Beef Demand Shows Improvement After 20-Year Decline

November 3, 1999

Consumer spending on beef for January-September improved 4% to $36.7 billion over a year earlier. That could indicate beef demand is stabilizing for the first time in more than 20 years, say beef industry officials.

Beef industry analysts say demand increased 4.59% in the third quarter 1999 compared to demand a year earlier. Seasonal demand slipped 1.65% between the second and third quarters of this year, but industry officials remain optimistic that demand is improving.

The rate of decline of beef demand has been slowing since 1996, according to the beef demand index, calculated by leading independent economics and industry experts using USDA per capita beef consumption data and USDA choice retail beef prices adjusted for inflation.

A key factor in the total beef spending increase is that consumers are buying beef at steady to slightly higher prices, despite record-large beef supplies. USDA average retail beef prices increased 4 cents per pound from a year earlier, according to Cattle-Fax data. The beef supply for the year should reach nearly 27 billion pounds, 2.5% more than 1998.

Per capita beef consumption for January-September also increased -- 0.9 pounds from a year earlier. Cattle-Fax estimates year-end per capita consumption will increase to 69.2 pounds per person, a 1.6% increase from 1998. Data also show beef's share of total meat expenditures is stable compared to last year, despite competition from pork and poultry.

"We have made great strides toward improving consumer demand for beef, and we need to continue building on those successes if we are to keep demand on the upswing for America's beef producers," says Chuck Schroeder, National Cattlemen's Beef Association CEO.

The industry will continue to build on a "convenience" strategy for consumers in the year ahead, says Schroeder, and will add an aggressive nutrition component to the marketing effort, one that focuses on the bundle of nutrients beef provides such as zinc, iron, protein and several B vitamins.