010222 Beef Demand Up for 7th Consecutive Quarter

San Antonio, TX - With seven straight quarters of increased beef demand under its belt, the U.S. beef industry has an aggressive long-range plan to keep demand and profitability growing, said Chuck Schroeder, chief executive officer for the National Cattlemen's Beef Association.

“Year-end beef demand for 2000 is expected to be 3.6% higher than 1999 levels,” Schroeder said from the 2001 Cattle and Beef Industry Convention and Trade Show. “Today, the beef industry is one of the most dynamic segments of the U.S. agricultural economy, and we're just getting started. We've set an aggressive goal to boost demand another 6% through 2004.”

Schroeder explained that the industry's ability to stabilize consumer demand for beef was the result of diligent planning, persistence and focus.

“We began laying the ground work in the mid 1980s by emphasizing improvements in product consistency, tenderness and overall quality; new product development; enhanced relationships with channel marketing partners; multiple beef safety intervention measures; the opening of export markets; and research into beef's nutritional values and benefits,” Schroeder explained. “These efforts began to pay off in 1999, when the beef industry saw consumer demand for beef increase for the first time in nearly two decades.”

Increased consumer spending and per capita beef consumption have contributed greatly to the health of the U.S. beef industry. According to Cattle-Fax, a private market research firm, consumer expenditures for beef will likely top $52 billion in 2000 -- the first time ever annual spending will exceed $50 billion. Yearly per capita consumption of beef is projected to reach 66.2 pounds, while per capita consumption for pork and chicken are expected to total 50.5 and 55.8 pounds, respectively.

These gains are happening at a time when beef supplies are record high, which usually sends prices lower to compensate for market saturation. In the beef industry's case, average retail prices have actually increased (up about 15 cents per pound compared to 1999 prices), signaling a true turn-around in consumer demand.

“We've worked hard to deliver added value to the consumer, and when consumers are consistently seeing that value, price becomes less of a factor in the purchase decision,” Schroeder said.

While not discounting the impact of the U.S. economy in recent years, Schroeder believes one of the greatest drivers of change for the industry was the formation of a long-range plan that focused all industry segments on a single goal -- stabilizing consumer beef demand.

“Historically, it's been difficult for the beef industry to keep up with demands of the marketplace,” said Schroeder, who celebrates his five-year anniversary as NCBA CEO this month. “To turn the tides, we had to leave traditional business practices behind and create a visionary plan that all segments of the industry could get behind -- one that helped us compete in a new economy ruled by consumer spending power and brand appeal.”

In addition to increased communication and cooperation among industry segments, the industry's long-range plan focused on:

- The introduction of convenient beef products that meet the needs of busy consumers

- A science-based effort to increase awareness of essential nutrients in beef -- like zinc, iron, protein and many B-vitamins -- and the benefits those nutrients provide

- Expanding the export market for U.S. beef products

Three years ago, through the use of checkoff dollars, NCBA helped promote a new category of fully cooked beef roasts, steaks and other entrees that could be heated in the microwave and ready to serve in about 10 minutes. Since then, sales of these types of products have increased 41.4%, and annual sales for the new category topped $84 million as of December 2000. The beef checkoff also addressed beef's market share in the value-added fresh category, deli category, frozen meal kits containing beef and value-added products for the foodservice channel.

In 1999, the industry launched a major checkoff-funded marketing effort to boost consumer awareness of beef's unique nutrient bundle. It also publicized new research that found lean beef and chicken had similar effects in lowering blood cholesterol levels when included in a heart-healthy diet. A recent consumer attitudes study of more than 1,300 adults found Americans were more likely to say they feel better about beef's nutritional value today (35%) than they did a year ago (25%). Fifty-four percent of Americans agree beef is an important part of a balanced diet and healthy lifestyle, compared with 51% in 1999.

Total beef exports through September 2000 were up 12.6% in volume and 17.6% in value, compared to the same time last year. The beef export market is expected to grow roughly 50% over the next five years, from 1,218,000 metric tons in 2000 to 1,817,000 metric tons in 2006. China is expected to join Japan, Mexico, Canada and the Republic of South Korea as a key trade partner once it joins the World Trade Organization, which is anticipated to happen by mid-2001.

“There is cooperation across business segments in the beef industry like never before,” Schroeder added. “Beef producers and industry partners are working to produce high quality beef products that satisfy consumer needs.”

Beef industry demand-building efforts are funded by beef producers through their $1-per-head checkoff program and are managed domestically for the Cattlemen's Beef Board and state beef councils by the National Cattlemen's Beef Association. The national beef checkoff is administered by the Cattlemen's Beef Promotion and Research Board. This 110-member board is appointed by the Secretary of Agriculture to oversee the collection of the $1-per-head checkoff, certify state beef councils, implement the provisions of the Federal Order establishing the checkoff and evaluate the effectiveness of checkoff programs.

Producer-directed and consumer-focused, the National Cattlemen's Beef Association is the trade association of America's cattle farmers and ranchers, and the marketing organization for the largest segment of the nation's food and fiber industry.

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