A Packer's Perspective on Consumer Beef Demand with Glen Dolezal

Regardless of where you fall within the beef industry, one of the many things we can agree on is our mutual goal of providing a quality product to consumers. 
 
 Today’s host Miranda Reiman sat down with Glen Dolezal of Cargill Protein to discuss pressure points within the beef industry, what consumers are looking for and how the demands of consumers reflect on the beef industry as a whole.

They discuss: 

• Beef industry history and current markets
• How beef producers are continually improving fed cattle
• What consumers are prioritizing when making buying decisions 
• And more! 

Find more information to make Angus work for you in the Angus Beef Bulletin and ABB EXTRA. Make sure you're subscribed! Sign up here to the print Angus Beef Bulletin and the digital Angus Beef Bulletin EXTRA. Have questions or comments? We'd love to hear from you! Contact our team at abbeditorial@angus.org.

Transcript

Lynsey McAnally:
Angus at Work, a podcast for the profit-minded cattleman. Brought to you by the Angus Beef Bulletin, we have news and information on health, nutrition, marketing, genetics, and management. Let's get to work, shall we?

Hello and welcome back to Angus at Work. Regardless of where you fall within the beef industry, one of the many things we can all agree on is our mutual goal of providing a quality product to consumers. Today's host, Miranda Reiman, sat down with Glen Dolezal of Cargill Protein to discuss pressure points within the beef industry, what consumers are looking for, and how the demands of consumers reflect on the beef industry as a whole. Let's dive in.

Miranda Reiman:
Hello and welcome to the Angus at Work podcast. I'm your host Miranda Reiman, and I've been spending the last couple of days here at the Feeding Quality Forum in Lincoln, Nebraska, and I've got Glen Dolezal with Cargill Protein here to join me. Hey, Glen.

Glen Dolezal:
Hello everyone. It's great to be here thinking about pressure points that are impacting our industry today. First of all, I'd like to start by saying the quality of beef's never been higher. I mean, when I first came to work at Cargill in '99, we were lucky to grade 50 to 55% Prime and Choice, and we had very ... CAB was around since '78, but boy, look how much it's grown. Quality of beef's high, COVID even accentuated that even more. We took some critical steps in the industry along the way that improved the quality of beef. It started with Angus breeders and genetics. It started with better management. We're going to go through that transition again. Many of you can reflect back to 2012, 2013, we had another major drought, and we closed one of our major plants in Plainview, Texas. And we saw data today at this CAB feedlot forum where we improved genetics and replacements. We haven't really started rebuilding the herd yet, because we're still in drought conditions in some areas, but hopefully when we rebuild again this year, we're going to continue to improve the genetics to produce high quality, tender, juicy, and rich flavor in beef, so that we can maintain these high prices and strong demand for beef.

Miranda Reiman:
I think I saw that slide was 82% Choice grading right now. I think the one question that comes to mind oftentimes to producers is how much is too much? I mean, are you going to still pay us for that if we continue to make the cattle better?

Glen Dolezal:
Yeah. I think that we'll definitely continue to pay. The strength and quality has accelerated so much that I really think about commodity, Low Choice beef today is the new select and select beef is the new no roll, which is below select. We're trying to push everything up into modest or higher, like Certified Angus Beef is, and into Prime, and CAB Prime is even taking off. We've added another plant where we actually sort CAB Prime.

Miranda Reiman:
I would say if you had a one thesis sentence to your presentation, it would be that we're doing really good, quality's increased quite a bit, but you don't want to go backwards. So, what are some of those threats that you see out there for quality grade we have today?

Glen Dolezal:
Yeah. We've surpassed the 80s. We did that a lot of different ways. As I said earlier, good management and good genetics. We've got to keep the heat on those, and like I said, coming out of the drought, that should improve.
We're always confronted with new technologies or shortcuts to improve efficiency or improve rate of growth. The ones that I'm most worried about is we have to optimize. We have to stay balanced. And if we go too extreme and push mother nature too hard, some of these cattle, their hearts can't handle it. We had a big fiasco last year on congestive heart failure. CAB's funding research in that, and American Angus, and we got to keep a handle on that, that we can reach a point to where we don't need baby elephants. We've got to make sure these cattle can handle the heat, mother nature, the extremes they get thrown at them, and it's the same thing with new technology that may change and animals' natural ability to gain and perform. We've got to make sure we don't stretch that to the limit that we drop 10% in grade, we lose a third of our CAB. That would be a nightmare for customers that are committed to the brand today.

Miranda Reiman:
And talk a little bit about how much of that is genetics and how much of it is management. I mean, it's not one single segment, but really it's everybody working together.

Glen Dolezal:
Absolutely. When I first came to Cargill in '99, I focused on [inaudible 00:05:17], and I thought as a meat scientist I could make a silk purse out of a sow's ear. And we got on probation right away with Safeway. They were on our brand, and if we flunked a test two months in a row with them that they were performing on our tenderness, we lost our premium. We lost that incentive, so we had to sell them at commodity price. It didn't take long, we flunked two months in the year, and we had to look back. That's when we put in value-based procurement. We started looking at things like time on feed, animal type, de-emphasizing high percentage Brahman influence, some aspects like that. And we started tracking different suppliers and producers, so that we could disqualify. We still bought the cattle, but we kept them out of the brand or whatever the case may be.
You got to have a system of checks and balances. Without good genetics, it's more difficult. If you try to cut corners on management, you can wreck good genetics. It's just like cooking a great steak. You can overdo it. There are a lot of examples of where you can tear things up that that's why we have to work together and keep doing best practices at every part of our business.

Miranda Reiman:
With your link, where you're at, and being that much closer to the consumer, you had a slide up there that talked about how you can hopefully guarantee a good eating experience almost all the time. How much of that is made up of tenderness, how much of it is flavor, et cetera?

Glen Dolezal:
Yeah. And it was study done. It was Beef Checkoff study done. It was a study done at four Cargill plants, over 700 carcasses of Colorado state. They served medium degree of doneness steaks aged for two weeks to train panelists, and they concluded that if you could control tenderness, which is one of the most variable traits in beef cattle, flavor can be masked by salt, pepper, spice, bourbon, juiciness is largely predicated upon degree of doneness. But they also sets things like ... If you control tenderness and the second most important factor, another 10% was richness of flavor. It's like putting butter on popcorn, butter on a baked potato. It can be pretty dry and bland, like a chicken breast, if you don't add some flavor. Marbling does that naturally, which has been a game changer for Certified Angus Beef over time.
We know now that a lot of consumers, because of concerns over food safety and ground beef, cook their meat over 160 degrees Fahrenheit internal temperature, even steaks. You need that upscale marbling and Certified Angus Beef Choice and Certified Angus Beef Prime to be able to buffer that degree of doneness harshness, because the marbling will hold in some juiciness and some moisture, as well as flavor.

Miranda Reiman:
We've seen those trends go up. That's obviously an insurance policy, so to speak. But now as we've kind of taken care of some of those quality concerns maybe we had a couple of decades ago, what are some other things that consumers are looking to you for claims on their product or to know that you're doing the right thing, et cetera?

Glen Dolezal:
Early on, it was all about food safety. That was table steaks. If you were going to stay in business, you had to provide safe product, whether it's ground beef, steaks, roasts, whatever the case may be. Now it's transitioned into animal welfare. If you have a wreck in animal welfare, it hurts everyone in the industry, not only packers, it hurts feedlots, it hurts stockers, it hurts cow calf, it hurts seed stock, because it gives our beef industry somewhat of a black eye.
Now, we're having a lot of requests about ... Everybody wants to get on this sustainability bandwagon, so we've got a concentrated effort. Dr. Nick Hardcastle on our team is focusing on sustainability initiatives in the beef space. We're doing a lot of lifecycle assessments with UC Davis, and we're trying to match that.
I, for one, I'm old school. I believe that we have a lot of best practices already in sustainability in the beef industry. We just don't tell our story very much, but that's starting to come to light. This sustainability is almost like a new marketing claim, and I guess it appeals to millennials and Gen Z, so right or wrong, we're going to have to tell our story on sustainability on the best practices we have in that arena.

Miranda Reiman:
Sure. From the stage, I heard you recommend that everybody get BQA certified if they're not already using the beef quality assurance program and is a good way to tell our story. I think this pretty much recaps what you said on stage. The last question we always ask, there's enough bad news out in the world today. Tell us something good, whether it's personal or professional, just a bit of good news.

Glen Dolezal:
Well, again, my story is all about the quality of beef. Beef is expensive compared to competing proteins, and it's delivering on the promise, and we're not backing up on demand yet. We may see a little trading down as things get tight and inflation continues to go up, trading down to ground beef. But boy, beef still has a great perception relative to what it delivers on taste and performance for the value paid for it.

Miranda Reiman:
Excellent. Thanks so much for joining us today.

Glen Dolezal:
Thank you.

Lynsey McAnally:
Listeners, for more information on making Angus work for you, check out the Angus Beef Bulletin and the Angus Beef Bulletin Extra. You can subscribe to both publications in the show notes. If you have questions or comments, let us know at abbeditorial@angus.org. And we would appreciate it if you would leave us a review on Apple Podcast and share this episode with any other profit-minded cattlemen. Thanks for listening. This has been Angus at Work.