Beef Demand: Determinants & Future Drivers

Demand Determinant Study “Beef Demand: Recent Determinants and Future Drivers” Checkoff commissioned economic study to summarize current knowledge about beef and hone in on consumer demand drivers Aim is to identify best opportunities to influence demand positively Performed by ag economists at Kansas State and Purdue universities Checkoff commissioned this study to gather our current information about beef demand and identify, through consumer research and testing, what it is that makes consumers tick when it comes to beef…. What would make them more interested in eating beef more often, if they aren’t already. Goal then was to identify which of those drivers are not only most important to consumers but which of those important drivers does the checkoff have opportunity to influence in a compelling manner… Authors of the report include Dr. Ted Schroeder, professor of livestock marketing, and Dr. Glynn Tonsor, associate professor of livestock marketing, both at Kansas State University, in addition to Dr. James Mintert, assistant director of Extension for Agriculture and Natural Resources at Purdue University, The chairman of our Evaluation Committee, who is a producer in California, said he believes that the information gathered and analyzed for this comprehensive report is “almost invaluable to the beef industry and the beef checkoff.”…. Not only does it provide a tool to help more producers understand the true meaning of strong beef demand – but it also has the potential to improve their bottom lines by providing a detailed road map for checkoff leaders in identifying how to leverage every checkoff dollar to its most effective and meaningful degree possible. . So let’s look at some of the results (flip to next slide)

Demand Determinant Study Key Findings: Food safety, product quality and price identified as most important demand drivers that the checkoff and beef industry stand to influence Checkoff cannot control price, leaving food safety and product quality as the two key attributes the checkoff can and should influence. Research gathered and ranked issues affecting beef purchases, both according to consumer responses and industry researcher responses, and found general agreement between the two. Food safety, product quality and form, and price were the three highest-ranking factors – or demand drivers -- in both consumer and expert Checkoff cannot control price – as it is market-driven.

Demand Study Findings Other important demand drivers identified: Health Nutrition Social aspects Sustainability Among the remainder of the most important drivers, social aspects and sustainability ranked lowest, with nutrition and health ranked in the middle. Keep in mind that, while these categories were not ranked as high as the first three, these seven were, as a whole, identified as the most important demand drivers to which the industry must continue to pay heed. It does not mean that we should stop working on these issues, but helps us prioritize them when we’re looking at limited budgets to apply to them. Members of the Beef Board and the Federation of State Beef Councils will be asked to use the information in this report in making decision about hot to invest checkoff dollars in Fiscal 2014 and for several years after that. So what CAN the checkoff do to influence beef demand?

Influencing Beef Demand What is the checkoff’s role? Checkoff is a catalyst for change Designed to simulate supply chain to sell more beef and consumer to buy more beef Accomplished through initiatives in six program areas The checkoff doesn’t actually own or sell cattle or beef products but instead is meant to stimulate others to do that. This happens through investments in national and state programs in six areas

Influencing Beef Demand What can the checkoff do? With support of demand study, in addition to extensive market research, checkoff has identified priorities Beef Board and Federation of State Beef Councils to meet in joint committees to recommend checkoff FY20104 work plans to address priorities T

Influencing Beef Demand What can the checkoff do? Key Program Inclusions: Continue investing in food-safety enhancement and assurances. Continue development of new high-quality products that offer consistently excellent flavor, color, tenderness, juiciness AND label those products to help consumers understand and use them.