Billion With A “B”

Angus producers knew they could create a brand of beef that would sell millions of pounds in a year. But more than a billion? Let’s not get carried away, the organizers would have said. Yet upon reflection, some might have wondered.

That year has come and gone now.

The Certified Angus Beef® (CAB®) brand’s 38th fiscal year (FY) ending Sept. 30 carved a spot in history as the first time global sales surpassed 1 billion lb.

For the 18,000 partners joined by a common mission, CAB President John Stika said the milestone brings a reason to celebrate. More than that, it brings appreciation for thousands of individual successes that led to that historic mark.

“This number is significant, not because of what it is, but for what it represents,” Stika said of the actual 1.015 billion lb. sold, up 119 million lb. and 13.3% more than last year.

The average growth over the previous five years has been 3%, but it’s nearly 75% in the last decade of sequential annual records and 12 straight years of sales growth.

The Market Moves

After several years of record-high beef prices brought on by tight supplies, the last fiscal year began with the pendulum swinging back to favor beef marketers. Retailers made it through six years of relatively flat to declining sales to arrive at a year of explosive growth, setting an all-time record with sales of 435 million lb., an 18.5% jump. Of the top 100 retail chains carrying CAB, 70% saw a rise in beef sales.

Not to get lost in the that boom, foodservice continued its consistent growth, up 21 million lb. from last year. More than 75% of the brand’s 143 domestic distributors saw their businesses grow in FY 16, selling 10% more beef to licensed restaurants than last year.

Capitalizing on its larger reach, the International Division set a record of 138 million lb. sold, a growth of 15%.

Herd expansion here featured the use of more high-quality Angus genetics. After years of a declining supply, the brand’s 32 licensed packing plants saw an increase in Angus-type cattle identified to 13.6 million, up 6.9%, though short of the 15 million head eligible in 2010.

Higher acceptance rates allowed graders to certify a record of more than 75,000 carcasses per week, totaling 12.6% higher, or 3.92 million for the year to set an annual CAB acceptance rate of 28.9%. That record is more than double the rate of 10 years ago when it was barely above 14%.

The beef market is a seesaw of sorts: for cattlemen today, for retailers then who struggled to sell high-priced beef. Stika said the key for all is to stay the course through their lows and prepare for the future in the highs of the cycle. The long-term outlook reveals a high-quality cowherd that puts producers in position to the meet the demands of a global beef market.

“From start to finish in this process, it’s important for everyone to stay connected with each other’s realities,” Stika said. “Doing so allows us to make sure we never lose sight of the fact that we are all in this together. The model for Certified Angus Beef is not just about short-term gain; rather it’s about creating an overall pull-through demand for the product that allows everyone to benefit over the long haul.

“Cattle prices may be down currently, but quality is still the road for future sustainability of our individual businesses, because consumers demand it.”