A.M. Edwards and J.W. Wilton
Centre for Genetic Improvement of Livestock
Animal and Poultry Science, University of Guelph

Summary

The packing, processing and retail segments of the Ontario beef industry were surveyed to determine food service requirements for carcass weight and carcass quality traits. Surveys showed that two major potential markets existed. One market required a 660 to 750 lb. carcass with a high degree of marbling and the second market a high yielding (> 750 lbs.) carcass with little or no marbling.

Introduction

Beef producers raise cattle in various environmental conditions and economic situations in the province of Ontario. Environmental conditions are a result of weather and location factors, while economic situations are based on current and future market trends, as well as consumer preferences. Economic signals are used by packers to relay consumer preferences to producers. However, the only economic signal currently in use is the discount for carcasses weighing more than 750 lbs. Beef quality preferences are not relayed back to the producer.

Invited speakers at local cattlemen’s meetings in 1995 stated that consumer preference at the retail and restaurant level had changed. Consumer demand shifted from a large to a small portion size. It was stated that restaurants sought highly marbled (AAA or Prime) beef over low marbled (A and AA) beef which was once preferred.

Supplying consumers with a preferred product satisfies beef consumer demands. However, to supply a preferred product that product must be clearly identified and produced. Paying incentives for quality factors such as backfat and marbling may encourage production of a preferred carcass or cut. However, beef producers are paid on a weight basis and are therefore encouraged to raise a large and heavy animal.

The objectives of this study were to identify current buying practices of cattle packers, beef processors and retailers and to specify food service requirements for carcass weight and carcass quality traits.

Materials and Methods

Three separate surveys were designed and executed: one for cattle packers, a second for beef processors, and a third for retailers. Questions in the surveys solicited rankings of attributes used in the decision process of purchasing inputs (live cattle for packers, sides or wholesale cuts for processors and retailers). An attribute was defined as a reason or factor taken into account by the individual respondent. Carcass and side weight ranges, as well as fat and marbling specifications were requested to identify specific carcass quality requirements of the various beef industry sectors.

Survey respondents were restricted to the province of Ontario. Fifteen federally inspected slaughter plants and fourteen retailers were surveyed. A list of beef processors was unavailable, therefore surveys were sent to all federally inspected establishments, which included poultry and pork processors.

Results and Discussion

Only 5 surveys of the 15 sent to cattle packers were completed and returned. The 5 packers slaughtered 80% of Ontario’s beef cattle and represented the majority of the packing sector. Eleven surveys were returned of the 59 sent to further processors. Of the surveys returned, only 5 were complete. Since there was no list of beef processors available, it was not possible to determine the percentage of business conducted by the respondents. Six surveys of the 14 sent to retailers were returned and 5 of these were complete. The percentage of returned surveys was 43% for retailer surveys compared to 33% for packers and 19% for processors. The estimated share of the Ontario retail business represented by the retail respondents was 55-60%.

Beef purchases made at the packer, processor, and retail level were based on different attributes. Each set of attributes used, depended on the final product of the purchaser. Packers’ decisions were based on ultimate quality of the beef with the top three attributes listed as number of days on feed, quality of feed and age of the animal. Processor and retailer purchase decisions were based on price and overall appearance of the beef.

Carcass Weight

Carcasses purchased by packer respondents ranged in weight from 500 to 900 lbs., with 72% of the carcasses weighing more than 700 lbs. A graph of individual packer respondents demonstrated 2 buying patterns (Figure 1). Three packers purchased the majority of their cattle over 700 lbs. while 2 packers purchased cattle evenly across the reported weight ranges.

Packers in Ontario have a wide variety of customers, ranging from a quick service outlet to a restaurateur. Carcass weight specifications varied according to the customer. The quick service, institution, and some retailers sought carcasses weighing more than 750 lbs., whereas restaurateurs and other retailers demanded lighter and smaller carcasses weighing 650 to 700 lbs.

Beef processors purchased carcasses that ranged in weight from 600 to 1000 lbs. Processors manufacture two main products: ground products that include hamburgers and sausages, and cured products for delicatessens and retail meat counters. Carcass size and cut size have little if any direct effect on grinding products. Therefore, the largest cuts available at an acceptable price to processors were preferred. Retailers at the Ontario Cattlemen’s Association 1995 Annual Meeting Debate stated that consumers seek relatively small portion sizes. Therefore, it was concluded that processors who cured beef preferred the smaller cuts. The wide range of weights reported by the respondents suggested that 2 potential markets existed at the processing level.

Marbling

The majority of carcasses purchased by packer respondents were A marbling followed by AA and AAA marbling. A chart of individual responses revealed two buying patterns (Figure 2). Three packers bought over 50% of carcasses with A marbling and 20-30% AA and AAA marbling whereas the remaining 2 packers purchased 40-50% of A and AA marbled carcasses with minimal AAA product.

Marbling content of cuts purchased by processors was also examined. Two groups of processors became apparent. One group sought A marbling only, while the second sought the three marbling levels, with AAA representing 10% of the establishment’s purchases. The two groups matched the division of respondents based on carcass weight. Large carcasses with A marbling satisfied the grinding processors whereas the smaller carcasses with AA or AAA marbling satisfied processors curing product.

Retailer purchases based on marbling also revealed two or three buying patterns. AA marbling was reported in over 50% of retailer purchases followed by A and finally AAA marbling. Responses were plotted to reveal any patterns (Figure 3). One retailer purchased primarily A beef with a minimum of AA and no AAA beef. A second retailer restricted its purchases to primarily AA with a moderate amount of AAA and no A marbled beef. The remaining 3 retailers reported purchases were evenly distributed among the three levels of marbling.

Suppliers of product are driven by the desire to satisfy their customers and to establish a business relationship. Retailers provide a variety of products ranging in size and quality to meet the anticipated demands of the ultimate customer. Processors purchase two distinct products: large cuts with little marbling and smaller cuts with modest marbling. These two products meet the demands of their two main customers, the retail and food service sectors of the beef industry. Packers purchase all available cattle and pay producers according to yield class and grade. The carcasses are sold to a variety of customers ranging from processors to restaurateurs according to predetermined specifications set out by the customer.

Conclusions

Two patterns emerged from the retailer and processor surveys, and were interpreted as potential markets. The first market required carcass weights of 660-750 lbs. with a minimum AA marbling and preferably AAA marbling. These carcass specifications satisfied retailers, processors curing beef products, and the Ontario restaurateurs. The second market required a high yielding carcass with A marbling, and would meet the requirements set out by some retailers, processors grinding product, and quick service customers. Carcass weight was not an issue in this market pending safety issues at the packing level. These carcasses met the specifications set out by processors producing ground products, retailers and institutions.

The Ontario beef cattle population produces a greater amount of high yielding A marbled cattle, than the lighter and highly marbled carcasses sought by retailers and restaurateurs. To fulfil the growing demands for smaller carcasses with AA and AAA marbling scores, cattle with the genetic potential of producing lighter carcasses and higher marbling must be identified and exploited in today’s production system.

Significance to the Industry

The presented results defined two potential markets in the beef industry. By identifying a preferred product, beef cattle breeders can gear breeding goals and decisions towards satisfying the ultimate consumer.

Acknowledgements

Funding from the Ontario Cattlemen’s Association and the Natural Sciences and Engineering Research Council of Canada is greatly appreciated.

Figure 1.   Percentage of Carcasses Bought by Packers in 45-kg Weight Ranges

Figure 2. Packer Purchases by Marbling Level

Figure 3. Retailer Purchases by Marbling Level