1. BEEF DEMAND
The good news? The industry maintained substantial gains in beef demand throughout the last five years, thanks in part, to our Beef Checkoff Program.
The All Fresh Beef Demand Index advanced 7.9 percent in calendar 2015, marking the fifth straight year of annual demand increases.
Even in the tough fourth quarter of calendar 2015, beef demand advanced 1%.
Demand in 2015 was the strongest since 1991
Ag economics say there are profits to be had in the next few years, as we build the beef supply further, but these years will not be as profitable as the historic revenues of 2014.
Maintaining strong beef demand through a supply increase gives us the best possible outcome in the face of marketplace fluctuations, and so the checkoff will continue to supply our customers with research, education, information and promotion about beef.
Consumer-facing checkoff programs are always based on what our consumers tell us is important to them to increase their preference for beef – including things like beef quality, taste, nutrition and safety, as well as information about the care you take as stewards of the land and animals to raise beef.
Unfortunately, the checkoff cannot control the marketplace.
Goal of the Beef Checkoff Program is to increase demand for beef.
Demand is not the same as consumption, which is a statement of supply. Demand incorporates the price that consumers are willing to pay for beef vs. competing proteins.
The Beef Checkoff cannot control beef-production levels.
Currently, producers have chosen to increase levels by retaining females in order to grow the national cow herd. Further, the industry is more efficient than ever, and continually increasing number of pounds of beef per animal.
These decisions at the production level result in more beef in the market, and even more to come in the next few years.
With no control of supply, beef checkoff efforts are designed to address maintaining and building long-term beef demand in domestic and international markets rather than to directly address short-term market volatility.
For producers, it’s particularly difficult after reaching all-time price highs to have to deal with current, and short-term-future market challenges, but cattle producers have been through these cycles many times before and know the importance of strategic ranch management and financial planning at this time.