Report of the June-September, 2005 …

                       Report of the June-September, 2005
                          National Beef Quality Audit:
                   A New Benchmark for the U. S. Beef Industry

                    Gary C. Smith, J.W. Savell, J.B. Morgan and T.E. Lawrence
     Colorado State University (Fort Collins, CO); Texas A&M University (College Station, TX);
     Oklahoma State University (Stillwater, OK) and West Texas A&M University, (Canyon, TX)


"In truth, it is the value of our product to our        Incentives for genetics, vaccination, weaning,
consumers that determines what beef is worth--          seasonality,       natural     (hormone/antibiotic
and our profitability. The National Beef Quality        constraints) and carcass characteristics" (Mike
Audit provides valuable information to industry         Smith, Harris Ranch Beef). "Involvement in
stakeholders       regarding    the    monetary         alliances allows beef supply-chain focus upon
consequences of not truly delivering the quality        today's and tomorrow's targets--(a) a safe beef
and value to our consumers" (Terry Stokes,              supply, (b) electronic IAID with age records, (c)
NCBA). "The forces shaping the beef industry            balance in production performance and carcass
in the 21st century (Daryl Tatum, Colorado State        merit, (d) management based upon individuals
University) are: (a) continued consolidation in         rather than on pen/lot averages, (e) avoidance of
all beef sectors; (b) loss of export markets; (c)       `out cattle' (dark cutters, advanced maturity,
greater competition from other countries in the         etc.), (f) control of carcass weight (target=600 to
global     market;     (d)   development     and        949 lb), (g) production of High Select or better,
implementation of traceability/data-management          and Yield Grade 2 or better, carcasses with
systems, and; (e) growth of markets for natural         ribeye areas of 10.0 to 15.9 sq in, (h) adoption
and organic food products." "Beef in the US is          of instrument grading, and (i) tenderness testing
now being sold based upon USDA grades,                  to avoid tough beef" (Glen Dolezal, Cargill
USDA brands, and industry brands; tremendous            Meat Solutions).            "Major trends and
growth has occurred in the last ten years in            opportunities in the US beef industry include:
USDA certified brands and USDA process                  (1) Globalization, and thus increased
verified brands, causing progressively greater          competition.        (2) Retail and foodservice
emphasis on verifying marketing claims and on           consolidation.       (3) Coordinated production
authenticity management for processes and               systems. (4) Increased product branding and
products" (Cara Gerken, IMI Global, Inc.)."             value differentiation.           (5) Accelerated
"Tracking cattle from the ranch to the packer is        development of new consumer-friendly and
essential because export markets will require it,       convenience-orientated beef products" (Randy
Wal-Mart and McDonald's want it, and                    Blach, Cattle·FAX).
producers can benefit from it" (John Paterson,
Montana State University). "A partnership for           "The National Beef Quality Audits provide: (1)
quality (PFQ) can be formed between a beef              A snapshot of the industry's current `Quality
finishing/ harvesting company and progressive           Status.' (b) A `Benchmarking Tool' for the
producers who are strongly focused on the               industry's quality improvement strategy. (c) A
production of a consistent, high quality,               `Driver' for the industry's Beef Quality
consumer-driven product, with the strictest             Assurance, Producer Education Programs" (Ran
standards for food safety, environmental                Smith, Smith Farms, Chairman of BQA
stewardship, economic sustainability and animal         Advisory Board). "The National Beef Quality
welfare. A PFQ makes possible PFQ Program               Audits of 1991, 1995 and 2000 have provided



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valuable industry benchmarks for use by beef             were of Yield Grades 1, 2 plus 3; (d) Incidences
industry stakeholders, and identified areas on           of "calloused ribeye," "dark cutter" and "blood
which to place emphasis in local, state and              splash" were 0.3%, 1.5% and 1.7%,
national Beef Quality Assurance endeavors"               respectively; (e) 31.5% of their purchased
(Gary C. Smith, Colorado State University).              harvest-cattle were individually identified; (f)
"Previous National Beef Quality Audits have              the average number of branded-beef programs
identified Strategies, Tactics and Goals as vision       marketed by these packers was 5.3, with 37%,
directives for those in the production sector who        62%, 48% and 42% of those programs having
wish to be more competitive and find marketing           specifications for breed, marbling, hide color
options--now or in the future, in domestic               and Yield Grade, respectively, and; (g)
and/or international venues" (Tom Field,                 percentages of packers using specific food-
Colorado State University).         "A panel of          safety interventions of hide-on carcass washing,
industry professionals assessed beef-industry            steam pasteurization of carcasses, hot (>165°F)
progress in achieving the twelve `Goals'                 water carcass washing, pre-evisceration carcass
identified by the National Beef Quality Audit--          washing, steam vacuuming of carcasses, and
2000; individually, grades as low as D-plus              organic-acid rinsing/washing of carcasses were
(develop and implement electronic cattle                 16.7, 16.7, 66.7, 83.3, 100.0 and 100.0,
identification) and as high as B-plus (eliminate         respectively (Deb Roeber, Oklahoma State
injection-site lesions; 100% of seedstock                University). The "Top Five Greatest Quality
producers have genetic data) were assigned, and          Challenges," in NBQA-2005, identified by
the overall average grade for the beef industry          packers were: (1st) Reduced Grade &
was B-minus" (Clint Peck, Beef Magazine).                Tenderness Due To Use Of Implants; (2nd) Lack
                                                         Of Uniformity In Live Cattle; (3rd-Tie) Carcass
Based on questionnaires returned by those in the         Weights Too Heavy; (3rd-Tie) Yield Grades Too
seedstock generation, cow/calf production,               High; (5th-Tie) Presence Of Bruises On
stocking/backgrounding and feedlot finishing             Carcasses, and; (5th-Tie) Hide Damage Due To
sectors, the "Top Ten Greatest Quality                   Hot-Iron Brands. Among packers, 33%, 67%,
Challenges,"     in    NBQA--2005,        ranked         and none (0.0%) believed that past NBQAs had
according to aggregated responses by those in            "strong," "moderate" or "weak" impact,
all four production sectors were: (1st)                  respectively, on "changes made since 1991."
Insufficient Marbling & Low Quality Grades;
(2nd) Lack Of Uniformity In Cattle; (3rd)                Based on questionnaires returned by those in the
Inadequate Tenderness Of Beef; (4th) Yield               purveyor, restaurateur and supermarket operator
Grades Too High; (5th-Tie) Low Cutability; (5th-         sectors,    "Special     Concerns/Desires       Of
Tie) Carcass Weights Too Heavy; (7th)                    Customers/Consumers" were: (1st) E. coli
Injection-Site Lesions; (8th) Inadequate Flavor;         O157:H7; (2nd) Hormone Residues; (3rd) Desire
(9th) Inadequate Muscling, and; (10th) Excess            For "Natural" Products; (4th) Antibiotic
Fat Cover (Deb Roeber, Oklahoma State                    Residues; (5th) Desire For Traceback; (6th)
University). Aggregated responses by those in            Concerns About Animal Welfare; (7th)
all four production sectors revealed that 26.5%,         Salmonella; (8th) Listeria monocytogenes; (9th)
55.4% and 18.1% believed that past NBQAs                 Desire For "Organic" Products; (10th) Price;
had "strong," "moderate" or "weak" impact,               (11th) Concerns About The Environment, and;
respectively, on "changes made since 1991."              (12th) BSE (Deb Roeber, Oklahoma State
                                                         University). The "Top Ten Greatest Quality
Questionnaires returned by packers revealed              Challenges,"     in    NCBA--2005,          ranked
that: (a) 92.1% of their carcasses weighed 600           according to aggregated responses by those in
to 1,000 lb; (b) 66.2% of their carcasses graded         the three end-user sectors were; (1st) Insufficient
Prime or Choice; (c) 86.5% of their carcasses            Marbling; (2nd) Cut Weights Too Heavy; (3rd)


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Lack Of Uniformity In Cuts; (4th) Inadequate            of eight trade organizations (AMI, USMEF,
Tenderness; (5th) Excess Fat Cover; (6th)               FMI, NAMP, NRA, SMA, NMA, NBCA)
Inadequate Juiciness; (7th) Inadequate Flavor;          identified       the      following      "Quality
(8th) Inadequate Overall Palatability; (9th) Low        Defects/Challenges": (1st) Lack Of Mandatory
Cutability, and; (10th) Too Large Ribeyes.              Traceability, ID System And NAIS Compliance;
Among end-users, 15%, 85% and none (0.0%)               (2nd-Tie) Product Inconsistency; (2nd-Tie) Food
believed that past NBQAs had "strong,"                  Safety:
"moderate" or "weak" impact, respectively, on           Pathogens/Bacteria/EHEC/Salmonella/Listeria
"changes made since 1991."                              monocytogenes; (4th-Tie) BSE; (4th-Tie)
                                                        Growing Concern About Humane Handling,
Brad Morgan (Oklahoma State University)                 Animal      Welfare/Husbandry,       And     The
                                                                                 th
reported results of a US Meat Case Benchmark            Environment;           (6 -Tie)        Inadequate
Study which determined that: (1) 68% of the             Tenderness/Palatability, & Too Low Quality
average self-service meat case was comprised of         Grade;       (6th-Tie)      Appropriate     SRM
"fresh" meat items; fresh beef (29%), chicken           Removal/Disposal & Lack Of 4-D Animal
(16%) and pork (14%) had the highest                    Disposal; (8th-Tie) Growing Concern About
proportions of meat department case footage.            Chemical Residues; (8th-Tie) Carcass/Cut
(2) 43% of fresh beef cut packages and 34% of           Weights Too Heavy And Inconsistent; (10th-Tie)
ground beef packages had cooking instructions           Shelf-Life; (10th-Tie) Lack Of Age/Source
on the package; 9% of all fresh beef packages           Verified Cattle; (10th-Tie) Growing Concern
had nutrition labels. (3) Of the 87% of all fresh       About Antimicrobial Resistance; (10th-Tie) Poor
beef packages (13% was as offals, ingredients,          Meat Color And pH Variation In Ground Beef
miscellaneous), 43 percentage points (pp) was           And Beef Trimmings, and; (10th-Tie)
steaks, 30 pp was ground and 14 pp was roasts.          Susceptibility To Foreign Animal Disease,
(4) 3% of beef packages were "value added"              Agroterrorism And Bioterrorism (Keith E. Belk,
compared to 14%, 10% and 7% for chicken,                Colorado State University).
pork and turkey, respectively. (5) 1.5% of beef
packages were "Natural" or "Organic,"                   Martin E. O'Connor (Standardization Branch,
compared to 6.5% for chicken. (6) 82% of beef           AMS-USDA) reported that, of all beef carcasses
steak packages, and 93% of beef roast packages,         officially graded by AMS-USDA (not all of the
were "boneless." (7) 62%, 21%, 6% and 10%               total carcass population), percentages of Prime,
of ground beef packages were designated by              Choice, Select and Standard were 5%, 79%,
leanness percentage (e.g., 85% lean), by cut            15% and 0.7%, respectively, in 1975 and 3%,
source (e.g., ground round), by both leanness           57.5%, 39% and 0.4%, respectively, in 2004.
percentage and cut source, and as just "ground          Percentages per se of carcasses officially graded
beef" with no designation/source, respectively.         as Prime or Choice have decreased over time--
(8) Beef had the lowest case-ready penetration          from 1975 to 2004. However, in 1975 only
at 27%; pork, chicken and turkey had 37%, 83%           about 30% of the carcasses that would have
and 85%, respectively, case-ready penetration.          qualified for Select--had they been officially
(9) 46%, 56% and 20% of all steak, roast and            stamped--were actually graded Select (then
ground beef items (SKUs), respectively, were            named "Good")--the remainder were sold
out-of-stock (00S); for all three kinds of fresh        ungraded (as "No Rolls").
beef products, case-ready products were less
likely to be OOS than store-wrapped products.           Once "Good" was changed to "Select," a market
                                                        developed for beef of that grade and, now,
Face-To-Face Interviews of representatives of           almost all beef qualifying for Select is officially
six government agencies (FSIS, AMS, GIPSA,              graded as such. If percentages of carcasses
FAS, APHIS, FDA/CVM) and representatives                qualifying for Prime or Choice in the two index


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years are adjusted to account for the fact that the       Choice changed from 1.7%, 21.7% and 35.3%,
numerators are not equivalent (use of "all                respectively, in 1995, to 7.3%, 27.9% and
carcasses officially graded" as numerators, to            34.9%, respectively, in 2005; (k) Percentages of
determine percentages, results in an apples vs.           carcasses grading Yield Grade 1, 2, 3, 4 and 5
oranges contrast in 1975 vs. 2004), the apparent          changed from 7.2%, 44.1%, 41.1%, 7.4% and
differences of a 2 percentage point (pp) decline          0.2%, respectively, in 1995, to 9.4%, 37.7%,
in Prime and a 21.5 pp decline in Choice, from            41.6%, 9.9% and 1.6%, respectively, in 2005,
1975 to 2004, become 1 pp in Prime and 6.2 pp             and; (l) Percentages of carcasses that were A vs.
in    Choice.         Martin     E.     O'Connor          B maturity were 97.8% and 2.2%, respectively,
(Standardization Branch, AMS, USDA) also                  in 1995, and 86.1% and 13.9%, respectively, in
reported that of all beef carcasses officially            2005.
graded by AMS-USDA, percentages of Yield
Grades 1, 2, 3, 4 and 5 were 2%, 31%, 64%, 3%             Brad Morgan (Oklahoma State University)
and 0.2%, respectively, in 1975 and 10%, 42%,             summarized assessments of cattle on harvest
41%, 7% and 0.3%, respectively, in 2004.                  floors--hide on, reporting that: (a) 49.5%,
Again though, not all carcasses are officially            39.5%, 13.8% and 2.6% had no brands, butt
assigned Yield Grades so the meaning of such              brands, side brands, and shoulder brands,
comparisons is unclear. For example, AMS-                 respectively; (b) 49.5%, 42.5%, 6.5% and 1.5%
USDA performed a "consist study," covering                had 0, 1, 2 and 3 or more brands, respectively;
parts of 1973 and 1974, in which the                      (c) 76.3% of cattle had no horns; (b)
percentages (based upon grading a random                  Percentages of cattle with predominant (51%)
population of carcasses) of Yield Grades 1, 2, 3,         hide color of black, red, yellow, Holstein, grey,
4 and 5 were 0.4%, 26%, 43%, 21% and 6%,                  white, brown and brindle were 56.2%, 18.1%,
respectively.                                             5.1%, 8.7%, 5.2%, 2.1%, 3.7% and 1.0%,
                                                          respectively; (e) Cattle with no manure on their
John Scanga (Colorado State University)                   body vs. manure on their legs, belly, side,
presented results of carcass data contributed by          topline or tail were 19.6% vs. 69.8%, 61.9%,
cooperating     packing    companies,     which           21.4%, 10.5% and 20.8%, respectively; (f)
demonstrated that from 1995 to 2005 YTD: (a)              Amounts of manure on the bodies of cattle
Average hot carcass weight increased from 740,            characterized as "none," "small," "moderate,"
to 749 lb; (b) Average number of branded-beef             "large" or "extreme" were 19.6%, 63.9%,
programs increased from 1.33, to 6.25; (c)                16.4%, 2.7% and 0.1%, respectively. (g) Cattle
Average number of "Angus" programs                        with manure in 1, 2, 3, 4, 5 or 6 locations were
increased from 0.67, to 3.00; (d) Average                 18.9%, 18.7%, 34.2%, 18.6%, 6.8% and 2.9%,
number of grade-based, but not Angus-based,               respectively, and; (h) 11.3% of harvest cattle
programs increased from 0.33, to 1.25; (e)                had no visible form of identification, while
Average number of "Natural"/"Grass-Fed"                   2.5%, 0.5%, 33.5%, 62.4%, 12.7% and 3.3%
programs increased from 0.50, to 2.25; (f)                had electronic, barcode, individual visual, lot
Percentage of harvest cattle purchased on a               tag, metal clip or "other" forms of identification.
"grid" increased from 15%, to 34%; (g)
Percentage of harvest cattle purchased "in the            Jeff Savell (Texas A&M University)
beef" increased from 20%, to 26%; (h)                     summarized assessments of carcass and offal on
Percentage of harvest cattle purchased as                 harvest floors, reporting that: (a) 24.8%, 10.6%,
"source verified" increased from 0.4%, to 1.5%;           7.8%, 4.8%, 8.9% and none (0.0%) of livers,
(i) Percentage of harvest cattle purchased as             lungs, tripe, heads, tongues and carcasses,
"age verified" increased from none, to 1.0%; (j)          respectively, were condemned on the harvest
Percentages of carcasses grading Prime, Upper             floor; (b) 0.47% of all cattle contained a fetus;
Two-Thirds Choice and Lower One-Third                     (c) 54.2%, 18.5%, 0.3%, 6.6% and 20.3% of


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condemned livers were due to abscess, flukes,             Upper Two-Thirds Choice, Lower One-Third
>30 MOA, contamination or "other" causes,                 Choice, Select, Standard, Commercial or Utility,
respectively; (d) 40.7%, 2.9%, 0.4%, 20.5% and            respectively; (g) 0.2%, 0.4%, 1.4%, 84.3%,
35.6% of condemned lungs were due to                      8.9%, 3.7% and 1.1% of carcasses had hot
pneumonia, abscess, >30 MOA, contamination                carcass weights of 1,000
2.8%, 0.8%, 24.0% and 43.9% of tripe                      lb, respectively; (h) 15%, 37%, 33%, 13% and
condemnations were due to abscess, ulcer, >30             2% of carcasses were assigned Yield Grades of
MOA, contamination or "other" causes,                     1, 2, 3, 4 or 5, respectively; (i) 70.0% of all
respectively; (f) 19.3%, 0.4%, 3.2%, 9.0% and             carcasses had no discounts; (j) 1.1%, 13.0%,
68.1% of head condemnations were due to                   5.4%, 2.6%, 2.2%, 2.0%, 1.4%, 1.1%, 0.8% and
inflamed lymph nodes, abscess, >30 MOA,                   0.5% of all carcasses had discounts for excess
contamination or "other" causes, respectively;            weight, Yield Grade 4, Standard or lower, dark
(g) 12.3%, 27.8%, 22.5%, 2.5%, 0.3% and                   cutter, Yield Grade 5, insufficient weight, >30
34.7% of tongue condemnations were due to                 MOA, C maturity, blood splash or yellow fat,
inflamed lymph nodes, hair sores, cactus                  respectively.
tongues, contamination, >30 MOA or "other"
causes, respectively; (h) 64.2%, 25.4%, 7.9%,             At     the   Strategy     Workshop,    industry
1.9%, 0.5% and 0.01% of cattle had no, 1, 2, 3,           representatives offered suggestions regarding
4 or 5 or more bruise(s), respectively; (i) Of            Strategies, Tactics and Goals for reducing
bruises on carcasses, 9.9%, 35.5%, 21.2%,                 quality     defects     and    nonconformities;
23.6% and 9.3% were located on the round,                 contributing ideas were Jeff Windett (Circle A
loin, rib, chuck or flank/plate/brisket,                  Ranches), John Edwards (Express Ranches),
respectively; (j) Percentages of cattle with 0, 1,        Tom Woodward (Broseco Ranches), Charles
2, 3, 4, 5, 6, 7 or 8 permanent incisors were             Nichols (Nichols Ranches), Mike Engler
83.1%, 5.5%, 8.7%, 0.6%, 1.5%, 0.1%, 0.3%,                (Cactus Feeders), Tony Bryant (Five Rivers
0.03% and 0.05%, respectively.                            Cattle Feeders), Rod Bowling (Smithfield Beef
                                                          Company), Bruce Bass (Tyson, Inc.), Paul
Ty Lawrence (West Texas A&M University)                   Heinrich (Sysco, Inc.), Fred Ray (OutWest Meat
summarized assessments of carcasses in coolers,           Company),       Molly       McAdams      (HEB
reporting that: (a) 92.0%, 7.2% and 0.8% of               Supermarkets) and Greg Henderson (Drovers
carcasses were characterized as of native, dairy          Journal).
or Brahman (>4 in hump) genetic type,
respectively; (b) 62.7%, 37.3% and 0.06% of               Participants ranked "Quality Challenges,"
carcasses were of steer, heifer or bullock                periodically, during conduction of the Strategy
gender, respectively; (c) No (0.0%), no, 2%,              Workshop and ultimately identified the
5%, 14%, 37%, 37%, 2% and no carcasses had                industry's "Top Ten Quality Challenges" as:
USDA marbling scores of abundant, moderately              (1st) Lack Of Traceability/Individual Animal
abundant, slightly abundant, moderate, modest,            ID/Source & Age Verification/Chronological
small, slight, traces, or practically devoid,             Age. (2nd) Low Overall Uniformity Of Cattle,
respectively; (d) 97%, 2%, 1%, no (0.0%) and              Carcasses & Cuts.             (3rd) Need For
no carcasses had USDA maturity scores of A, B,            Implementation Of Instrument Grading. (4th)
C, D or E, respectively; (e) Of A maturity                Inappropriate      Market    Signals.        (5th)
carcasses, no (0.0%), no, 1%, 13%, 30%, 25%,              Segmentation Of Groups Within The Beef
18%, 6% and 3% were A10, A20, A30, A40, A50,              Industry. (6th) Carcass & Cut Weights Too
A60, A70, A80 or A90, respectively; (f) 2.9%,             Heavy. (7th) Yield Grades Too High/Low
17.0%, 36.2%, 38.5%, 4.2%, 0.7% and 0.5% of               Cutability. (8th) Inappropriate Ribeye Size (Too
carcasses had USDA quality grades of Prime,               Small Or Too Large). (9th) Reduced Quality


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Grade & Tenderness Due To Use Of Implants.               controlling weight; increasing marbling;
(10th) Insufficient Marbling (Deb Roeber,                decreasing     variation,  and;    maximizing
Oklahoma State University).                              profitability.       (3)  Expand    marketing
                                                         opportunities (in domestic and global markets)
With regard to "What Is The Beef Industry                by developing traceability systems; verifying
Doing Well?", Ty Lawrence (West Texas A&M                source and age; reducing costs and waste in the
University) reported that the beef industry was          beef value chain, and; continuing new product
doing a good job of: (a) Developing "story"              development.      (4) Strengthen connections
beef. (b) Reducing E. coli O157:H7, (c)                  among segments of the beef supply chain via
Merchandising "quick" (to prepare) beef. (d)             communication and targeted educational
Merchandising new beef "value" cuts. (e)                 programs.
Reducing excess fat cover, at the end-user level.
(f) Developing "brands" of beef. (g) Increasing          Tom Field (Colorado State University)
beef demand.       (h) Making the industry               described the "Goals" for improving the quality
profitable.                                              of beef as: (1) Deliver Product Attributes That
                                                         Meet Consumer Needs and Expectations &
Daryl Tatum (Colorado State University)                  Build Global Beef Demand. (2) Improve The
described "Key Messages From The NBQA--                  Market Cattle Supply. (3) Expand Market
2005 Strategy Workshop" as: (1) Deliver                  Opportunities For US Beef. He also described
product attributes that meet consumer                    the means for increasing beef's competitiveness
needs/expectations for safety, taste, color and          as: (a) Prevent food safety and animal disease
convenience. (2) Improve the cattle supply by            problems, (b) Maximize quality; eliminate
implementing instrument grading; reducing                variation, and (c) Optimize net consumer value;
numbers of carcass grading Yield Grade 4 or 5;           eliminate waste.




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