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Quality pays

CAB premiums surpass $450 million in 2014

Cumulative grid premium rewards for hitting the Certified Angus Beef ® (CAB ®) brand target stood at $450 million at the end of 2013, and they keep growing at an annual rate of up to $50 million paid to producers.

In the last two years, 7 million cattle accepted for the brand allowed 16,000 licensees worldwide to sell more than 1.6 billion pounds..

In the last two years,
7 million cattle accepted
for the brand allowed
16,000 licensees worldwide
to sell more than
1.6 billion pounds...

That’s according to a January 2014 survey, and the 2012 premium total of $50 million was the highest ever reported. Over the last two years, more than 7 million cattle have been accepted for the brand, and 16,000 licensees worldwide have sold more than 1.6 billion pounds.

In the biennial survey, leading CAB-licensed packers shared figures on condition that no individual company numbers would be reported. Tyson, Cargill, JBS and National Beef checked actual CAB premiums paid in 2011 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. That’s a cumulative $200 million in commissions on 10 billion pounds.

Widespread grid premiums for CAB-accepted cattle appeared in the mid-1990s. By 1998, all the major packers featured CAB premiums in their grid or formula pricing.