W3177: Enhancing the Competitiveness and Value of U.S. Beef

(Multistate Research Project)

Status: Active

W3177: Enhancing the Competitiveness and Value of U.S. Beef

Duration: 10/01/2012 to 09/30/2017

Administrative Advisor(s):

NIFA Reps:

Statement of Issues and Justification

The U.S. beef industry is facing a number of complex challenges that can be addressed through a multi-disciplinary, integrated approach involving participants from animal science, meat science, and economics. Increasing exports, decreased cattle numbers and beef supply, variable (and currently favorable) foreign exchange rates, larger carcasses yet a need for portion control, and growing interest by the public in how beef is produced present both challenges and opportunities. Innovative animal and meat science research can identify the types and qualities of beef that a diverse and international consuming public desire. Economic research can determine the relative strength of consumer preferences across types and qualities of beef products and estimate the market value consumers place on identified product attributes. Integrating research efforts will allow the research team to identify product quality attributes consumers demand and estimate what the market is willing to pay for these attributes in a manner that better captures the growing complexities faced by the U.S. beef industry.

It has long been established in the economics literature that both product price and product quality matter to the consumer. Production and process innovations lower production costs and/or improve product quality, which in turn will enhance beef's competitive position relative to pork and poultry. To better understand the relationship in the beef industry between price and product quality, animal/meat scientists and economists need to work together to explore issues affecting beef demand. Analysis of the interaction between consumer preferences for beef based on product attributes, such as: a) consumption quality of beef products, b) quality-enhancing innovations, and c) food safety, with d) market price is key to improving beef's competitive position in the battle to capture more of the consumer's dollar. This type of research is needed if the beef industry is to recapture lost domestic market share from pork and poultry, and extend U.S. beef's international market share.

The past decline in beef demand is a complex issue and focus of ongoing research. Beef customers expect producers to provide a high quality and safe product. Past efforts at improving beef quality generally were built around the concept that there was a single measure of quality. However, quality is multi-dimensional and is viewed differently across consumers, as research done by this research project and other scientists has shown. Consumer preferences change over time due to increasing incomes, changes in taste, and product innovations in beef and competing foods. Additional research is needed on this issue to improve the competitive position of U.S. beef.

Product quality and safety are a function of the U.S. beef production and marketing systems. Therefore, consumer demand is also a function of these systems. Failure of these systems in the past to satisfy consumer preference has resulted in the beef industry losing market share to poultry and pork. Product quality is an issue because much of U.S. beef has been marketed and processed as a generic product, but existing research has shown that variation in generic quality reduces the competitiveness of beef. Beef cattle are genetically diverse, produced under a variety of environmental conditions, which leads to differences in meat quality. The industry might improve customer satisfaction and industry competitiveness by targeting the natural variation of beef to niche markets that are willing to pay a premium for specific naturally occurring product attributes.

With respect to product safety, consumer concern over product safety is the direct result of the beef industry's failure to convince beef patrons that proper safety protocols are in place when product safety issues arise. An excellent example of industry failure was the shock to the U.S. beef market when BSE was discovered in both Canada and the United States in 2003. The Canadian discovery disrupted an important source of imported live animals and beef while the U.S. discovery shut down U.S. beef exports. The beef industry is still adjusting to these challenges and ramping up efforts to identify and trace foodborne pathogens. Traceability, originally conceived to enhance animal and human health, may provide an effective trace-back system to improve the industry's ability to target specific animals to their highest-valued uses and alleviate consumer food security/safety concerns.

The multi-disciplinary research team has decided to focus on beef value at all levels from production through the supply chain to consumer demand. Animal care and health, production and processing, information transfer and marketing, and factors influencing domestic and international demand all affect beef value and thus its competitiveness.

Related, Current and Previous Work

There is a deep working literature on many issues directly germane to those of focus in this project as outlined in the three main objectives below. This literature contains many contributions for project participants across multiple disciplines. While an extensive review of this literature is beyond the scope of this multi-state research project renewal process, it is worth noting the following highlights:

Consumer Preference
Beef consumer needs and demands are more complex than ever. Past work by members of this regional committee provides valuable input into the consumer literature on country-of-origin labeling; meat traceability; organic, grass-fed, and natural beef; intrinsic attributes (e.g., meat color and presentation); tenderness; and food safety (e.g., Dickinson and Bailey 2002, Loureiro and Umberger 2003, Lourieiro and Umberger 2004, Umberger et al. 2002, and Umberger et al. 2003). While this work advances our knowledge of consumer preferences for beef in the United States and abroad, it also points to new areas for research and issues challenging our understanding of consumer behavior. Some of this more recent work includes assessing how much consumers care about animal care when making meat purchasing decisions (Tonsor and Olynk, 2010) and examining the impacts of various media articles about human health consequences of consumption (Tonsor, Mintert, and Schroeder, 2010).
The linkage between consumer beef preferences and management of ranch operations must be examined within a production framework. For example, relationships between animal temperament, stress, eating behavior, health status, energy efficiency, and growth in combination with environment, genetics, and nutrition and their subsequent impacts o beef quality needs to be further elucidated, especially in nontraditional production systems. Initial research in this area (Brown et al., 2004; Carstens et al., 2005; Falkenberg et al., 2005; Gomez et al., 2007) has been conducted by this regional committee. However, as the beef industry utilizes new production, genetic and nutritional tools to develop targeted beef merchandizing systems, the impact on beef quality and consumer preferences must be a consideration. This link has been explored in several recent studies (Lorenzen et al., 2010; Young et al., 2010; Varnold et al., 2010).

Palatability and Processing
One of the advantages of U.S. beef products in the export market is superior quality, flavor, and tenderness. USDA quality grades are used to classify beef carcasses into expected palatability groups. The ability to more accurately assess beef tenderness and integrate this information with the current USDA grading system would allow the beef industry to categorize beef based on expected palatability. The USDA-Ag. Marketing Service has identified instrument grading as a priority for the industry (Steiner et al., 2003 a, b; Vote et al., 2003; Moore et al., 2010). Economic research has shown that consumers are willing to pay for increased palatability. Research has examined the impact of varied diets on product quality and palatability (Senaratne et al., 2010; Nelson, 2010).

A variety of technologies exist that might be applied to beef carcass grading. A hyperspectral imaging system gives good spectral and spatial resolution, simultaneously. The hyperspectral imaging system collects a spectrum at each and every pixel (location) of an image. Preliminary results suggest hyperspectral imaging can used to successfully predict tenderness (Grimes et al., 2006).

Traditional enhancement has been accomplished with the injection of water, salt, and phosphates. The use of such ingredients results in the improvement of water-holding capacity (Offer and Trinick, 1983). Studies (Trout and Schmidt, 1984; Vote et al., 2000; Lawrence et al., 2004; Baublits et al., 2006a,b; Knock et al., 2006) have shown that enhancement with salt and phosphates do in fact increase tenderness and juiciness.

To remain competitive globally, the U.S. meat industry must continue to improve processing efficiency. Internationally, carcass fabrication procedures are diverse (Pfeiffer et al., 2005), reflecting the uses for meat cuts in a particular country as well as for export. Many countries are unencumbered by the traditions of U.S. fabrication and thus have been free to explore alternative cutting strategies. Previous research from this project has evaluated individual muscle cuts and has developed new cuts (Von Seggern et al., 2005). Economic evaluation of consumer preferences for new cuts will provide insight on potential new domestic and international market niches.

Supply Chain Management
The production and marketing of cattle and calves has been affected by increased industrial concentration in the packing and feedlot industries over the last 40 years. The structural changes are a response to increased competition from other protein sources (e.g., poultry and pork) for a greater share of the consumer dollar. The shift in the industrial structure has both benefited and damaged participants along the beef supply chain. Increased concentration has resulted in impressive gains in production efficiency, but it has also resulted in dramatic decline of the number of firms involved in both the feeding and processing segments of the beef industry (Sabasi, 2011).
This transition to a more competitive industry has put small producers at a competitive disadvantage in the market place. Large meat packing firms dominate the slaughter and processing segment of the beef industry and account for 82% of steer and heifer slaughter. The number of meat packing plants processing more than 2000 head annually declined from 808 in 1978 to 173 in 2004 (GISPA 2006). The feedlot sector is becoming more concentrated as well. The largest 260 feedlots in the U.S. market over 60% of the fed cattle (USDA/NASS 2006). The cow/calf industry is the only segment of the beef industry that has not succumbed to the forces of increased market concentration and vertical integration. In 2005, there were approximately 770,000 beef cow operations in the United States and 85% of the beef cow inventory in the United States was located on operations of less than 500 head (USDA/NASS 2006).

The poultry industry and increasingly the pork industry are integrated or at least more vertically aligned than the beef industry. The ability of the supply chain to transmit consumer preferences for a particular type and quality of beef product back to through the supply chain to the producer is paramount to the success of the beef industry to compete successfully against other protein sources. Recent innovations in the marketing of live cattle and the implementation of mandatory price reporting for slaughter cattle and wholesale beef has impacted the ability to transmit market signals through the beef supply chain (Koontz and Ward, 2011). The 2007 GIPSA report on alternative marketing agreements provides new insight on vertical linkages between producers, packers and downstream participants. Furthermore, the Competition Title of the 2007 Farm Bill is expected to impact market transparency and marketing practices. As more information becomes available and measurement and traceability technologies improve analysis is needed to identify implications on price discovery and price transmission throughout the beef supply chain (Schulz and Tonsor, 2010; Pendell et al., 2010).

Review of ongoing CRIS projects
A search of the CRIS database by Field of Science and by Subject of Investigation categories did not find any ongoing project proposing to integrate research on beef quality issues with research on consumer preference for particular quality attributes associated with beef products. The integration of research on improving beef product quality along the beef market supply chain with research on consumer preferences for particular beef product attributes will allow our research group to advance the knowledge on the linkages between product quality, market price, and consumer demand along the beef supply chain.


  1. Measure and improve beef quality, safety and value by assessing impacts of animal health, animal care, and processing management/production strategies.
  2. Improve supply chain management, information transfer and value determination by examining strategies of information collection and dissemination.
  3. Determine factors influencing domestic and international consumer demand for U.S. beef.


OBJECTIVE 1: Stations Involved: CA, MT, NE, CO, CT, KS, TX, WA. Among the complex challenges facing the beef industry is meeting the demands of todays consumers. While consistent high quality and safe products are demanded by all beef consumers, subsets of the population have increased concerns about production practices such as humane production or natural, organic and local. While the beef industry considers prime the highest quality, some consumers pursue lean products for health reasons. Still others demand further processed products be made with fewer added ingredients. Commodity production in the beef industry supplies the vast majority of consumers but other niche production/marketing opportunities are increasing. Research targeting this objective will focus on production and processing practices improving quality and safety that can increase overall industry value and competitiveness. In striving to maximize value in the beef industry, ensuring high quality, safe beef is essential. Many practices from conception to consumption can improve beef quality and consistency and most of these practices focus on determining, improving, or extending product quality. As scientific capabilities further develop, technologies such as genomic and proteomic analysis can help improve beef quality and consistency. Research will focus on developing, expanding, and implementing these technologies (NE, CT). Production practices influence product quality and practices have been altered due to the changing and increasingly volatile commodity markets. The global comparative advantage of U.S. grain-fed beef must be maintained and the effect of feeding regiments, both length and type of feeds (grain, by-products, and forages) should be evaluated. Finishing beef on ethanol co-products or forages can impact beef flavor and product shelf life but supplementation with vitamin E or other antioxidants can limit these changes. Research on diet variation and ultimate impact on grain-fed beef quality will be conducted (NE, CO, TX, WA). Much value can be added post-harvest by optimizing carcass utilization. New carcass fabrication techniques have and can continue to enhance beef carcass value by developing new strategies to utilize promising muscles that have been identified during beef muscle profiling. No better example exists than the success of the flat-iron steak. Other muscles can be upgraded by improving product palatability using new and current processing techniques. Research will continue to explore and improve carcass fabrication techniques and new product development (NE, CO, CT, TX, WA). Like product quality, both pre- and post-harvest factors can influence beef safety. Much work has been conducted to help control the outbreaks of E. coli O157:H7 in the beef supply. Newly developed vaccinations are capable of limiting E. coli shedding and future contamination during harvesting. Additionally, organic acids and other carcass washing systems have been effective. Recent United States Department of Agriculture Food Safety and Inspection Service regulations call for the testing of six, non-O157:H7 STEC E.coli. Research will be conducted to assess the effectiveness of current E. coli O157:H7 technologies against these and other pathogens in beef products (NE, KS). Production and processing techniques must continue to evolve to meet the changing demands of beef consumers. Improved healthfulness of products has played greater role in purchasing decisions in recent years and fresh and processed beef products should be developed to meet this demand. While some production practices measurably impact beef physically, others only alter perceived benefits to consumers. Some of these perceptions can be driven by misconceptions of current practices and understanding the gaps in practice/perception is important for beef producers to understand. An increasing portion of beef consumers are demanding alternative production techniques including housing, diet and additives, and uses of vaccines and antibiotics during beef production and limitations on added ingredients during processing. While beef produced in these alternative practices can garner a premium price, increased production costs and changes in product quality and safety can occur and need to be assessed. Research will continue to explore development, consumer acceptance, and overall viability of these alternative practices (NE, CA, CO, CT, TX, WA). OBJECTIVE 2: Stations Involved: CA, SD, MT, KS, CO Over the past decade, the U.S. beef industry is slowly, but continually, changing from a traditionally produced commodity based product to a product that is differentiated. As this change occurs, there are numerous challenges that have arisen and still exist today. Research targeting this objective will focus on analyzing supply chain management strategies that are impacted by the transmission of information between the producers and the final consumers to increase overall industry value and competitiveness. Research investigating producer incentives for participation in value-added propositions (e.g., appropriate use of local market needs) will be conducted by researchers at University of California-Davis. The value of animal identification and traceability for the different sectors in the beef industry that affiliate with different alliances will be examined (UC-Davis, South Dakota State University, Montana State University). Additionally, this analysis of animal identification and traceability will include livestock operations of different size (scale), types and types of certification. South Dakota State University and Economic Research Service will continue to analyze the impacts of voluntary and mandatory price reporting on price discovery. With the downturn in the economy, USDA NASS has recently begun eliminating production and marketing reports. The implications for lost information to the industry will be analyzed by researchers at Kansas State University. Additional research conducted by Kansas State University and Colorado State University will include the reasons for and implication of the gradual change of the structure of U.S. beef industry (e.g., geographic movement of herds, differences in breeds, etc.). Research on the beef industrys Value Based Marketing Initiative is ongoing at South Dakota State. The current focus is on market structure barriers to the transmission of market signals from the consumer to the producer along the market supply chain. Issues related to animal health have enormous implications for the U.S. beef industrys competitiveness both domestically and internationally. Evaluating animal health issues such as a 45 day weaning program (Montana State University) and the genomics selection strategies in improve genetic resistance to bovine respiratory disease (Colorado State University) will be completed. Another important transfer mechanism that will be addressed is the role and value of 3rd party verification (e.g., export verification programs, age and source verification, etc.) (Kansas State University, Montana State University, UC Davis, and Colorado State University). OBJECTIVE 3: Stations Involved: NE, TX, KS, WA, HI, UT, CO, SD Ultimately, the U.S. beef industry's viability hinges upon revenue obtained from beef sales. The issue of beef demand has received notable attention in the past, remains debated, and will certainly maintain significant importance in the future. Accordingly, research targeting this objective will focus on demand determinants, both of domestic and international consumers, for U.S. beef. Research examining consumer willingness to pay for enhanced palatability, new products, and impacts of cultural differences on preferences will be completed (NE, TX). Similarly, consumer preferences for grass-fed, organic, locally grown, hormone-free, and other "niche" production schemes will be researched (WA, HI, UT). The associated U.S. comparative advantage and viability implications of these alternative production schemes will be researched (WA, HI, UT, KS). The role of retail product labeling on issues such as country of origin and animal care will also be researched (KS).

Measurement of Progress and Results


  • Provide suggestions for aligning production of beef with consumer preferences.
  • New carcass utilization and processing technologies will be explored with suggestions regarding implementation provided.
  • Impediments to transmission of information between producers and consumers will be identified along with suggested resolution approach alternatives.
  • Implications of issues around animal health for individual producer and overall U.S. beef industry competitiveness will be identified.
  • Updated assessments of beef demand determinants will be provided.
  • Guidance regarding retail beef product labeling desires by consumers and industry implications will be provided. Direct interaction with industry and government groups in at least two of the five annual meetings. Publish at least 40 academic papers (peer-reviewed articles, fact sheets, Experiment Station reports, etc.) on issues directly stemming from this project. Make at least 10 invited presentations at meetings organized by industry or government groups.

Outcomes or Projected Impacts

  • Industry will be better informed about consumer decision making and will be better able to incorporate this information in to their production decisions.
  • Industry will be able to take advantage of price premiums to enhance their long term profitability.
  • Industry will be able to introduce more efficient production and processing practices to meet consumer needs.
  • Industry will be better informed of production practices suggested by Beef Quality Assurance.
  • Industry will be able to evaluate marketing systems and realize financial gains from implementing these systems.
  • Industry will increase adoption of new fabrication, processing, and related developments to industry. Increased competitiveness of U.S. beef industry.


(2015): Hold at least one joint organized symposium at an agricultural economics, animal science, and/or meat science professional annual meeting.

(2017): Have at least one project member provide a keynote or similarly high profile presentation related to this project's objectives at an international professional meeting.

(2017): Observe tangible evidence of reduced microbial contamination of beef reducing human illness, increased understanding of how implementing traceability and animal identification systems impacts different segments of the U.S. beef industry, and/or expanded adoption of new fabrication and processing practices by packers.

Projected Participation

View Appendix E: Participation

Outreach Plan

Project participants have a history of information sharing activities, cooperation, and productivity. Many of the project scientists have been involved in this effort previously, some for decades. Their expertise and productivity are well documented in previous accomplishment reports. New scientists have been added to enhance the scope and multidisciplinary nature of the project. Several of the scientists involved in this project have Extension appointments. This will enhance the dissemination of research results to the general public through presentations and popular publications. There are no artificial boundaries where the research component waits for the outreach function to interact with the information generated from project efforts. The technical committee will promote the flow of new information between the laboratory and industry to benefit the ultimate consumer. Most project scientists interact with outreach personnel at their respective institutions and at regional and national levels. A number of the Outcomes and Impacts lend themselves to outreach education activities. Various media can be used to educate producers, processor, policy makers, and consumers. It is intended that preparation of peer reviewed publications, presentations at professional meetings, and other means of disseminating project results to professional audiences be part of the ongoing project effort. This group also will work collaboratively with industry and government leaders to provide additional insight into solutions for many of the emerging challenges facing the livestock and meat industries. This will be accomplished by inviting these individuals to annual meetings and requesting their input into research directions for the future and their critique of ongoing research. When appropriate, published proceedings, or other published work will be released to the public.


All members of the technical committee are eligible for office, regardless of sponsoring agency affiliation. The chairperson, in consultation with the administrative advisor, notifies the technical committee members of the time and place of meetings and presides at meetings of the technical committee. The chairperson is responsible for preparing or supervising the preparation of the annual report of the regional project. The vice-chairperson is responsible for the organization of the annual meeting and preparation of the agenda. The secretary records the minutes and performs other duties assigned by the technical committee or the administrative advisor. Leadership of the technical committee consists of chairperson, vice chairperson, and secretary. Nominations are taken from the floor at the annual meeting for secretary. Secretary moves up to vice chairperson the next year and the vice-chairperson moves up to chairperson. The design of this project is to facilitate interaction between economists and animal/meat scientists to improve competitiveness and value of U.S. beef. The committee is organized to have a balance of committee members from the scientific disciplines of agricultural economics and animal/meat science. Attempts will be made to rotate leadership alternate years between animal/meat scientists and agricultural economists.

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