How was it in the day? How will it be in future?

In the mid-1960's, when about 42 percent of the total beef and dairy cattle slaughter was grass-fed, Bill Helming, veteran and respected agricultural economist and agribusiness consultant came to a startling and contrarian prediction.

Rather than continue ticking along to established industry rhythms and mores, Helming forecast that looming economic changes and evolving consumer demand would significantly reduce the tonnage of grass-fed beef in favor of more full-fed, grain-fed beef. At the time he shared his views in a paper aptly titled, The U.S. Hamburger Society-Part 1.

History obviously proves Helming a prescient prognosticator. If his most recent prediction is also correct, the industry is poised to come full-circle, with economics and consumer demand forcing a significant shift to more grass-fed and half-fed cattle, at the expense of the grain-fed market. . .

“Today, very close to 55 percent of the total beef tonnage sold to and consumed by the American consumer is ground beef in one form or another. It's easy to see the day coming within the next 10-15 years when 65-70 percent of the total U.S. beef tonnage produced and consumed in the U.S. will be ground beef.” . . .

However the future pans out, it's no secret that the traditionally lower-value, higher-volume part of the beef carcass—the Chuck and Round—have propped up carcass values as the nation's economy has struggled. Until the last 18 months, it was higher-priced, lower-volume middle meats—the Loin and Rib—that primarily determined carcass value.

Based on Cattle-Fax data, middle meat primal values declined 8-10 percent from March of 2008 to April of this year, while the value of the Chuck and Round increased 11-17 percent.

“The net result moving forward is the Hamburger Society—Part Two,” says Helming. “This will represent a major and fundamental change and opportunity for the U.S. beef cattle industry. It will also be positive overall for the U.S. beef cattle industry moving forward on a longer-term basis.”

A couple of decades ago when far flung graziers began talking with one another using ICT a common dollop of conventional wisdom was that the key to profitability was burger since it was so much of the carcass yield. It wasn't that you made a profit on the burger, it was that you had to get rid of it at break even prices so that you could profit on the steaks sold at high prices. Everyone wants a steak. That has never been my experience for one simple reason: grass fed burger is so very good. I have always had the opposite problem of not having enough burger to satisfy demand. Sometimes it was necessary to burger a whole carcass to supplement normal burger yield.

For the purposes of this article, grass-fed is synonymous to non-fed. Full-fed means the traditional system of the past four decades of feeding cattle a high-concentrate grain ration for at least 120 to 160 days. Half-fed implies cattle fed a low-concentrate grain, high-roughage diet for no more than 70-90 days, to a live slaughter weight of approximately 950-1,050 lbs.

The article ignores real grass finishing. It's currently a low single digit percentage of the market so that makes some sense, but we are talking about the future. A steer well finished on grass is much like a full-fed steer in weight and carcass characteristics. The difference is in the nutritional content of the beef, and its flavor and tenderness. Grass finished beef has a superior fatty acid profile as well as extra vitamins, its flavor is a matter of taste of course but many find it to be excellent, and it is necessarily a bit less tender since the animals are more active and muscular as opposed to fat and flaccid.

My view is that the grass finished market will continue to grow even though it will command a price premium, but I agree with Helming that burger will be in even greater demand. Success depends on good burger. Get it right or else.