For the first time ever, we have consistently seen beef demand grow as consumers have sent a clear message of their preferences, and the beef industry responded with the quality revolution that has led to increased dollars flowing into the industry.

Genetics have increasingly become the No. 1 factor in determining an operation’s success.

The technology revolution gave us electronic identification (eID) and data management systems that have allowed us to both collect and analyze the data from a total systems approach. The AI (artificial intelligence) revolution is opening new frontiers with mega data promising to fundamentally change the way we analyze and utilize information. It is exponentially increasing the value of data.

The aggregators and those with the expertise to apply the mathematics and the computing power are no longer in the driver’s seat. They have been commoditized, and the value is shifting back to those who hold access to the data. It is not about the models, but rather who has the best data to feed them.

Stepping up

In all of this realignment of our supply chain, one segment of the industry — and I would argue the most important segment of our business, the cow-calf producer — was largely left out of the equation. It was not surprising that the cow-calf industry embraced the genetic tools that directly affected their bottom line, or that they responded to price signals on management and health practices where there were economic incentives to do so.

What is somewhat surprising is that they embraced full-heartedly the signals that improved the overall customer experience, even if they were not rewarded appropriately for doing so. Admittedly, their response was not totally altruistic. Better beef demand equates to more dollars, even in a system where the better cattle subsidize the poorer ones.

Revolutionary value of genetics

Perhaps the greatest revolution in our industry has been occurring slowly during this entire time, a revolution so quiet and foundational we failed to recognize how it was transforming our industry. This revolution is in the growing value of genetics as it relates to profitability.

This has happened because of a unique convergence of events: the perfect storm created by higher overall prices, higher input costs, improving premiums and an increasing number of cattle selling on a value-added basis. This has led to increasing differentiation in the marketplace and to premium creation.

We also now have the ability to make rapid genetic progress and defy genetic antagonisms through improved selection tools.

The trickle-down effect from improvements made in the pricing of our product in other segments has increased the incentive for buyers upstream to know what genetics they are buying.

Finally, the rate of improvement and the rate of adoption in best management practices has elevated the importance of genetics. Management, risk mitigation and market timing no longer are significant drivers of profitability. Everyone is doing a good job. There is no longer a lot of play in the system. Best management practices are only significant drivers if they are not widely adopted.

As a result of all of these factors, genetics have increasingly become the No. 1 factor in determining an operation’s success.

The last gap

The AngusLink^SM program was designed to fill the last gap in the industry alignment, giving cow-calf producers the means to differentiate their cattle based on genetic merit and giving their buyers the ability to accurately assign value. AngusLink and the Genetic Merit Scorecard^SM do for the cow-calf industry what expected progeny differences (EPDs) did for the seedstock industry, providing a way to differentiate cattle based on genetic merit and assign value according to the value they create.

The AngusLink program was designed to fill the last gap in the industry alignment, giving cow-calf producers the means to differentiate their cattle based on genetic merit and giving their buyers the ability to accurately assign value. 

AngusLink is rightly first thought of as a marketing tool designed to reward cow-calf producers for the value they are creating. Secondly, it is often seen as a benchmarking tool not only for buyers, but for producers, so they can monitor how they rank relative to the industry as a whole.

Ultimately, it also plays a role in strengthening the alignment between seedstock producers and their commercial customers, helping to build relationships and facilitate the feedback loop that ties our entire supply chain together, with the common goal of improving the customer experience in order to create value and improve profitability throughout every segment of the industry.

Supply chains have proven the value of an aligned production system, the industry’s supply chain is more aligned than ever, and the resulting opportunities have never been higher.

Editor’s note: Troy Marshall is director of commercial industry relations for the American Angus Association.

Angus Beef Bulletin EXTRA, Vol. 16, No. 10-B