A Story So Good Even the Dog Wants to Listen
Certified Angus Beef President John Stika shares insights with Canadian ranchers.
Dyce Bolduc was a teenager when he bought his first Angus cows at an auction in Alberta, Canada. It was 1967 and Angus calves sold at a discount. Dyce and his brother David distinctly remember market reports that included the phrase “and the black calves sold for 10 cents less.”
Not a good market signal to get into the Angus business.
Dyce and David didn’t care. They had a vision few others could have imagined. Betting on the ability of the Angus cow and the opportunity the brothers saw for the breed, they transitioned their parent’s Shorthorn operation to Angus. Originally they focused on quality phenotype but over time transitioned their emphasis to what is underneath the hide — they wanted cattle that looked good AND produced beef that tastes great.
It’s a philosophy many of their customers follow today.
In 2016, a group of calves sired by Cudlobe Farm bulls and raised by Cross Cattle Company, Okotocs, AB, graded 16.5% Prime and made 51.3% CAB (premium AAA) to total 97% AAA (Choice) or better. Compared to the Canadian average that same week, 1.3% Prime, 18.4% CAB and a total 55.4% AAA, it’s easy to see why their genetics sell for a premium.
“There’s a lot of room for growth of Certified Angus Beef here in Canada,” says David. “There needs to be more cattle harvested that can make the grade and the CAB specifications.”
CAB President John Stika stopped by the Cudlobe Farm near Stavely, AB, in August to share with a group of Dyce and David’s customers just how high the demand is for cattle that make the CAB brand in Canada. At the field day, cattlemen from across that country packed the Cudlobe barn to hear John speak.
As the chatter dulled and John began to talk, even the Bolduc family dog knew the message must be important. He ran in and grabbed a front row seat to hear:
“Consumers have shown us time and time again that they are willing to pay more when the value proposition offers them more — as it does with CAB compared to commodity beef,” Stika said.
The gap between demand for high-quality beef in Canada and the supply of cattle that can make the grade is wide, especially during the summer grilling season. A recent CANFAX report shows the difference in value between the below-average marbling AA grade and the AAA grade grew to historic levels for the summer of 2017. Spreads as high as $42 per hundredweight one week this summer show the premium value for AAA beef in 2017 is higher compared to the three-year average of an $11/cwt. spread for the same week.
“Producers who align genetic decisions and herd management strategies with that demand signal will be the most likely winners moving forward,” Stika told the crowd. “Canada is the largest market for CAB outside of the U.S., yet Canadian producers have only been able to supply enough quality cattle to roughly meet two-thirds of the demand that exists. That represents quite an opportunity for those willing to focus on quality.”
It’s exactly what David and Dyce knew long ago when they purchased those first Angus cows — that the future of the Canadian beef industry relies on quality cattle production. Fifty years ago, black cattle sold for less than the market average. Today, their customers earn $50 to $90 head above average.
With premiums like that, no wonder even the dog wanted to listen.
Until next time,
*Photos provided by the Bolduc family.