Contact:	Diane Henderson	303/850-3465	dhenderson@beef.org	
 	Rich Otley	303/850-3452	rotley@beef.org	
Weak Economy Not Affecting Consumers' Appetite for Beef
New Beef Product Development Key Factor in Steady Beef Demand Increase

01/30/2003 
Demand for beef has increased more than 3 percent since 2000 and nearly 10 percent since its low in 1998, officials announced today from the 2003 Cattle Industry Annual Convention and Trade Show. Preliminary year-end demand data indicate that consumers’ appetite for beef remained strong through, despite record-high beef supplies, softened exports to key international markets, and a struggling economy. 
 “We’ve seen substantial improvement in beef demand since 1998, which is largely due to the development of new high-quality beef products for consumers, said Dr. Wayne Purcell, an economist at Virginia Tech.” Purcell also believes that the outlook for the U.S. beef industry is positive.  “Although the economy is still struggling, I expect that the industry’s expansion of exports and the development of even more new beef products will increase beef demand in 2003.  I’ll be very surprised if anything different happens.”
Beef demand, which is a measure accounting for both per capita consumption and consumer spending for beef, has trended upward since 1998. And while it’s no surprise that beef demand was down 1.45 percent in 2002 compared to 2001, Cattlemen’s Beef Board (CBB) Chairman Dee Lacey is said the industry remains well on track to meet its Long Range Plan goal of increasing beef demand by 6 percent between 2001 and 2004.  
“Since 2000, beef demand has increased more than 3 percent, which means we’re right on track to meet our Long Range Plan goal,” Lacey said. “It’s inspiring to see that American beef producers’ efforts to build demand through investment of their checkoff dollars have continued to pay off, even when the economy is shaky at best. Increasing the profit potential for all U.S. beef producers continues to be a key priority for the Beef Checkoff Program.”
Stephen R. Koontz, an agricultural economist with the Department of Agriculture and Resource Economics at Colorado State University, agrees that the industry’s checkoff-funded programs are working to increase demand.  
“One of the things that beef producers spend checkoff money on is encouraging the development of new retail products that improve the value of beef overall, especially that of undervalued cuts,” Koontz noted in a independently produced white paper released this month. As demand for beef has increased, he said, so too have cattle prices.
The Beef Checkoff Program’s R&D Ranch Team at the National Cattlemen’s Beef Association is the creative and technical warehouse charged with developing new beef concepts that deliver convenience and value to help fuel consumers’ love affair with beef. “The R&D Ranch Team is a catalyst for innovation to companies that are investors in the food industry, including consumer brand manufacturers, retailers, and foodservice operators,” said Carl Blackwell, executive director of product marketing for NCBA. “It’s our job to communicate the benefits of beef to these companies in order to ensure that they add new beef products to their product lines, meat cases, and menus.” 
Growing consumer demand is one part of the equation, which will require the industry to maintain consumer confidence in beef, introduce more consumer-friendly products and grow the export market.  
Protecting the business climate for America’s beef producers is the second track of the industry’s long-range plan. This entails increased cooperation and communication among industry segments, greater efficiencies in production and supply management and working with government to ensure fair business practices for America’s ranchers and farmers, among other things.
According to Andy Tucker, vice-chairman of the Cattlemen’s Beef Board and a beef producer from Rockledge, Fla., individual beef producers will see a greater share of the benefits as the industry continues to build its record of success in these areas.  
“As demand increases, we can sell beef at slightly higher prices, and that equals greater returns for those of us in the beef business,” Tucker said. “The long-term outlook will only get better the more we can match demand signals with our production and supply levels.” 
The industry plans to keep pace with consumers’ busy lifestyles by helping manufacturers bring more consumer-friendly products to market. Just a few short years ago, the industry helped introduce an entirely new category of fully cooked beef products that could be heated in the microwave and ready to serve in minutes. Sales for these types of products have increased more than 100 percent since 1999, and annual sales for the category topped $147 million as of November 2002.1
This type of innovation helped spur an influx of new beef products to the supermarket channel.  According to data from Marketing Intelligence Service, Ltd., roughly 1,500 new beef products were introduced at the retail level during the last four years.2
The Beef Board also is using checkoff funds to encourage introduction of new beef items on restaurant menus. Quizno’s restaurants, for example, sold more than 600,000 pounds of beef from the top round cut as a result of a checkoff-supported promotion for the company’s Bistro Beef Sub with Au Jus Dipping Sauce last fall.  During the promotion, beef use at the restaurant was up nearly 50 percent over its monthly 2002 average.
The Beef Checkoff Program also continues to promote the nutritional benefits of beef.  All of these consumer-friendly beef products deliver a bundle of essential nutrients, including zinc, iron, protein and many B-vitamins, thereby giving consumers more reasons to choose beef.