Influence of individual beef cuts on net carcass value

Abstract

The purpose of this study was to derive an improved method of calculating the value of export beef carcasses so that market demands are accurately reflected back to the producer.

The existing method of schedule calculation used by the Industry assumes a fixed proportion of cuts over the entire carcass weight range, and "average" yield of saleable meat and "average" carcass weight, over 25 kg carcass weight ranges. In the N.Z. export beef market, there are not only price differentials between cuts but also substantial price differentials between weight-ranges of the same cut and the product form of the same cut, which may significantly influence carcass value.

A Least Squares Analysis of two sets of carcass data established the relationship between the weight of individual cuts and carcass weight, carcass fatness, sex, conformation, and breed. Two interactive computer programs were devised to predict the weight and value of the component cuts of a carcass, given carcass variables selected by the program user. The value of any beef animal to the producer, represented by the exporters’ schedule, is calculated from the weight and market value of individual beef cuts and hide, after deducting all processing and handling charges appropriate to each carcass. The first program calculates an export schedule for steer carcasses while the second program calculates an export schedule for manufacturing beef carcasses.

This study shows the assumed fixed proportion of cuts to be over simplistic. The predicted schedule shows a significant effect of both carcass fatness and breed on the critical weight required to obtain striploins, tenderloins and cuberolls in a specific weight range. It also highlights a significantly higher schedule for carcasses where some cuts have been exported chilled, rather than frozen.

Conformation contributed little to the prediction of the weight of individual cuts and hence total weight of saleable meat. At a constant carcass weight within the P grade, yield of saleable meat declined by 0.1% to 0.3% for every 1 mm increase in fat thickness at the 12th rib.

At constant carcass weight and fatness, there were differences between breeds in the predicted schedule price. The range was approximately 8 cents/kg. The sire breeds (ranked from highest predicted schedule to lowest) were: Limousin, Blonde D'Aquitaine, Charolais, Angus; South Devon, Hereford, Red Devon, Friesian. The three Continental beef breeds had the highest predicted schedules because of higher yields of saleable meat and a higher proportion of higher-priced cuts.

Finally, this study shows the recent adoption of a flat rate processing charge by North Island export works to increase the schedule of heavy cattle relative to lighter cattle.