February 2, 2003

Demand for beef has increased more than 3% since 2000 and nearly 10% since its low in 1998, officials announced at the 2003 Cattle Industry Annual Convention and Trade Show. Preliminary year-end demand data indicate that consumers' appetite for beef remained strong through, despite record-high beef supplies, softened exports to key international markets, and a struggling economy.

"We've seen substantial improvement in beef demand since 1998, which is largely due to the development of new high-quality beef products for consumers, said Dr. Wayne Purcell, an economist at Virginia Tech." Purcell also believes that the outlook for the U.S. beef industry is positive. "Although the economy is still struggling, I expect that the industry's expansion of exports and the development of even more new beef products will increase beef demand in 2003. I'll be very surprised if anything different happens."

Beef demand, which is a measure accounting for both per capita consumption and consumer spending for beef, has trended upward since 1998. And while it's no surprise that beef demand was down 1.45% in 2002 compared to 2001, Cattlemen's Beef Board Chairman Dee Lacey is said the industry remains well on track to meet its Long Range Plan goal of increasing beef demand by 6 percent between 2001 and 2004.

"Since 2000, beef demand has increased more than 3 percent, which means we're right on track to meet our Long Range Plan goal," Lacey said. "It's inspiring to see that American beef producers' efforts to build demand through investment of their checkoff dollars have continued to pay off, even when the economy is shaky at best. Increasing the profit potential for all U.S. beef producers continues to be a key priority for the beef checkoff program."

Stephen R. Koontz, an agricultural economist with the Department of Agriculture and Resource Economics at Colorado State University, agrees that the industry's checkoff-funded programs are working to increase demand.

"One of the things that beef producers spend checkoff money on is encouraging the development of new retail products that improve the value of beef overall, especially that of undervalued cuts," Koontz noted in a independently produced white paper released this month. As demand for beef has increased, he said, so too have cattle prices.

The beef checkoff program's "R&D Ranch̉ Team" at the National Cattlemen's Beef Association is the creative and technical warehouse charged with developing new beef concepts that deliver convenience and value to help fuel consumers' love affair with beef. "The R&D Ranch Team is a catalyst for innovation to companies that are investors in the food industry, including consumer brand manufacturers, retailers, and foodservice operators," said Carl Blackwell, executive director of product marketing for NCBA. "It's our job to communicate the benefits of beef to these companies in order to ensure that they add new beef products to their product lines, meat cases, and menus."

Growing consumer demand is one part of the equation, which will require the industry to maintain consumer confidence in beef, introduce more consumer-friendly products and grow the export market, officials said.

Protecting the business climate for America's beef producers is the second track of the industry's long-range plan. This entails increased cooperation and communication among industry segments, greater efficiencies in production and supply management and working with government to ensure fair business practices for America's ranchers and farmers, among other things, the convention attendees were told.

According to Andy Tucker, vice-chairman of the Cattlemen's Beef Board and a beef producer from Rockledge, FL, individual beef producers will see a greater share of the benefits as the industry continues to build its record of success in these areas.

"As demand increases, we can sell beef at slightly higher prices, and that equals greater returns for those of us in the beef business," Tucker said. "The long-term outlook will only get better the more we can match demand signals with our production and supply levels."