor, juiciness and tenderness –Modest or higher degree of marbling (most critical spec for eating quality and the hardest to hit for cattle producers) –Medium or fine marbling texture –“A” maturity –No hump on the neck exceeding 2-inch height Consistent sizing –10-16 in 2 REA; 1050 lb or less HCW; <1.0 in BF {Presenter’s note: HCW spec moved to 1050 lbs in November, 2014} Desirable appearance and plate presentation –Moderately thick or thicker muscling characteristics –Practically devoid of internal hemorrhages –No dark cutting characteristics

10 Carcass Specifications CAB ® Brand Supply Chain ADD Enterprise s

CAB ® Acceptance Rates and Certified Head Count *Projected On average, 68,000 head/week are accepted into the CAB® brand.

Annual Sales of the CAB® Brand

CAB ® Demand *Source: Urner Barry CAB ® Pounds Sold (millions)

Defining High Quality Beef Slight00 Small00 Modest00 Moderate00 Slightly Abundant00

Market Signals for Quality Slight00 Small00 Modest00 Moderate00 Slightly Abundant00 Base +$$$$+$$+$$-$$$

Source: USDA LM_CT 169 =$195 =$340 Source: USDA

Resources Available from CAB

How do cattlemen participate and market through the CAB ® brand? Include marbling in genetic selection decisions –Registered Angus bulls –Utilize GeneMax™ Incorporate a health and nutrition program that protects marbling potential Market calves in a way that captures value –Pool calves with other producers –Build a relationship with a feedlot –Retained ownership through feedlot –Sell fed cattle on a grid

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