Cargill beef earns tenderness claim

Cargill beef earns tenderness claim

New AMS "tender" and "very tender" standards approved last year.

TENDERNESS is a critical component of an enjoyable beef eating experience, and Cargill has become the first major processor to earn certification under the U.S. Department of Agriculture's new tenderness marketing standards.

The company's tenderness lab in Wichita, Kan., and processing plants at Dodge City, Kan.; Schuyler, Neb.; Ft. Morgan, Colo., and Friona, Texas, have been certified by USDA for the harvest, fabrication and packaging of certified tender products.

Cargill began testing on producing a consistently tender beef product in 2000, focusing on a product concept that would translate into increased beef demand. Plans call for introducing certified tender products in early 2014.

USDA announced last October that it had launched new guidelines for tenderness marketing claims that could be certified by its Agricultural Marketing Service (AMS) based on draft standards that had been published in January 2012. Ten cuts of beef are eligible for designation as "USDA tender" or "USDA very tender" under the certification.

Firms seeking USDA certification must provide documentation explaining how they will meet the requirements of the American Society for Testing & Materials international tenderness standard, describe the process with a documented quality management system and demonstrate conformance with certain key performance elements elaborated in the tenderness certification standard. Among those performance elements are annual testing of the firms' shear force assessment equipment, a tenderness sampling plan and product traceability.

Having met those requirements and earning AMS certification, Cargill can now use the official USDA tenderness shields on eligible products, much like the familiar USDA quality grade shields.

"We know that beef attributes such as tenderness, flavor and juiciness are important to consumers, and the long-term health of the American beef industry hinges on our ability to consistently deliver the best possible beef eating experience," Cargill Beef president John Keating said. "We believe Cargill is the beef processing leader in the area of tenderness and testing. We invest a substantial amount of resources in this area."


Adding value

Cargill could be wise to invest its significant resources in developing and marketing "certified tender" products. Two studies conducted in 2001 that are still frequently cited by economists suggest that consumers are willing to pay a premium for tender beef.

The first study found an estimated average premium of $1.84/lb. for rib-eye steaks following consumer taste testing specifically focused on tenderness. Another found that participants were willing to pay an additional 50 cents/lb. for a strip loin steak described as "tender select."

In a 2012 review of USDA's proposed tenderness certification program, however, Kansas State University economist Glynn Tonsor cautioned that studies projecting consumer "willingness to pay" (WTP) for a single product trait may be overestimated when assessed absent pre-existing marketing claims and consumer preferences for those existing label components.

"Consumers make inferences from meat label attributes about attributes which are not explicitly shown to them in experiments," he explained. "Previous examinations of WTP for tenderness in isolation might overestimate what consumers might actually willingly pay in a retail setting where meat products carry information on multiple attributes."

Tonsor speculated that a USDA tenderness standard might have a significant effect on the value of existing products or marketing claims that consumers may currently associate with tenderness. For example, some current AMS process-verified programs include verified claims that likely obtain at least some of their perceived value from consumers' inferences on quality attributes such as tenderness.

However, gauging the economic impact of a tenderness standard is not easy. Tonsor pointed to a range of estimates published over the past decade suggesting a gross annual retail value anywhere from as little as $340 million to as much as $7.6 billion.

Economists Jayson Lusk and Robert Weaber computed that $7.6 billion net present value based on effective selection of bulls in the top 30% of genetic merit for tenderness.

Lusk and Weaber found that of the projected economic benefit, 3% would flow to packers, 7% to feedlot operators and 49% to cow/calf and stocker operators. Consumers and retailers would reap the balance of the economic impact, according to the study.

Volume:85 Issue:31

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