010820 U.S. Beef Demand Continues Upward Trend

Denver, CO - 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% 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% in the past two years, and annual sales for the category reached nearly $115 million as of April 2000.1

The beef checkoff also has helped to spur new value-added fresh products like pre-marinated beef roasts, new beef items for the deli category, frozen meal kits containing beef, and value-added products for the foodservice channel. More importantly, this category helped reposition beef as a convenient meal option and stimulated additional innovation in the industry.

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% -- are currently organizing the meat case by cooking method.

Consumers today also are feeling better about beef's nutritional benefits, due in part to a major checkoff-funded marketing effort designed to increase awareness of the zinc, iron, protein and B-vitamins found in beef. 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 1999.2

Decades of leadership in the food safety and animal health arenas have helped set the U.S. beef industry apart from other regions of the world. Industry leadership is particularly apparent with regard to animal disease such as Bovine Spongiform Encephalopathy (BSE or “mad cow disease”) and foot-and- mouth disease -- two epidemics that have severely damaged the European beef economy in recent years. Neither disease exists in the U.S. Despite significant media attention due to BSE and FMD in Europe and other countries, consumers are still confident in the safety of the American beef supply. In fact, a checkoff- funded independent study conducted in July 2001 by Wirthlin Worldwide found that while consumer awareness of these animal diseases was very high at 89%, consumer confidence in America's beef supply was also high at 86%.

“Not only is America's beef safe, but it is also wholesome, providing people with vital nutrients for everyday life. The industry's efforts to simplify the lives of consumers by rearranging the meat case to become a convenience destination is a large step in the right direction towards future success,” said Hammond.

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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