U.S. Beef Demand Continues Upward Trend

Preliminary second quarter 2001 data shows consumer demand for U.S. beef remains strong, the beef industry announced from this year's Industry Summer Conference.

Representatives of the Cattlemen's Beef Board (CBB) and National Cattlemen's Beef Association (NCBA) said checkoff-funded efforts are addressing the drivers that are keeping demand on the rise. According to a peer-reviewed demand index, demand for beef increased 5 percent the second quarter of 2001, compared to the second quarter of 2000. Beef demand has increased 10 of the past 12 quarters, compared to the same quarters the previous year.

"Never in history has the U.S. beef industry seen such success in consistently increasing consumer demand for our product," said Dan Hammond, chairman of the CBB and a beef producer from American Falls, Idaho. "The beef industry is answering consumer requests for easy and more convenient ways to purchase, prepare and enjoy beef. We realize that convenience is a lifestyle and we've responded by helping to develop new heat and serve products, new cuts of beef, and an improved meat case designed as a destination for convenience."

Beef demand, which is a measure accounting for both per capita consumption and consumer spending for beef, has trended upward since 1999. Stabilizing and increasing demand resulted after the industry put in place an aggressive business plan focused on delivering more convenient beef products, educating consumers about the bundle of key nutrients found in beef, and working hard to ensure U.S. beef remains safe.

"The Beef Demand Index is an accurate indicator of consumer buying trends related to beef," said Wayne Purcell, Virginia Tech Agricultural Economics Professor and creator of the Beef Demand Index. "Many people think the increase in beef demand is a direct result of a relatively strong economy, but there are many other factors that play a part. The beef industry's checkoff-funded programs have contributed to beef demand success."

Industry experts anticipate demand will remain stable even though total beef supplies will decline slightly over the next few years. Consumer expenditures for beef during 2001 are projected to total about $55.3 billion - up $2.4 billion from last year. This is despite the projection that total meat supplies in 2001 will be even with the 2000 record-setting production level of 81.8 billion pounds.

"With other companies and industries feeling the impact of tighter economic times, the beef industry continues its turnaround. The latest demand figures re-confirm that consumers see food, specifically beef, as a critical part of their livelihood and happiness," said Lynn Cornwell, president of the NCBA and a rancher from Glasgow, Mont. "Because of the enjoyment, convenience and nutrient bundle it provides, consumers aren't willing to cut back on their beef intake."

With beef checkoff funding, NCBA continues to work on behalf of the Beef Board and state beef councils to establish the meat case as a convenience destination. A new category of fully cooked beef roasts, steaks and other entrees, which can be heated in the microwave and ready to serve in about 10 minutes, has been developed, taking most of the preparation time out of these meals. Sales of these types of products have increased nearly 88 percent in the past two years, and annual sales for the category reached nearly $115 million as of April 2000.

One of the most innovative and consumer-friendly programs funded by the checkoff is the Beef Made Easy (BME) program. BME is the beef industry's meat case simplification program introduced in April 1999 that helps retailers re-set the entire beef section by cooking method, which is more in line with how consumers think about meals. Color-coded merchandising tools are used to guide store-level staff in converting to and maintain the new case set long term. BME - or a similar concept - is being implemented or tested in more than 10,000 retail outlets nationally as well as all 290 foreign and domestic military commissaries.

Twenty-five of the top retail chains - or 74 percent - are currently organizing the meat case by cooking method.