The average retail price for fresh beef in the first quarter of the year was $7.84 per pound (lb.). Just 15 years ago it was less than $4 per lb. But when beef was at that level, pork was about $3 and chicken just under $2 per lb. Today pork is less than $4 per lb., and chicken is about $2.50 per lb. 

The gap between beef and other proteins has gotten quite large. While I get concerned about hitting price resistance at some point, I do think it’s a testimony to strong beef demand built through significant improvement in quality and eating satisfaction during past decades. 

Supported by high cutout values and tight supplies, the demand for fed cattle translated into prices touching $1.90 per lb. this spring and 550-lb. steers averaging well over $3 per lb. for the first time in history. 

Even with these high price levels, we haven’t seen spreads and premiums between quality levels disappear. There are still significant premiums in the market for Prime and Certified Angus Beef® (CAB) qualifying carcasses and AngusVerifiedSM feeder cattle. 

To the members of the American Angus Association, this strong demand definitely spilled over into the bull sales this spring. We saw almost every operation be able to sell as many or more bulls than last year while still posting an average that was $500 to $1,000 higher than the year before. The price of cull bulls certainly incentivized commercial bull buyers to sell their old bulls and reload with fresh, new genetics. 

The strength and diversity of the Angus breed was also on display throughout the sale season. I don’t know if I have ever witnessed a time when so many different programs with different types of Angus genetics were experiencing such success and strong buyer demand. 

Registered Angus bulls were sought out for calving ease, cow traits, growth and performance, carcass merit, eye appeal, marketability, and many different combinations of traits. Different breeding philosophies aligned with varied bull buyer needs and regional differences. Angus bulls outpaced other breeds from one region to the next while accounting for an estimated 70% of the bulls sold last spring. 

On the horizon

While the demand of the past months is fun to talk about, I am even more encouraged about the demand still to come. 

Through the drought and herd rebuilding in 2014-2015, we saw a significant improvement in the genetics across the U.S. cow herd. That resulted in an increase in quality grade that has supported our pricing levels ever since. As we rebuild the cow herd, I predict another bump in industry grading trends coming. If history repeats itself, and I think it will, that means more satisfied beef consumers and enhanced beef demand.

I am also encouraged by significant growth and demand for AngusLinkSM. Later this summer National Beef will begin paying a $5-per-head premium on their U.S. Premium Beef grid for cattle with AngusLink Genetic Merit Beef Scores over 100. Towards the end of the year, they will add an additional $5 per head on Beef Scores over 150. This move is significant, and represents the first time a packer has paid a direct premium to cattlemen for genetic merit. 

As an Angus breeder, I hope you are proud AngusLink Genetic Merit ScorecardSM (GMS) is leading the industry in describing genetic merit on feeder cattle and putting more dollars in the pockets of cattlemen investing in registered Angus genetics. 

While cattle supplies are historically low and most definitely a major factor in the prices paid, let’s not forget about the other factor — demand. We have incredibly strong demand for our beef, our Angus-influenced fed and feeder cattle, our commercial Angus heifers and our registered Angus seedstock. Without that demand, the economic picture wouldn’t look nearly as exciting.