A&M hosts 47th annual Beef Short Course

By JULIET BRISKIN | Central Texas Edition

August 16, 2001 -- More than 1,100 beef producers gathered at Texas A&M University Aug. 6-8 for the 47th annual Beef Cattle Short Course and Trade Show.

The event was dedicated in memory of Professor John Kamm Riggs who passed away June 1, 2001, in College Station. Riggs founded the Beef Cattle Short Course and was a leader in beef cattle and nutritional research. He served as a professor and researcher at the university from 1935 until his retirement in 1979.

Topics at this years event ranged from basic ranch management to American consumer eating trends. Over 30 speakers presented the latest information regarding the beef cattle industry.

On Tuesday morning, Dr. Dan Hale of Texas A&M, discussed carcass grading during the general session. According to Hale yield grade is becoming more and more important when evaluating a carcass.

"What percent of a carcass is going to end up in the form of retail box beef cuts?" asked Hale. "That is what we are looking for here."

Following Hale's talk, Dr. Ted McCollum of Texas A&M continued the discussion by talking about the various ways of selling cattle.

"There are several different ways to sell," said McCollum. "There is live cash selling, on-the-merc, in-the-meat and grid selling."

According to McCollum live cash selling is selling cattle on a live basis out of the feedlot pens. "Live cash selling is real simple," he said. "You weigh the cattle in the morning, shrink the weight by 4 percent and that is your pay rate."

On-the-merc is selling against a futures contract. "Merc contracts are a little bit more forgiving," said McCollum, "because they work on averages and are not necessarily working off individual cattle, but it's a little bit more sophisticated than most people want to deal with."

Selling in-the-meat, according to McCollum, has been around for a long time. "It's like selling live cattle, but you are selling carcasses," he stated. "All the cattle in the pen receive the same average price per carcass."

Finally there is grid selling where, according to McCollum, carcasses are sold on an individual basis. "You get paid for each carcass based on what you are producing."

There are numerous things to consider when selling on the grid, including the dressing percentage, carcass price, carcass parameters of the cattle, the number of and penalties for "outs" in the herd and transportation costs.

At a session entitled "Looking at the Past and Reacting Toward the Future," Dr. Ernie Davis, livestock marketing specialist and Texas A&M professor, discussed the changing beef industry.

"Just knowing the structure of the beef cattle industry is important because it gives you an idea of what you can do and what you can't do in the market place," said Davis. "Only about 9 percent of the cow/calf operations in the U.S. really make a living off beef cows. Their livelihood depends quite a bit on what they get off their ranch."

According to Davis, we are now seeing an increase in packer concentration, which on one hand, could be considered a bad thing.

"But let's look at the advantages," he said. "This could give us expanded markets for our beef which was not being done in the past. Did you ever see packer-branded meat? Not really, but now we do. These guys are starting to get on the marketing band wagon so they can hold on to their market share."

Other positive results of an increase in packer concentration, according to Davis, include industrialization of packers and development of new meat products.

"The main thing is that U.S. packers have the lowest unit cost per head out there. They are the most competitive in the world which gives them an international advantage," he stated. "We can kill and process cattle cheaper than any other country in the world and we have the highest quality beef."

Davis also detailed the negative aspects of packer concentration. They (the packers) have more market power and control and they can even control the quality and quantity of the products, he said.

Additional drawbacks include "fewer buyers and in some places regional monopolies, less price competition and difficulty obtaining pricing information." he said. "We are struggling right now to implement mandatory price reporting so we can get more information from the packers."

To obtain a copy of the proceedings from the event contact Dr. Larry Boleman's office at 979-845-3579. The proceedings publication includes selected materials from the speakers and papers from various seminars.