000116 U.S. Beef Demand Stabilizes After 20 Years

Washington - With the nation's economy soaring, U.S. consumer demand for steaks, hamburgers and other cuts of beef is stabilizing for the first time in more than 20 years, according to beef industry analysts.

Per capita spending on beef is expected to grow to $178 in 1999. This level of consumer spending represents a $5 per capita gain, and the largest increase in per capita spending since 1990, according to the National Cattlemen's Beef Association, a trade group of America's cattle ranchers.

The yearly figure will not be available until early February.

“That's good news,” said Chuck Lambert, chief economist for the trade group. “Beef spending at record levels shows that consumers are willing to pay expendable dollars on beef.”

A key factor for the increase in total beef spending is that consumers are buying beef at steady to slightly higher prices despite record-high beef supplies, he said.

During the past two decades, beef lost ground to chicken, fish and other protein sources considered more healthy by American consumers.

In addition to increased consumer spending, per capita beef consumption from January through September 1999 is up 0.9 pounds from a year ago. Industry analysts estimate year-end per capita consumption will jump to 69.2 pounds per person, a 1.6% increase from 1998 figures.

Consumer spending on beef from January through September 1999 totaled $36.7 billion, up four percent compared to the year-ago period. For all of 1999, consumer beef spending is projected to reach $48.56 billion, nearly $2 billion above 1998.

Stanley Barby, 59, who manages his family's 11,000 stocker cattle farm in Beaver, Oklahoma, said the recent beef trends are a needed boost for the whole industry.

“We (farmers) went from losing so much, to breaking even, to now making a little,” he said.

U.S. Agriculture Department data showed average retail beef prices were up 4 cents per pound in 1999 from the previous year. At the same time, the beef supply for 1999 was expected to reach nearly 27 billion pounds, 2.5% above the 1998 level.

Other factors such as improved exports during the first half of 1999 helped boost U.S. beef demand. Japan and Korea have begun to increase imports of American beef as their respective economies begin to recover, and Mexico is expected to remain a strong import customer.

“We continually remain optimistic about the recent demands for beef,” said Lambert. For a while, beef was getting a bad rap."

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