Academic journal article Journal of Agricultural and Applied Economics

Valuing Fed Cattle Using Objective Tenderness Measures

Academic journal article Journal of Agricultural and Applied Economics

Valuing Fed Cattle Using Objective Tenderness Measures

Article excerpt

Beef tenderness is critical in consumer satisfaction with beef steak products. Current fed cattle valuation systems do not differentiate carcasses based upon tenderness variation. However, considerable research indicates consumers are willing to pay more for tender relative to tough beef steak. This article develops a tenderness-augmentation to current fed cattle grid pricing systems. Using a large set of actual carcasses, we determine that a tenderness-augmented price grid would reorder fed cattle value by on average nearly $5.00/cwt dressed relative to current valuation methods. Substantial opportunity is present to improve beef tenderness through new price signals to producers.

Key Words: beef quality, meat tenderness, cattle value, cattle price

JEL Classifications: Q11, Q13, M31

Tenderness is one of the most important attri- butes affecting consumer eating experience for beef products. Lusk et al. found that when consumers were provided information regard- ing beef steak tenderness together with com- pleting a taste test, 90% of them preferred a tender relative to a tough steak. Furthermore, 51% were willing to pay an average premium of $ 1 .84/Ib for a tender relative to a tough steak. Many studies have found similar results (e.g., Boleman et al.; Lusk and Schroeder; Miller et al.; Platter et al.; Shackelford et al. 2001). Though tenderness of beef is affected by a number of factors including processing, aging, and food preparation, cattle producers have important influence on beef tenderness through genetics and animal feeding protocols (Tatum). Despite the importance of beef tenderness to consumers, and the ability of producers to influence beef tenderness, fed cattle valuation systems that pay price differentials for cattle with varied beef tenderness levels have not been developed.

The purpose of this study is to develop a tenderness-based fed cattle valuation system that could be used to augment current grid pricing systems. The tenderness-augmented grid is used to assess how fed cattle valuation would change if it were adopted. Using a large random sample of cattle carcasses we estimate the amount of price adjustment fed cattle would typically realize if a tenderness price adjustment were added to current cattle pricing systems.

Fed cattle are valued using predominantly one of two methods, (1) a live (or dressed) price, or (2) a grid pricing system. In live or dressed pricing, all animals in a pen receive the same average price. Under grid pricing, cattle are valued based upon individual carcass quality and yield grade attributes. Yield grade is used to predict red meat yield of the carcass and quality grade is intended to reflect differences in eating quality of beef products obtained from a carcass. However, beef tenderness is not strongly related to quality grade. That is, many Choice grade carcasses produce tough steaks and many Select grade carcasses produce tender steaks. Wheeler, Cundiff, and Koch found that shear force (a mechanical measure of tenderness) as well as sensory panel tenderness and juiciness ratings improved only slightly as marbling increased. Marbling is the dominant determinant of beef quality grade. Furthermore, marbling explained only 5% of the variation in product palatability across carcasses. Wulf et al. found a correlation of only -0.12 between marbling and shear force value and the correlation between marbling and consumer panel tenderness ratings of beef products was only 0.11 whereas they found a correlation between shear force and consumer rated tenderness of - 0.76).1

In addition to tenderness, other product quality attributes including flavor and juiciness are also important beef product quality and eating experience attributes (Killinger et al.). Beef flavor is strongly associated with marbling and beef quality grade (Tatum).2

As such, we propose a carcass valuation method that augments, instead of replaces, current grid pricing systems to maintain a premium or discount for flavor associated with quality grades. …

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