CME: Consumer Demand for Healthier Products

2 February 2012, at 2:57pm

US - Consumer demand for more healthful products has driven hog and cattle producers to provide leaner and leaner animals to the market place — right?, write Steve Meyer and Len Steiner.

Well, sort of. As the charts below indicate, the patterns are a bit mixed on the subject due to data limitations and the fact that there is more to meat demand than leanness!

First, let’s consider US market hogs. Average percent lean data are available only as far back as August 2001 when mandatory price reporting (MPR) went into effect. The chart at right shows those data on a monthly basis for January 2002 through January 2012.

Carcass leanness was a factor in pricing systems well before 2001 but there existed no standardized way to report it to USDA. That method was developed along with MPR. Carcass measurement systems and lean value buying systems began in the late 1980s and really got rolling in the 1990s as packers tried to get pigs with more muscle and less fat. A good hog in those early days measure 48-49% total lean — FAR less than the 55-plus percent of recent months. Producers responded to the packer incentives and to the proven fact that lean hogs were far more feed efficient. The latter can be easily understood when one considers that lean pork is 75% water and pork fat contains only 1.2% water. It takes a lot more feed to make fat!

Anecdotal evidence in the ‘90s told us that producers were making steady progress in raising leaner hogs but that progress came at a price. Sharp focus on leanness as measured by external fat cover had also reduced the amount of fat contained within the muscle (ie. marbling) and had reduced juiciness and palatability. Packers began limiting premium payments for very high lean carcasses and producers began paying more attention to muscle quality. That shift to a two -characteristic focus slowed the pace of hogs getting leaner.

The quantum increase in 2004 reflects the introduction of ractopamine, a non-steroid, beta-agonist feed additive that positively impacs leanness, feed efficiency and growth rates. The sharp increase in leanness in December 2011 and January 2012 is curious since it moves percent lean well beyond its nearly 6 year range of 54 to 55%. The increase is being driven by an increase in reported loin muscle depth/area — another piece of data reported under MPR.

The bottom chart shows the average yield grade of all cattle graded, again on a monthly basis. There is obviously far more data for cattle since USDA has been providing yield grading services for many, many years. Yield grades are numeric grades from 1 to 5 based on the degree of muscling and fat that a carcass possesses. The numeric grade indicates the percent of boneless, closely-trimmed retail cuts (BCTRC) that a carcass will provide. Those percentages are shown in the table.

The beef industry steadily improved yield grade (ie. moved the average numeric grade lower) until 1997 at which time the averages abruptly changed course. The reason for the change is much the same as the reason for the pork industry slowing its progress on percent lean: Quality became an issue. Beef demand took a huge hit in the 1980s due to concerns over dietary fat and cholesterol. The industry responded by making cattle leaner and leaner. But quality grades took a huge hit in the process with the percentage of cattle grading Choice falling from the low 90% area in 1987 to around 60% in 1997. Consumers then decided that beef quality was important as well. Average yield grades began to increase slowly as Choice grading percentages stabilized for a decade.

Choice and yield grading percentages since 2007, though, show that producers can supply lean yet high quality beef. Since yield grades leveled of in 2006, the percentage of cattle grading Choice has increase from roughly 55% to 65.5%. Part of these gains have been driven by new growth promotants such as trenbalone acetate in implants and ractopamine in feed. But a good portion is due to paying attention to and selecting for both important traits — just like the pork industry did.