Demand: Important Word, Strong Results for Hard-Working Beef Producers
The Beef Checkoff is designed to build demand for beef and, great news, the CattleFax 2022 Outlook & Strategies Seminar in late November reported that beef demand is the highest it has been in 33 years. Retail, foodservice, and exports all had a remarkable 2021, laying the ground for some interesting, positive trends.
It’s important and exciting to note that beef demand (the quantity of beef consumers will buy at various prices) is widespread. Unlike in the past, higher sticker prices on beef aren’t really deterring consumer purchasing. Insights in 2020 by Kansas State University agricultural economist Glynn Tonsor showed that consumers were becoming less sensitive to rising meat prices and were willing to pay more to ensure high-quality beef was in their shopping carts. Higher wages may not be completely offsetting recent food inflation, but beef remains a good buy. According to CattleFax, in 2021, the average American needed to work less than 15 minutes to pay for a pound of Choice U.S. beef. That’s lower than in 2020 and even lower than in 2015 or the early 90s. Dr. Tonsor also helps producers stay aware of demand trends in his Checkoff-funded monthly Meat Demand Monitor.
Like American consumers, consumers around the globe are clamoring for U.S.-produced beef. Our product is currently being promoted through Beef Checkoff-funded programs in 80 countries around the globe: Japan, Korea, China, Mexico, Taiwan, the Middle East, South & Central America, Africa, the EU, and more. Despite COVID and supply-chain challenges, U.S. beef and variety meat exports topped a billion dollars in August, the first time any month has seen exports exceed that threshold. Since then, the trend has continued, with export value again topping one billion dollars for November. According to USMEF, a contractor to the Beef Checkoff, all indications are that total exports for 2021 will surpass 10 billion dollars for the first time ever. And the forecast shows there may be an additional 5% increase in beef exports next year for further gains. The United States only has 4% of the global population, but American cattle producers have proven time and again that they’re up to the task of providing quality produced beef for the world’s table.
So, at the end of the day, what does it all mean? Why should producers care about demand? First, because it’s one way to plainly see what Beef Checkoff-funded project work is achieving. Producers’ Checkoff dollars are lifting up all demand efforts, infusing dollars throughout the entire beef industry supply chain. Second, demand reaffirms that farmers and ranchers are producing something people desire, both domestically and internationally.
The Beef Checkoff program was established as part of the 1985 Farm Bill. The checkoff assesses $1 per head on the sale of live domestic and imported cattle, in addition to a comparable assessment on imported beef and beef products. States may retain up to 50 cents on the dollar and forward the other 50 cents per head to the Cattlemen’s Beef Promotion and Research Board, which administers the national checkoff program, subject to USDA approval.