Market Update with Paul Dykstra | Fall 2025

It’s no secret that the cattle market is looking great with few – if any – signs of changing directions soon. But with prices as high as they are, where can producers capture additional value? And what role does working with your feeder or packer play in product making it to the meat case? 

On this episode of Angus at Work we welcome you to listen in as we visit with Paul Dykstra, director of Supply Management and Analysis at Certified Angus Beef, about:

• His role at Certified Angus Beef,
• Premiums associated with Certified Angus Beef programs,
• How cattle qualify for Certified Angus Beef and what might keep them out of the program. In addition,
• His presentation from Feeding Quality Forum held Aug. 14-15 in Rochester, Minn., 
• How relationships are critical to the continued overall success of the beef industry,
• And more! 

A huge thank you to Vermeer for their sponsorship of this episode. 

Additional Resources:

• CAB FAQs including brand specifications
• Targeting the Brand™
• Get the CAB Insider
• Subscribe to the Angus Beef Bulletin EXTRA

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

Intro (00:19):
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. So let’s get to work, shall we?

Lynsey McAnally (00:29):
It’s no secret that the cattle market is looking great with few – if any – signs of changing directions soon. But with prices as high as they are, where can producers capture additional value? And what role does working with your feeder or packer play in product making it to the meat case?

On this episode of Angus at Work we welcome you to listen in as we visit with Paul Dykstra, director of Supply Management and Analysis at Certified Angus Beef, about his role at CAB, premiums associated with CAB programs and, how cattle qualify for CAB as well as what might keep them out of the program. In addition, Paul shares with us his presentation from Feeding Quality Forum held Aug. 14-15 in Rochester, Minn., and how relationships are critical to the continued overall success of the beef industry.

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Lynsey McAnally (01:50):
Welcome to Angus at Work I'm your host Lynsey McAnally, and today we have a repeat guest with us. Thanks for being with us, Paul.

Paul Dykstra (01:58):
Glad to be here, Lynsey. Thank you.

Lynsey McAnally (01:59):
Yes sir. I'm thankful you could join us on Angus at Work for our quarterly market update. For anyone who might've missed previous episodes where we've discussed the markets, can you give us a little bit of a rundown of your background as well as your role at Certified Angus Beef?

Paul Dykstra (02:14):
Sure, glad to. I guess going all the way back, I'm a native of Colorado, both the Western Slope and the extreme eastern edge. As far as the early years go, my family background is in commercial cow-calf operation. Had the chance in my youth to work for some larger farmers and a feed yard there locally on the Eastern Plains. Kind of a varied youth. I do have a Bachelor's degree in animal science and a minor in ag business from Colorado State University. Just prior to coming to the Certified Angus Beef brand, I was at the Meat Animal Research Center in Clay Center, Neb. many years ago as a feedlot manager. And I've had the great fortune of working for Certified Angus Beef for I believe 23 years now.

And all of that has been in the Supply Development division, which is one of the smaller divisions of the company. Of course, very suited to my interests and background and life's ambition which is on the cattle side, the supply side of our business. So I am currently the Director of Supply Management and Analysis, which is a bit of a tongue twister. That really just means that I delve into supply issues from the packer backward in the supply chain. So all sectors of the production chain from seedstock on through and really just trying to do whatever we can day to day to continue to increase the supply of carcasses that meet the standards for the brand. And really doing that myself in my role through market information and analysis as the title suggests, and interacting with folks up and down that supply chain from the standpoint of one-on-one consultation to speaking engagements and various other industry interactions as well as writing my biweekly newsletter, the CAB Insider. It goes out to a pretty good sized group of folks via email and also through some other pathways on the internet.

Lynsey McAnally (04:18):
It doesn't seem like the value of quality cattle is trending downward any time soon. But for producers who have invested in those quality genetics, how do you think the market will treat them moving forward in the near future?

Paul Dykstra (04:31):
Well, the market's going to treat everyone really well here in the near future, Lynsey, but that's really not saying anything. The demand signals are, I think that's what you're getting at ... Our customers from the packer forward - including distributors, retail users both in the grocery store segment and restaurant segment, and obviously the consumer - they're all pretty well zeroed in on quality when it comes to beef these days. Now granted we could stratify that a bit and talk about your fast food ground beef market. But really, in terms of the broader use of the entire beef carcass, the quality aspect of the offering is what folks have continued to demand. And we've seen that through a continually wide price spreads between Select, Choice, Premium Choice - which of course is our traditional Certified Angus Beef brand and on up into USDA Prime and Certified Angus Beef brand Prime.

As we stratify those quality grades and brand recognition there, those price spreads have continued to stay wide. They've even widened up from a historic perspective in the last number of months. And that's happened in the face of record large quantities or proportions I should say, of those higher quality beef items. So as we've grown the share of Prime for instance, that's the easiest example. Upwards of 10%, often times 12% this last year, of the total fed cattle supply premiums have stayed rather good. Now not record large for Prime over Choice, but rather good considering that we've more than doubled the supply of Prime carcasses in the last 10 years. That's a pretty strong signal. And so to answer the question more directly, the demand signals are there and I think from a cow-calf perspective and a feedyard perspective zeroing in on cattle that have some carcass quality is not a mistake. The buyers downstream are definitely demanding and paying up for the cattle that will meet those requirements.

Lynsey McAnally (06:41):
So we just talked about quality and the role that genetics can potentially play in that? CAB offers the Targeting the Brand logo. Do you mind talking about that Targeting the Brand logo as far as putting that beside pedigrees or lot information in a salebook?

Paul Dykstra (06:58):
Yeah, the Targeting the Brand logo is something that has been developed for many years now. I won't quote the number for fear of being wrong, but Angus breeders have accepted, I think largely, not everyone, but certainly a lot of breeders, have taken the opportunity to use that Targeting the Brand logo, particularly next to their yearling and 2-year-old bulls in their sale offering to just call out readily for their customers which bulls meet the specs for Targeting the Brand. And that would be a +0.65 Marbling EPD and a +$55 Grid Index value. And what that was intended to do originally, and still today, was to call out bulls that would essentially sire - if mated to an average cow herd to produce terminal calves - that would be about 50% Certified Angus Beef in terms of carcass results. And so just a way for bull buyers to quickly pick out the bulls that have a better than average shot at making quite a few CAB carcasses. And we've been very pleased to see the number of breeders that have used it as just one of the many tools that their customers can look for in terms of the genetic information.

Lynsey McAnally (08:25):
When we put this list of things to talk about when it comes to the market together, I feel like we would've been remiss if we not mentioned Targeting the Brand.

Paul Dykstra (08:32):
Yeah, that's the beauty of the cattle business today. The independence of the American cattlemen is still very much alive and well, and that means that folks have different priorities depending on their goals, their production model, their marketing, et cetera. And as many folks have said in the past, in a bull sale offering there's a bull for everybody and there's also a plethora of approaches folks might take. And, obviously, that terminal side is not the entire picture for lots of bull buyers because you've got the maternal side oftentimes to consider a great deal depending on what the breeding program looks like and the breeding pasture set up and those kinds of things. But terminal traits are still quite important because we do have to eat most of these animals in the end. And so yeah, it it's been a neat tool to add some marketability and assist the buyer in figuring out what they want to try to purchase that day.

Lynsey McAnally (09:41):
We were speaking a little bit earlier before we started recording and I mentioned that we will make sure that we include a link to some information about Targeting the Brand as well as information about CAB brand specs that people can go out and review. I don't think that we need to go through and mention every single spec here, but if there are some that you would like to mention that you think are particularly important, that would be great. Then we can jump over into those specs, what is tripping cattle up or what is tripping producers up in getting cattle into CAB?

Paul Dykstra (10:20):
Well, let me start by saying, Lynsey, that I hope we have lots of Angus genetic users listening in. But I also hope that maybe there are some not as familiar that are just learning about the Certified Angus Beef brand or the Angus breed in general. The most important thing that I can tell cattlemen who are less familiar with the brand is the fact that we do have carcass specs and of course also a live animal standard, which is the easy hurdle to cross: a predominantly black hide. So each animal that enters one of our licensed Certified Angus beef packing facilities across the country as well as in Canada, has to be predominantly black. Which simply means from the shoulders back and the flanks up, that animal needs to be black with no other colors present. Now the switch of the tail is excluded in that, but the main body portion must be black.

So about 70% of all fed cattle harvested today meet that. That's pretty easy. We've got lots of black cattle. They have lots of Angus influence, but the fact that we have 10 carcass specs that all must be met on each carcass is sometimes new to some folks that aren't as familiar. And as you said, we won't get through all 10 of them here from a time efficiency perspective, but I think the four that cattlemen readily impact with their genetic decisions and management choices are in order modest or higher marbling requirement. So premium choice and prime as we compare into that USDA quality grade measurement, that's No. 1 in priority in terms of what kicks most carcasses out that are unsuccessful, but also the 10 to 17 sq. in. acceptable window for ribeye size? Important as well. 1,100 pound maximum hot carcass weight which in today's management system and the dynamics of our industry is ever important with cattle weights and mature sizes ever escalating.

And then finally, of those, I think that top four lists the one in. maximum of external back fat thickness between the 12th and the 13th rib on that carcass as it's measured in the packing plant. So those are my top four. All 10 must be met Consequently, all 10 are very important. It's simply a matter that the rest, the other six, are issues that are less common as a problem when it comes to these eligible animals being excluded from the brand or not being successful. And also those are traits such as dark cutters, capillary rupture in the ribeye, these things we don't have as much control at the ranch or in the feedyard over when those happen infrequently.

Lynsey McAnally (13:33):
Along with those specs that cattle are expected to meet to become part of CAB, why do cattle that don't qualify, not qualify? For lack of a better way to put that.

Paul Dykstra (13:45):
It's an important topic that we review within the confines of a Certified Angus Beef on an annual basis to make sure that we understand and we can share with cattlemen and breeders of Angus cattle just exactly what are the primary areas of concern when it comes to carcasses being excluded from the brand. And so we do measure that on an annual basis. A few million carcasses, so not a small sample size thanks to camera technology and the ability to store a lot of data digitally. And of course through computer innovation, we can get out a few million carcasses on an annual basis to see specific to these brand eligible or black-hided cattle that are eligible to make CAB. We looked at every year the defect rate under each of those 10 carcass specs. In 2024, 82% of the unsuccessful carcasses did not meet our marbling requirement of modest and higher marbling or Premium Choice and Prime being the eligible area. So right away that gets the attention of everyone and that's why marbling is something that we talk a great deal about.

Lynsey McAnally (15:07):
That's a really interesting statistic.

Paul Dykstra (15:09):
And it's actually declined as a reason as cattle have graded better and better over the years. Since 2006, we've seen a hand-over-fist improvement in quality grade across the board in the United States. So we actually have needed to look at some of these other brand standards a little bit more closely. As marbling has improved, we see more, again, based on today's management practices - we've seen more heavyweight carcasses and ribeyes that are too big. Back fat comes in third of those three as an issue. So in 2024, once again, a little over 8% of the brand eligible carcasses were too heavy above that 1,100 lb. max. Ribeye size was an offender a little over 20% of the time. So big cattle? Heavy carcasses and big ribeyes come along with that. And so ribeye size came into focus in 2024. Now, we did change. We made the change in March of this year to increase our ribeye size from 16 up to 17 sq. in., and that was simply a move to keep us relevant with the industry as these mature sizes and carcass weights have increased a great deal.

We don't feel that that is a trend that will be turning around any time soon. History says that would be a bad bet to think that that's going to happen. So we did make the very well thought out and research decision to include that extra inch up to 17. So we're seeing some improvement in our acceptance rate with those extra carcasses coming in. It's not dramatic. It's maybe 5 to 7% additional supply with that extra inch. And then finally: back fat over 1 in. That's a very fat animal by the way. We are not promoters of 1 in. back fat thickness of any kind of carcasses, but they do happen, especially in this production environment where extra pounds are paying quite well. About 8% of carcasses have surpassed that. That was a year ago. So we do see some extra fat on these cattle. Anybody that's familiar with the cattle feeding and the results in this day and age, you surely would know yield grade 4s are becoming more of an issue. They're more prevalent and even those doggone yield grade 5s are showing up. It's a feature of a very supply restricted industry that we're looking at today and extra days on feed have paid dividends and we just need more pounds through those packing plants in this situation currently.

So that's been an increasing issue as well.

Lynsey McAnally (18:02):
One thing that I did want to bring up was you recently gave a presentation at Feeding Quality Forum in Rochester, Minn. Your session at FQF focused on partners working together and the need for information feedback. Can you expand upon that a little bit?

Paul Dykstra (18:21):
More than happy to! It's really a feature of the beef industry. We celebrate the independence of cattlemen and protect that and hold it near and dear. But along with that comes a bit of lack of information flow once in a while. And as we talk about cattle exchanging custody, maybe that's a seedstock producer selling a bull to a commercial customer. Those folks maybe don't interact a whole lot, but usually they do pretty well if they've got a relationship. But more so as we exchange feeder cattle custody from the ranch to the feedyard or maybe they even go through a stocker ownership in between and then move on to the packer. Oftentimes the fact that ownership changes, the information flow also stops because that tried and true old story is if I tell my supplier how good his product is and how much profit I made off of that product for myself, then that supplier might use that information against me in the future as we try to conduct business again, or I try to buy some more cattle.

And that enters the business for sure. It's not a feature of every transaction, but by and large its accepted as the majority rule. But as we look at making improvements in the supply of cattle and trying to increase the size of the pie for everyone involved, it's better if we get feedback on how the cattle perform, not only the quality grade, the Certified Angus Beef acceptance if you will, but health performance. Things like shrink, gain and those kinds of things are all valuable to send back up upstream for suppliers to know how to make improvements to make cattle better. And at the Feeding Quality Forum, we talked to the feeding sector and the packing sector there in our round table discussion - panel discussion - and just heard about some of the features of that relationship that can really be impactful and how those had been useful to Dallas Knobloch from Minnesota as well as his packer Upper Iowa Beef and the information exchange there. They have had some successes.

Lynsey McAnally (20:45):
I obviously didn't have the pleasure of being there to hear that presentation, but I did hear rave reviews on that round table and I was just curious if ... Inquiring minds (including myself) would love the full rundown. Is there anything else on that roundtable that you'd like to talk about, Paul?

Paul Dykstra (21:03):
Well, I was personally intrigued with ... and believe me in 23 years of being employed at Certified Angus Beef focused on supply, I've had the benefit of being a part of some of these discussions before. Of course, carcass data feedback is a key element that we have worked on and tried to assist with since I've been on board here with the brand. So that's not a new concept, but what I was particularly intrigued with was Dallas, our feed yard representative there, is just a great voice for his sector. I thought it was neat to hear him tell about how he interacts with his feeder-calf suppliers. Granted, there's a priority list that he has with regard to cattle performance in his feedyard, and it doesn't start with carcass traits, believe me. And this would be repeated by many a cattle feeder. I don't think I'm telling any secrets that health of those cattle in the feedyard is obviously a priority. A very key component. And he talked about actually delivering vaccines that he had agreed upon with his ranch suppliers. Actually going to the ranches and delivering those vaccines that he had purchased on their behalf. That's pretty good cooperation.

Lynsey McAnally (22:19):
Absolutely.

Paul Dykstra (22:20):
Now, granted, carcass traits are on the list, otherwise we wouldn't have invited him to the Feeding Quality Forum. But it's probably third, fourth or fifth on his list in terms of the bottom line profitability of a set of calves. But all of this information exchange he had been sharing with those ranch suppliers. What was also, I think, very honest on his part was that Dallas as a cattle feeder buying these calves from these ranchers, he made it clear that not every time do these relationships work. Sometimes when you share the information, indeed a rancher, a supplier, a seller will use it against you in the future years. And he said in his case, that's okay. We just won't buy those cattle if that's how that's going to turn out. No harm. But there are lots of cattle out in the world to be purchased. So isn't it interesting from that perspective?

Lynsey McAnally (23:17):
Together, the folks that are producing these cattle, the folks that are feeding cattle and the folks that are processing cattle, if all of us can have these conversations, it's a lot easier to tackle these issues than if we have each industry segment trying to work alone.

Paul Dykstra (23:34):
And we have lots of traits that are being improved upon simultaneously, particularly in the Angus breed. I'm so proud of that. We've got to Do It All cattle. But there's still enough, there's plenty of diversity and variety there for folks to utilize and pick up or make those different selections with as well. What's fun about it is the fact that cattle are different, producers are different, goals are different. That allows us to continue to have quality price spreads and performance price spreads and health price spreads. So those that are achieving the higher standards in any category are still being rewarded up and above the average. And that's the key element of trying to do a superior job in any of these categories.

Lynsey McAnally (24:27):
One of the statements that came out of Feeding Quality Forum, and it may have even been from your presentation, was that the choices that we've all made bring the consumer back to the meat case.

Paul Dykstra (24:39):
It's all about beef demand, and I don't think anyone would stand much of a chance in an argument about what we've been able to do as an industry. If we set our breed hats aside, which I'm rarely willing to do, we look at the total gross results of our collective efforts. Beef demand is what it is today because of improvements in these carcass traits and the quality of product we're offering. It's just really gratifying to see where we are today as an industry given how challenging it's been in so many past years to remain profitable.

Lynsey McAnally (25:20):
I did want to talk about where we're at with demand and then get into the periods of high premiums, months that maybe are a little bit less and what that looks like throughout the whole system.

Paul Dykstra (25:33):
Sure, yes, there is a lot of seasonality to these price spreads as we talk about carcass cutout values or beef cut pricing. As we look at the calendar year, seasonality plays a big role in just how far apart the pricing can be as we move from USDA Prime, Certified Angus Beef Prime - which those are typically priced from a wholesale cutout, relatively similar as well. We go down to a traditional Certified Angus Beef, which is the Premium Choice aspect of our brand and the vast majority of our product down to USDA Choice. And of course, Select. No surprise that there are two peak demand periods for the year, and that would be the onset of spring grilling. If anyone pays any attention to these end product beef markets, that one's pretty evident. And we've got all those holidays out there with Mother's Day, Memorial Day, Father's Day, and that of course then even leads us into the 4th of July a bit later.

But big time in demand even starts with Easter as a matter of fact. So we've got folks wanting to grill. They typically want to grill a high quality middle meat steak as one of their primary choices for those holidays. So that's a big demand period, and that tends to typically align with a period where cattle quality grade trend is going down. So the share of those premium quality carcasses is declining in that period as the youngest steers and heifers are coming into the packing plants. They've got the least amount of days, not very much age on them, and they're grading a bit lower than those yearlings that tend to top out the quality grade trend back in March of the year. So we align great demand with lower supply of premium carcasses in the spring. Moving out into summer, we tend to see quality grades improve as well.

Demand for your premium middle meats tends to decline as we get more into that hot dog and hamburger season, which is kind of a classic oversimplification of the summertime beef market. But demand for middle meats declines in that timeframe and quality grade comes up so the price spreads narrow because middle meats are what drive our best premiums for high quality and high marbling product. So summertime that tends to decrease and then back out into the fall again, we then revisit our fourth quarter spike in demand for high quality middle meats. No surprise with those December holidays in particular, but customers at the retail level, they're already stocking away product for those middle meats for December starting in August. So that tends to drive just like it is right now. Today, our ribeye and tenderloin prices are on a very strong uptick because of very narrow or small supplies because of our reduced harvest throughput on a weekly basis as well.

Quality grades tend to be lower this time of the year, and therefore we get that nice combination of demand on the uptick, supplies of premium product or carcasses on the downtrend, and that makes those spreads then widen up again. So to summarize what that looked like for the immediate recent 12 month period, that high or the widest price spreads came in the fourth quarter last year in November into December. Prime was $289 per cwt., whereas Choice was $90.80 premium to the market. So very nice premium. And that's on a per head effect. On a per hundred weight basis, that Prime premium was upwards of $30 per hundred on a carcass basis. Pretty strong there. Similarly, Angus beef per head, about $135 premium at the widest price spread timeline there in the fourth quarter.

Now at the narrowest time of the year out in May, Prime carcasses were still $150 over the market. Average Certified Angus Beef, an $80 premium. And even USDA Choice, which 70% of carcasses meet, were $34 over the market average or the cash market that week. So it matters a lot when we're producing premium cattle when are we going to market those cattle. And we can't predict perfectly, but if we're buying calves to hit a certain market, cattle feeders typically do study and do realize when these spreads widen out. And of course they would do well to plan or at least make decisions on what they pay for feeder cattle based on the projected timeline that they'll be harvested and what these price spreads are going to be for quality carcasses in that timeline. So it's really been heartening to see, as I've said before, as the percentage of high quality carcasses continues to grow relative to Select and even to lower Choice. Certified Angus Beef and Prime carcasses are continuing to command very nice premiums as supplies grow. So there's no doubt that the message back to the production chain is let's continue to stay on this course and produce more of those kind of cattle. Let's continue to keep marbling under some selection pressure amongst the myriad of traits that we're trying to improve.

Lynsey McAnally (31:28):
Well, Paul, we've kind of covered the gamut. But is there anything that we've forgotten in our conversation?

Paul Dykstra (31:34):
Yeah, I think to round out our conversation about what we discussed or I discussed at the Feeding Quality Forum, I would draw attention to the fact that since we are seeing genetics and management matchup more and more to improve our national percent of Prime carcasses in the fed cattle mix, I discussed a little bit about what might we use for EPD and index targets if a cattlemen or woman wanted to pursue maybe 20% prime carcasses, maybe 30%. We often see folks at the upper end even above 50% Prime with very targeted genetics. Now, that's not for everybody, but we sure can talk about those goals and I think just looking at 20% or even 30%, that would be very reasonable since the national average is more like 10% to 12%. So after some discussion and some good hard work by the folks at Angus Genetics Incorporated, it was shared to me by that team that if we want 20% Prime outcomes, we might look at a Marbling EPD for a sire at +1.1. We might, if we wanted 30%, we might look at a +1.55.

Lynsey McAnally (32:59):
We always like to end Angus at Work on a positive note. So what is one thing happening in your life personally or professionally that you are thankful for?

Paul Dykstra (33:09):
Well, I'm going to combine it to both personal and professional because I have a hard time separating the two in my little world. I am really just quite thankful that when I think about all of the folks in our industry, and that includes my wife and I on a very small scale in terms of our cattle operation, but as I review the folks that are out there making a living off the land and in feedyards and whatnot, and all of the years that have just been so tough and anybody can have tough circumstances, whether it be the weather or markets or personal tragedy, whatever it be. But I've seen so many folks with smiles ear to ear based on this market. It makes me feel so encouraged for our industry and the folks that have stuck it out and slugged it out, many thinking about whether they should turn back at certain times. It's just hard to be very down in the mouth when we think about where we're at today and that folks are really reaping the rewards of all these years of effort. And so we hope to make a little bit of something on some bred heifers this fall, Lynsey, and we'll see how that pans out. Typically, for me, it is still a coin toss either way.

Lynsey McAnally (34:22):
Paul, thank you so much for all of this and for telling us a little bit more about what's been discussed at Feeding Quality Forum and getting into the weeds of some of the rest of this with me today during this discussion. I know our listeners always appreciate market updates.

Paul Dykstra (34:39):
It's been a pleasure. Welcome to do it any time.

Lynsey McAnally (34:41):
Yes, sir. Thank you so much!

Closing (34:42):
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 Podcasts and share this episode with any other profit-minded cattlemen. Thanks for listening. This has been Angus at Work!