UNKNOWN PRIMAL
GROUND BEEF PRODUCTION DEPENDS ON LEAN TRIMMINGS By Burt Rutherford | Contributing Editor “T he demand for those upper two-thirds Choice and Prime cuts is absolutely prevalent. But the real driver for this market is ground beef,” con- Weaber agrees.“My math says we need to add about 2.5 million cows to the inventory just to keep up with population growth and keep per-capita supplies about even,” he says.“If you do that, you’ve got to take 2.5 million heifers out of the fed beef supply chain and keep them in the country.” As that happens, fed cattle harvest gets smaller and 50-lean trim-
tends Don Close, senior protein analyst for Terrain. Around 50 percent of the beef consumed in the United States is hamburger, a number that has remained steady for many years. And it’s likely to continue. Meet lean trimmings, the unknown primal.“Un-
mings get in shorter supply. Will imports fill the gap? “There’s probably not, in the near term, an opportunity to import enough product to offset all of that,” Weaber says. Here’s why.“We’re getting re- ports that Brazil is in a liquida- tion phase,” Close says.“Austra- lia, if they’re not in a liquidation phase, they’re right on the cusp.” New Zealand and Europe have regulated themselves into herd contraction, Close adds.“So none of the sup- pliers globally are really in a position to ramp up any time soon.” The take-home message is this: prices for all types of
known” because the value of lean trimmings – more fatty 50-lean trimmings from fed cattle and leaner 90 trim- mings from cull cows and bulls – is factored into the weight of the eight carcass primals that come from a fed steer rather than valued as a stand-alone portion of the carcass. However, 50-lean trimmings constitute the largest “cut” from a fed steer carcass, says Dave Weaber, senior animal protein analyst with Ter-
“Where I see a huge inhibitor to expansion that we’ve overlooked is we’ve taken cow size from a 1,000-pound cow to a 1,400-pound cow and the increased feed it takes for that bigger cow.” – Don Close
cattle will stay high for the foreseeable future. However, the cattle business is cyclical and, eventually, herd expansion will get underway. That will depend on the weather, Close says, but there’s more to expanding the cow herd than that. He sees another devil’s claw thorn grabbing the heels of the industry packhorse that totes the expansion load. And anyone who’s been horseback when a devil’s claw latches on knows the explosion that happens next. “Where I see a huge inhibitor to expansion that we’ve over- looked is we’ve taken cow size from a 1,000-pound cow to a 1,400-pound cow and the increased feed it takes for that bigger cow.” If a rancher is stocked at the same rate as five to 10 years ago, the ranch is overstocked, Close contends. Given that weaning weights haven’t changed in correlation the cows’ weights, the rancher is not getting fully paid for the bigger-is-better trend without retaining ownership. “So I think the place we’ve overlooked in the inability of the individual cow-calf producer to expand is the grazing load that’s placed on individual units,” Close says.“And it’s a huge problem.”
rain. That makes 50-lean trimmings a vitally important part of the product mix because beef processors blend 50-lean trimmings with 90-lean trimmings to make hamburger with various fat content. What’s more, the United States has his- torically imported lean beef trimmings to augment domestic production to meet ground beef demand. The 90-Lean Conundrum It’s well known that the United States beef business has been liquidating cows for the past seven years, and beef cow num- bers are now at historic lows. In the past, with more cow and bull numbers domestically combined with imports, ground beef demand has been met. That may no longer be the case. Here’s why. First, it’s going to be several years or more before domestic cow numbers start increasing. When they do, cow-calf producers will have a lot of catching up to do. “The last really aggressive expansion we had in ’13 and ’14, those cows are aging out,” Close says. Even a 2-year-old heifer in 2019 is now getting past her prime production years. “So you’re going to start losing more and more of your herd to attrition. So the number of replacement heifers just to hold the status quo is going to escalate before you ever start expanding,” he adds.
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