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February 16, 2001

By Mike Barnett
Editor

Beef is Back and in a big way...

was the message of a cheerleading opening general session at the National Cattlemen's Beef Association meeting in San Antonio.

Not that producers don't have anything to be enthusiastic about. Chuck Schroeder, NCBA chief executive officer, noted the U.S. beef industry has enjoyed seven consecutive quarters of growth. That was welcome news after 28 years of decreasing demand.

"Year-end demand for 2000 is about 3.6 percent higher than 1999 levels," Schroeder said. "Today, the beef industry is one of the most dynamic segments of the U.S. agricultural economy, and we're just getting started. We've set an aggressive goal to boost demand another six percent through 2004."

Plan focus: stabilize demand

Monte Reese, chief executive officer of the Cattlemen's Beef Board (CBB), which administers checkoff funds, said much of the industry's recent success started three years ago when a long-range plan focused resources on a single goal: to stabilize beef demand for the year 2001.

"Ladies and gentlemen, it is 2001 and we have more than reached that goal," Reese told an upbeat audience. "And it's good that we did so, because last year the U.S. cattle industry produced an all-time record beef supply of 26.8 billion pounds.

"At the same time we had record supplies of poultry and near record supplies of pork. Historically, when supplies are that strong, it puts considerable pressure on prices producers receive.

"That changes when you build demand," he continued. "This year, for the first time in history, U.S. consumers spent over $50 billion ($54 billion) for beef."

Reese tracked the rise in beef demand, noting that demand increased 3 percent from the end of 1998 to 1999, and another 3 1/2 percent from the end of 1999 to the end of the year 2000.

"What that means, is with the latest quarterly data, we have enjoyed seven consecutive quarters of increasing beef demand," he said. And it is that increasing beef demand that lights the surest trail to improved profitability for producers. That, after all, is what this beef checkoff is about."

CEO Schroeder, while not discounting the impact of the surging U.S. economy in recent years, also credits the long-range plan for the industry turnaround.

"Historically, it's been difficult for the beef industry to keep up with demands of the marketplace," Schroeder said. "To turn the tides, we had to leave traditional business practices behind and create a visionary plan that all segments of the industry could get behind—one that helped us compete in a new economy ruled by consumer spending power and brand appeal."

In addition to increased communication and cooperation among industry segments, the long-range plan focused on:

•The introduction of convenient beef products that meet the needs of busy consumers.

Three years ago, NCBA, using checkoff dollars, helped promote a new category of fully cooked beef roasts, steaks and other entrees that could be heated in the microwave and ready to serve in about 10 minutes.

Since then, sales of these types of products have increased 41.4 percent, and annual sales for the new category topped $84 million by the end of last year. Checkoff dollars also addressed beef's market share in the value-added fresh category, deli category, frozen meal kits containing beef and value-added products for the food service channel.

•A science-based effort to increase awareness of essential nutrients in beef and the benefits those nutrients provide. In 1999, the industry launched a major checkoff-funded marketing effort to boost consumer awareness of beef's unique nutrient bundle. It also publicized new research that found lean beef and chicken had similar effects in lowering blood cholesterol levels when included in a heart-healthy diet.

A recent consumer attitudes study of more than 1,300 adults found Americans were more likely to say they feel better about beef's nutritional value today (35 percent) than they did a year ago (25 percent). Some 54 percent of Americans agree that beef is an important part of a balanced diet and healthy life-style, compared with 51 percent in 1999.

•Expanding the export market for U.S. beef products.

Total beef exports through September 2000 were up 12.6 percent in volume and 17.6 percent in value, compared to the same time last year. The beef export market is expected to grow roughly 50 percent over the next five years, from 1,218,000 metric tons in 2000 to 1,817,000 metric tons in 2006.

China is expected to join Japan, Mexico, Canada and the Republic of South Korea as a key trade partner once it joins the World Trade Organization, which is anticipated to happen by mid-2001.

New plan approved

Building upon seven quarters of success, cattle producers at the NCBA annual board of directors meeting approved a new long-range plan, taking a two-fold approach of both increasing demand and improving the business climate.

The plan is designed to increase the potential for the profitability of all industry segments. Included in the plan are multiple components that focus on factors that impact beef demand such as food safety, nutrition, positive eating experience, convenience and exports. The plan also focuses on factors that impact the business climate for beef production including the government, public opinion, efficiency and cooperation among industry segments. The plan is a framework to focus efforts for the next three years, with a goal of increasing beef demand 6 percent by 2004.

Paul Genho of Kingsville, who co-chaired the Long Range Planning Committee with Bill Brandenberg of El Centro, Calif., said it was created to deal with issues that the industry could impact.

Producers continue checkoff support

Nearly two-thirds of beef producers support the beef checkoff, according to the results of an independent survey released recently at the NCBA meeting in San Antonio.

The research showed that 65 percent approve of the checkoff, while about 21 percent disapprove. The level of support is basically unchanged from January 2000.

Conducted for the Beef Board by Aspen Research of Boulder, Colo., the research was completed in January.

The survey also indicated that nearly 60 percent of producers believe the beef industry is headed in the right direction, while 31 percent believe the industry is headed in the wrong directtion. Producers have more confidence in the future direction of the industry than a year ago.

When asked why they support the checkoff, the majority of producers cited the benefits of advertising, consumer education and research programs.

Thirty-one percent of producers said they were well informed about the checkoff.