1. The Future of Angus Beef Tom Brink

2. Commodity principles: Low costs & production efficiency Added Value & Product differentiation Effective Business Pyramid Both are required for success in today’s industry.

3. Angus Beef “More or Less” evaluation

4. What will we see MORE of ? LESS of ? Winners, Losers and making the industry better

5. MORE of the SAME regarding Angus Beef Popularity Dominant position with consumers will be maintained, because Angus is synonymous with HIGH QUALITY

6. CAB started the revolution in 1978. Today USDA lists 51 certified beef brands. 35 brands use the ANGUS name (69%). 15 new beef brands were created in 2004 and 2005 alone… And 14 of these incorporate ANGUS into their label (93%).

7. BookerElkhorn Valley Packing HarrisExcel PackerlandNational SwiftTyson Washington BeefCreekstone Plus…distributors SYSCO and AFG Even Wal-Mart has an Angus brand Packers are using the Angus name in their brands:

8. Black Angus Steaks For those who only insist on the very best, only Angus beef will do. Famous for its tenderness, juiciness, and flavor, this is the kind of meat that melts in your mouth. Pfaelzer Brothers has established a set of strict quality standards to insure that when you care enough to send Black Angus Beef, you get only the very finest.

9. Angus Beef is Everywhere …most recognized name in branded beef

10. Angus Ground Chuck Products 80/20 Midwestern Grain fed USDA Prime, Omaha Steaks Angus & USDA Choice Custom Hand-Trimmed Small Pack Sizes

11. Google Search Test Angus Beef1.38 million matches Hereford Beef312,000 Charolais Beef131,000 Limousin Beef124,000 Simmental Beef116,000 Gelbvieh Beef46,100 Salers Beef32,200 S. Highlander Beef33,400

12. More Differentiation in Angus Beef Program Specs

13. More “Granularity” Live animal requirements Marbling, maturity & yield grade Carcass weight range Natural product claim Source verified Age Verified Story line… “raised and fed with a mountain view” Affording both opportunity and risk for producers.

14. More Room for a few strong Non-Angus Beef Brands

16. More Angus Beef from Southern Cattle in Southern Plants

18. Costing the Beef Industry >$160 million per year

19. The problem is easy to see…

25. What do most Southern Genetics need ? Answer: He’s black and walks on four legs

26. More Angus Beef from “Non-Angus” Parents

27. More Angus Beef Produced from Hybrid-Angus Bulls on Angus-based cows

28. Why? because… No success goes unchallenged “Can’t beat them….join them” Hybrid vigor still matters in the cow-calf business Structured cross-breeding too difficult to implement Hybrid seedstock are convenient to use More muscle (better YGs) from Continentals Feeders, packers and consumers don’t care how the Angus genes get into the final product

29. Tracking the Hybrid Movement Simmental ---SimAngus - 40% of annual registrations Gelbvieh ---Balancers - 33% Limousin ---Lim-Flex -12% 60% and 40% of Chi and Maine registrations are Angus-based hybrids, respectively. Approximately 50,000 total registrations this year and growing by 15% to 20% annually.

30. Hybrid Seedstock Registrations* 100,000 by 2010 *Angus-based. Per Year

31. Five Rivers’ Personnel Comment on Angus’ Strengths “Grade, Grade, Grade” [Quality Grade] “Premium Programs” “Uniformity” ---add uniformity to a calf crop “Rib and Volume” “Able to eat a lot of feed” “Crossing ability with other breeds” “Marketability”

32. Five Rivers’ Personnel Identify Angus Soft Spots “Over fats” “Cutability problems before reaching desired dressing percent” “Higher percentage Angus means lower yields and a higher percentage of YG4s & YG5s” “Dressing percent, yield grade & muscling” “Not enough muscle for their out weights” “They cost too much”

33. Ideal Angus Percentage? 50% - 75% With the balance being Continental, as opposed to another British breed. They said….

34. More problems with YG4s in the Northern U.S. (in the short run)

35. Increasingly difficult for feeders and packers to deal with

36. What will we see LESS of? LESS opportunity to produce cattle with anonymity LESS profit potential on commodity cattle that can’t fit any branded beef program LESS room for seedstock and commercial cattle that have no Angus influence LESS of a “hard line” distinction between some breeds---Angus genetics are becoming the common link

37. What does all this mean to you as an Angus breeder?

38. Angus genetics will be recognized as the main ingredient for the entire beef supply chain But not the only ingredient

39. A whole new level of genetic accountability for seedstock and commercial producers is on the way

40. Extremely broad range of needs & wants within commercial cow-calf segment

41. Angus genetics---some in a non-traditional package--- will continue to win big in the years ahead

42. Angus in both Purebred and Hybrid form will dominate more of the seedstock sector

43. Cement is the main ingredient in concrete

44. Both products can produce concrete

45. ANGUS “Angus inside” Purebreds and Hybrids Selling Side by Side

46. The U.S. Beef Industry WINS too.