top of page
  • Miranda Reiman, senior associate editor

Higher Grading, Beef Cutouts Led the Way in 2021

In 2020, cattlemen felt firsthand the ways the markets diverged from beginning-of-the year predictions. In 2021, they have felt more of the same.

Paul Dykstra, Certified Angus Beef assistant director of supply management and analysis, says it was a tale of two markets.

Grading trends and the beef cutout remained strong, while currentness and cattle prices took longer than expected to show corrections from pandemic induced disruptions.

“We couldn't achieve what the market demand was for cattle being processed, and we continued throughout the year to see cattle on feed for longer days than a normal year,” he says.

The average quality grade for 2021 showed 72% of carcasses reached Choice, 10% Prime, with a 36% Certified Angus Beef ® brand acceptance rate.

To get the full analysis, listen to Dykstra’s year-end review, or read full the transcript below.

MIRANDA REIMAN: As 2020 came and went, many cattlemen thought 2021 would tell a much different story in the markets. Certified Angus Beef tracks data on grading trends and pricing on both live cattle and on the wholesale level. I recently caught up with their assistant director of supply management and analysis to get year-end review.

Hi, this is Miranda Reiman, senior associate editor with the Angus Journal. And today I'm visiting with Paul Dykstra, Certified Angus beef. Thanks for joining us today, Paul.

PAUL DYKSTRA: You're welcome. Glad to be here, Miranda.

REIMAN: You know, as we've kind of talked, we looked at the markets in 2020 and knew that that, that was going to show up as sort of an anomaly forever. We're going to look back and say ‘the year of 2020,’ but as we started comparing 2021 back to such an unusual year, we expected that we would see some recovering from that shock. We would see some currentness return to the markets. How did that really play out in real life?

DYKSTRA: Well, 2020 marketing year certainly will stand alone in that the shock waves that were felt from the onset of the pandemic were tremendous and they were felt immediately, once things took hold particularly in our packing and feeding sectors of spring. So that is certainly going to be the year where all of the charts were certainly off of reality. But then in ’21, we certainly really did think that we could, we could shake, much of the lack of currentness in the fed cattle sector and get packing plants working more efficiently and by and large that's true, but the market was still hindered throughout the year by a slower pace of packer throughput. We couldn't achieve what the market demand was for cattle being processed. And we continued throughout the year to see cattle on feed for longer days than a normal year. The head count that were being fed 150 plus days remained elevated, although it did come, mid-to-late summer, but then late in the fourth quarter, it was back up again. So we couldn't quite shake the issues that were kind of plaguing the fed cattle trade even late into the year, not entirely.

REIMAN: Sure. So it improved, but just not as much as, as maybe we expected, as you think about those days on feed. And we know that has a strong correlation with carcass quality, what happened to carcass quality and Certified Angus Beef acceptance as a result?

DYKSTRA: Well, if we look across the calendar years, the last two specifically, and we just that the averages for the year carcass quality remained unchanged for the entire calendar year. Now we know there were peaks and troughs in terms of cattle harvest numbers, particularly in 2020 less, or I should say fewer undulations in ’21, but the net result for ’20 and ’21 was a very sideways move into the most recent period in terms of carcass quality. And that means we have been in the range of about 10% Prime carcasses, 72% Choice carcasses and for the Certified Angus Beef brand, we also averaged a little better than 36% of those eligible animals making it into our brand for both years as well, with a few decimal points difference between the two. So even though we have achieved all-time highs in the quality grade realm, particularly as we speak about modern history, at the same time it was a sideways year here in the latest 2021.

REIMAN: Would have you expected — you know, given that we said a lot of times that an unintended consequence of kind of the pandemic disruption was this really rich quality grade — would've we expected that to be a drop off perhaps into ’21, and we didn't see that?

DYKSTRA: Yes, I think so. We would have predicted that probably late in 2020 that the following year may see the trends decline a bit, because we just felt like that after we got through the first quarter of ’21 that the fed cattle supplies would be cleaned up and fewer market ready cattle would be on the show lists on a weekly basis from there forward compared to the year prior. But again, that was not necessarily the case. And of course we can speak about specific months and how those differences, but fact of the matter remains that we weren't very current throughout the year of ’21. And as a result, we kind of held up, held higher, these quality grade trends and Certified Angus Beef acceptance, even though we'd essentially been building into this trend for 15 years now. So, it shouldn't have been a surprise that we were that high, but these unintended consequences that you point out really pushed us a bit higher in terms of carcass weights days on feed, total body back fat thickness, and as a result, the marbling comes along for that ride as well. So, we just kind of held it there at those all-time highs for the higher grades and Certified Angus Beef.

REIMAN: Sure. As I think about grading, it’s kind of a fun thing to talk about how strong we are in that regards, but as we transition to talk a little bit about price, Paul, I really get the sense that cattleman are kind of finally starting to feel like there's maybe a little hope in the market and the pricing scenario, but the elephant in the room really for the last year, is that cutout versus the live price. Do you want to talk about those trends just a little bit?

DYKTRA: Sure. I think that's really important to gain perspective because those are two divergent price stories in the past year. Cutout values reached record highs in 2021. And when I say that I specifically mean on the annual average, because we did have higher spike in the spring of 2020, but for the annual average, we've put in a new record high for beef cutout values. And that really speaks to two things. First of all, consumer demand and that's the shining star. Consumers have been willing to purchase beef at prices that many of us never would've expected. So, we're excited about increasing beef demand. I think that remains in place today. Secondly, of course the supply side was, was kind of the negative piece of that same element, which is the fact that we, we have not been able to produce quite enough beef product to satisfy that demand. And of course that's what pushes prices higher.

So that cut out story is, is one of, of elevated prices. And on the, on the other side of the coin, then on the live side of the business or the fed cattle side, that was less impressive. Due to the fact that we did have this slower throughput in the packing sector. We had a pretty healthy supply throughout the year, not every week, but for the most part, a big supply of fed cattle that were market ready that gave packers their pick of the cattle in the country. And also allowed them to keep prices on a bit lower playing field or plane. So we had a divergent direction for the cutout value, as well as the fed cattle price. I see that improving in the next year, if we had to make predictions, that's the only one that I can offer. It’s yet to develop, but we have lots of reasons to believe that this market can get better, and that's both a supply and a demand story.

REIMAN: I'm hearing the message of good, good times ahead, but we know that there's variation among ranches and cattlemen. What can individual cattlemen do today to make sure that they’re successful as they can be in capturing the most value for those animals in the future?


Well, the first fundamental piece of the story would be to have as many animals around you, as you can to sell. If your outlook is optimistic, then that would be the first piece of the recipe. Secondly, I think so many folks participating in the production sector are doing a lot of things right and let's recognize that: better genetics in terms of cattle that work at each sector from ranch to feedlot, and then hanging on the rail. There are a lot of cattle that are really ringing the bell and doing things more correctly than ever before. So, stay the course for those folks that have made these improvements in genetics and management. And those that haven't, I hope can take something away from what we see in the markets today, which is wider spreads for carcass quality.

Those spreads have come through you know on the fed cattle pricing when we're looking at value-based carcass sales between feeder and packer. There's no reason to expect those to necessarily dissipate. I don't see a signal in the market today that would suggest that they should adjust much lower. So, I'd say continue to keep an eye on, on end-product merit. Keep an eye on, uh, process verification, if it fits for your, for your operation, where perhaps there are some additional management aspects that you can verify through a third party that fit the marketplace, whether it be domestic or export — you know those things I don't think will be going away in the near future either. As a matter of fact, what we see on the export front, I would recommend that they may become even more important and available premiums to more people. Although that's certainly a fluid situation, depending on how exports are going.

REIMAN: Well, those are some great concrete tips. If folks want to get ahold of Paul, you can find his contact information at And of course, if you want more market commentary like this subscribe to the CAB Insider, which Paul authors from his home office right there in Chappell. So thank you, Paul, for taking the time to visit.

DYKSTRA: My pleasure. And thank you.

REIMAN: For the in-depth news on everything that effects the Angus business, subscribe to the Angus Journal today. Visit for details.

Editor's note: Watch for Paul’s full year-end summary in the February Angus Beef Bulletin.


bottom of page