November 12, 1999 | By: Haven Miller

Recent market indicators show increased consumer demand for beef products. Improved health management practices, better genetics, and high-quality nutrition programs are necessary to maintain recent gains in beef demand.

"The keys to stronger demand lie in two areas," said Lee Meyer, University of Kentucky Extension marketing specialist. "One area is consumer willingness to dine out at restaurants and select beef as their meal, and the other area is the home market. The away-from-home market has been successful. Changing family lifestyles require new food products and better food products. This is where the beef industry must respond."

Meyer said recent market trends indicate consumers are willing to pay more for beef these days, but that alone does not signal an increase in "demand" as the term is defined by economists. When they pay more for larger supplies, as they did last year in the pork market, then cattle producers will know that the demand for their product has strengthened.

"We saw consumers paying good prices for pork at the store last winter, but farm-level prices were crashing. The reason is that consumers really wanted those pork products, and stores didn't have to lower prices to sell them," Meyer explained. "It's when consumers are paying more, and supplies of the product stay the same that you know there is a true increase in demand."

Over the last 20 years, the cattle industry has seen prices rise several times. But often, those rises resulted from a cutback in supplies -- not stronger demand. Meyer said lately that situation appears to be changing.

"We're seeing several indicators that people are paying more for beef with the supply being held constant," he said. "Increased household income is one possible reason, but changing consumer attitudes -- and producer attitudes as well -- are also playing a significant role."

According to Meyer, producers are putting more emphasis on producing higher-quality beef animals. He said past reports of occasional poor eating experiences among consumers prompted the industry to make changes. To sustain these gains, mechanisms that reward the best producers must be put into place at the farm level so those with improved management, will be encouraged.

"The beef industry is examining its business relationships, building alliances, and addressing consumer concerns and needs," said Meyer. "Those efforts appear to be producing positive results."


Writer: Haven Miller (606) 257-3784
Source: Lee Meyer 606-257-7276