Beef demand: More complex than you think

More beef will continue to hit the marketplace and demand will matter when it comes to getting it all sold. But a new study reiterates that demand is more complex than we may think.

February 6, 2020

3 Min Read
Woman eating a burger
Beef Checkoff

In 2019, the beef industry witnessed record numbers. In all, 26.4 million head of steers and heifers, plus another 7.1 million head of cows and bulls were harvested to produce record levels of beef in country. These production and slaughter numbers translate into 513 million pounds of beef a week filtering through the U.S. marketplace. With all-time record high pounds of beef being produced, the industry continues to be intent on learning as much as it can about beef demand. 

Dr. Derrell Peel, Professor of Agribusiness at Oklahoma State University teamed up with former master’s degree student, Lauren Bell-Clark to study the complexities of beef demand. The study consisted of 30 interviews with representatives from 22 organizations across all segments of the beef industry, including distributors, further processors, retail, food service, and industry organizations. From the interviews the team gained additional information to better understand beef products, product flow and product interaction. Peel and Clark reported their results during the 2020 Cattle Industry Convention Cattlemen’s College held Feb. 5 in San Antonio, Texas.

 “The goal of our research project was to take beef demand and dis-aggregate it into a lot more specifics,” said Peel. "Beef demand is not one thing, consumers do not buy beef, they buy specific beef products or cuts of beef and most of the time the biggest substitute for a beef product is another beef product." 

Related:Beef Checkoff: Does it affect demand and price?

In Bell's summary of the comprehensive research some of the key findings included the growth and predicted future growth of ground beef in the market place. Currently ground beef is 50% of the U.S. beef market consumption, but estimates are that it could grow to 62%. Growth is also being witnessed in bone-in products. She also reported retail continues to drive beef demand more so than food service, and exports are growing demand and price levels for cuts, particularly from the chuck. 

Carcass size continues to rise, resulting in industry implications such as its impact on labor. "Labor is a huge, huge challenge in the industry no matter what segment we talked to," said Peel. The issues associated with labor varied across the segments but included things such as size and weight of the carcass in plants, added weight to boxes delivered to retail and food service and access to labor in the supply chain. 

Another interesting change noticed about demand was the shift in seasonal price pattern for different cuts. Impacts are higher highs or lower lows than what the industry has typically experienced for specific cuts or complete shifts in the seasonality because of demand creating a challenge for the further processors of beef. Previously, meat industry stakeholders were able to make decisions by the calendar, however, those interviewed reported this will not be a standard practice in the future due to shifts in seasonal practices and continual changes in demand. 

Related:Beef demand keeps growing supply churning

"The way we have traditionally looked at beef demand will not be sufficient going forward," reported Peel. 

B. Lynn Gordon is a freelance writer from Sioux Falls, S.D.

Subscribe to Our Newsletters
BEEF Magazine is the source for beef production, management and market news.

You May Also Like