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” –At least 51% black hide OR –AngusSource ® tagged In 2011, approximately 63.5% of all fed cattle met this specification.

Imitation- The most sincere form of flattery? As of May 2012: –132- USDA Certified Programs –96- 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; < 1000 lb HCW; <1.0 in BF 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

Carcasses Certified for the Certified Angus Beef® Brand >65,000 hd/wk

Certified Angus Beef ® Brand Demand Source: Urner Barry and CAB LLC

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 =$160 =$450 Source: USDA

Trends in Quality Grading Source: USDA

Why the improvement? Increased Angus genetics and improved genetics for marbling Camera grading implementation More heifers being harvested Overall better management focus on quality grade –Nutrition –Health –Handling

CAB ® Best Practices Manuals

How does a cattleman market through the CAB ® brand? Use registered Angus bulls with superior marbling 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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