Live Animal Procurement and Value Discovery (Cattle)

Question 1

What is essential in value discovery?

Answer 1

Data procurement

Question 2

What has happened to total negotiation over time?

Answer 2

It has gone down

Question 3

What is formula value?

Answer 3

AMAs (alternative marketing arrangements)
- Incentivize people (producers) to do what the market wants (i.e. increase marbling, quality grade, eating experience, etc.)

Question 4

Why has formula volume increased over the years?

Answer 4

• The market has started requesting higher-quality beef
• Consumer preference has changed
• Consumers want a more consistent product

Question 5

How are the majority of cattle sold in today’s industry?

Answer 5

Formula/AMAs

Question 6

What is a negotiated grid?

Answer 6

The product starts at a baseline and producers get premiums or mark offs (discounts) for the quality of the product

Question 7

Why did we see an increase in formula volume and a decrease in total negotiation?

Answer 7

Strong demand by consumers
- Consumers want the most expensive grades

Question 8

What value does branded beef add?

Answer 8

A more consistent eating experience

Question 9

What happens to protein consumption as GDP expands?

Answer 9

As world population increases and emerging markets become wealthier, protein demand increases exponenetially