Grid Premiums

(Bob) Packers paid nearly $1 million per week last year, in grid premiums for cattle that earn the Certified Angus Beef® brand. That’s according to results of a biennial survey of the four major processors in North America. (Suther) That’s just for the Certified Angus Beef premium on the grid. It doesn’t count the extra premiums paid for hitting the choice level, above average choice. It doesn’t count the premium for hitting prime. Prime has become 6 percent of all Certified Angus Beef marketed last year was Prime. So those are always significant premiums not counted in this. (Bob) Last year’s 51.8 million in grid premiums is a new record, but the trend is strong. Nearly all of C-A-B grid premiums across 38 years have come in the last two decades, with more than half in the last six years. (Suther) It shows that we have a very competitive market. That including marketing these cattle on the grid, packers have commented to us that even if you don’t grid your cattle they are still valued on the grid and packer representatives have said on the record that they estimate they’ve paid just as much in the cash market as they have on the grid to get CAB cattle. (Bob) That could push the total added value C-A-B producers have earned to more than a billion dollars, Suther says. (Suther) It doesn’t matter what time in the lifecycle of the calf you sell that animal, whether it’s at weaning or stocker phase or feedlot phase, they are rewarded for hitting the Certified Angus Beef target and for having high quality Angus cattle. (Bob) Producing to meet consumer demand is not a new idea. He says it’s a proven strategy, regardless of the outside factors. (Suther) Well there is a lot more uncertainty coming into the cattle market this year, but it looks like one thing you can still always count on is you’ve got a stable, increasing premium for hitting the Certified Angus Beef target or Prime. (Bob) I’m Bob Cervera.

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