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Beef demand: It was for dinner

By Trent Loos

This is not meant to be a sensational piece of journalism but I think it’s time to face the facts. If the correct steps are not taken immediately by those of us who care about the future of the beef industry, we will be end up like the sheep industry.

How about just a quick bit of sheep history? The sheep industry in the U.S. had 60 million head of breeding animals at one time and today they number about 6 million. I doubt that I need to remind anybody that our cattle breeding numbers are headed in the wrong direction and at an all-time low since the 1950s.

One thing that has prompted my thoughts today was the release of the Beef Demand Determinant Study to identify the beef demand drivers that was commissioned by the Cattlemen’s Beef Board. The results would help determine which direction the checkoff programs should focus in order to have the most compelling effects on beef demand moving forward.

A note of interest is the three professors who conducted the study: Dr. Ted Schroeder, professor of livestock marketing and Dr. Glynn Tonsor, associate professor of livestock marketing, both at Kansas State University along with Dr. James Mintert, assistant director of Extension for Agriculture and Natural Resources at Purdue University.

Below is list of what I believe the key findings of this report are.

“Consumer demand for beef is one of the most important and widely discussed, yet poorly understood, concepts affecting the beef and cattle industry,” the report notes. “It is imperative that the beef industry recognize what drives consumer demand, what expectations are for the future, and assess the industry’s ability to adjust practices to target evolving consumer preferences or to influence important demand determinants.”

“Food safety, product quality and form, and price were the three highest-ranking factors in both consumer and expert assessments, whereas social aspects and sustainability were ranked lowest, with nutrition and health ranked between the two.”

“Young shoppers’ interests in specific health and nutritional aspects of beef present valuable opportunities to expand demand as the purchasing power of these consumers increases in coming years. Positioning and promoting healthfulness and nutritional benefits of beef is recommended.”

“Investments to address social and sustainability issues likely will have a lower demand-enhancement payoff than investments in other key areas, though responding to these issues might remain a ‘cost of doing business.”

“One very important point in developing strategies to grow beef demand will be clarification about the role of per capita consumption in beef demand. Per capita consumption is, in effect, per capita availability of beef, so it offers little information regarding beef demand when considered independently of prices, the economists note. Demand, on the other hand, effectively refers to the quantity of beef that consumers will purchase at one given price, with all other factors held constant.”

Here is where I must add my two cents on building demand for beef. At this point, the way that we market beef today is ill-guided. Every single ad that you see hear or read has to include “lean” and 29 “lean” cuts of beef. Let’s learn from our cousins in the pork business in that if you breed the fat (i.e., taste) out of the meat, you will be forced to “enhance” the finished product. Today 50 percent of all retail pork products are enhanced in order to please the consumer because we got rid of all the fat.

We still reward cattlemen for intramuscular fat because it generates a tremendous eating experience. If we fail to educate the consumer on the nutritional benefits of intramuscular fat because we are afraid they “won’t understand the benefits of good fat,” we lose. On a protein to protein basis, when it comes to price beef does not and should not compete with pork or poultry. If we continue down that path, we’ll be the next lost sheep.

We don’t need to follow that course. Beef is a great value for the food dollar. It gives you more of the essential nutrition in a 3 oz. serving than a 3 oz. serving of any other food substance on the planet. What is more important than that?

When was the last time you saw Cadillac marketing their cars by saying, “Hey, buy us. We are as plain Jane as a Chevy”?

Consumer meat demand grew 4.9 percent in April. Beef had the largest increase with a 9 percent increase, followed by pork with 4.2 percent and chicken with only a 0.2 percent increase. In adjusted dollars (2000 as the base), consumers spent $44.30 on meat in April, which was $1.08 more than last year and $3 more than the 2007-2011 average. We are on pace for consumers to spend $554 per person in 2013 on meat and poultry. We need to make sure we get that increase because our product makes them want to eat more!

Editor’s note: Trent Loos is a sixth generation United States farmer, host of the daily radio show, Loos Tales, and founder of Faces of Agriculture, a non-profit organization putting the human element back into the production of food. Get more information at www.FacesOfAg.com, or email Trent at trentloos@gmail.com.

Date: 6/24/2013



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