March 2, 2010


Certified Angus Beef premiums reach US$300 million



Cumulative grid premium rewards for hitting the Certified Angus Beef (CAB) brand target stood at nearly US$300 million at the end of last year, and continues growing at an annual rate of about US$25 million paid to producers.


That is the five-year average according to a January 2010 survey; the second-highest total for that span was 2008, with US$25.5 million in premiums reported.


''The average payout of US$98,000 per working day for the last three years shows the continuing relevance of this brand as a producer target,'' said Brent Eichar, CAB senior vice president.


Over the last two years, CAB product sales by some 15,000 licensees worldwide have increased by more than 110 million pounds, noted Larry Corah, CAB vice president for supply development.


In the biennial survey, leading CAB-licensed packers shared figures on condition that no individual company numbers would be reported. Tyson, Cargill, JBS-US and National Beef checked actual CAB premiums paid in 2007 and reported totals for the next two calendar years.


These figures do not include the related premiums for Yield Grades, USDA Choice over Select, Prime over Choice, source- and age-verified, nor the cash live bonuses often paid for expected CAB acceptance.


Through the years, licensed packers have been the source of funding for the branded beef program based on fees that average two cents per pound of CAB product sold - a cumulative US$167 million in commissions on 8.3 billion pounds.


Although some grids maintain a steady CAB premium in the area of US$5 per hundredweight (cwt.), the average per head through all grid and formula selling has declined slightly.

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