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Prices for Certified Angus Beef Premiums See New High
USAgNet - 03/16/2016

Rewards for hitting the Certified Angus Beef brand target have never been greater, even after 11 consecutive years of growing supply. A survey of CAB-licensed packers Cargill, JBS-USA, National and Tyson showed they paid a record $51.8 million in grid premiums in 2015, and more than $550 million over 20 years. That does not count the smaller amounts for cattle grading USDA Choice, or the Prime premiums for the hundreds of thousands of cattle that supply the increasing demand for CAB Prime.

The annual 3.6 million cattle accepted for the brand now account for 16% of all North American fed beef, but USDA reported the highest packer premium ever just last November at $10/cwt., and the highest average premium for CAB just last month. It's all driven by product demand, as the premiums match CAB's advantage over the Choice cutout value, says CAB President John Stika.

"For a company with the mission of adding value to Angus cattle through our branded beef program, it's satisfying to see the market working to reward producers, even as they supply us with more product to keep setting sales records," Stika says.

CAB premiums were barely measurable for the first 19 years, though first noted in the 1980s, but the second half of the brand's 38-year run shows increasing momentum.

More than half of all grid premiums ever received for CAB acceptance have been paid in the last seven years. More than 41% of cumulative CAB premiums have come in the past five years.

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