Domestic and Global Opportunities for Producers of High-Quality CattleJOPLIN, Mo. (Aug. 31, 2011) — The amount of meat U.S. consumers eat is declining. Per capita consumption is decreasing for beef, but also for pork and poultry. There has been considerable research to determine the reasons for weakening demand. According to Scott Brown, assistant professor at the University of Missouri’s (MU's) Food and Agriculture Policy Research Institute (FAPRI), one of the factors contributing to decreased demand for beef is that many consumers prefer the consistent high-quality beef for which there currently is too little supply.
“When there is such intense competition for the center of the plate, creating a product that consumers prefer amounts to a win for the (beef) industry, hands down,” stated Brown, while speaking at the Applied Reproductive Strategies for Beef Cattle (ARSBC) conference, in Joplin, Mo. Brown said FAPRI research suggests U.S. beef producers should train their focus on producing high-quality beef.
The general economic recession has cause consumers to behave differently when making food choices, Brown shared. Often, they have substituted lower-priced products for higher-price items, and some consumers have turned from steak to lower-priced alternatives. However, sales of some premium beef products, such as Certified Angus Beef® (CAB®), actually grew. Despite a general trend toward reduced consumption and buy-down of food products, demand for high-quality beef increased.
Exports have bolstered overall demand for U.S. beef, Brown said , calling growth in export value “phenomenal." Current values in excess of $5,000 per metric ton represent a recover of up $1,000 per metric ton since values plunged in the wake of the 2003 discovery of bovine spongiform encephalopathy (BSE) in the United States. Brown noted ongoing recovery of beef exports to the important Japanese and South Korean markets, and growing markets in other countries. In many cases, he said, the newer markets exhibit a preference for high-quality beef.
“I see great potential for serving high-quality beef markets around the world,” Brown told attendees. “But there are going to be more competitors for those markets, too. The U.S. needs to have supplies available to meet the demand.”
Noting the low U.S. cattle inventory and continually declining cow numbers, Brown sees reason to shift into expansion mode and focus on quality. Supporting that strategy, he said, is the very real willingness of U.S. consumers to pay a premium for preferred quality products and the promise of greater global demand for high-quality beef. According to Brown, the economic incentive to produce more high-quality cattle already exists.
“The Choice-Select (price) spread has narrowed, but premiums for Prime beef have grown. There has been a return of demand for high quality,” Brown said. “Increasing the percentage of cattle that grade Prime could have consumer impacts that have eluded the industry for decades.”
Brown spoke during Wednesday's ARSBC session focused on the genomic and economic considerations of producing high-quality cattle. For more information, visit the Newsroom at www.appliedreprostrategies.com to view the PowerPoint slides and proceedings paper submitted by Brown to accompany his presentation. Audio of the presentation will be available soon.
Comprehensive coverage of the symposium is available online at www.appliedreprostrategies.com. Compiled by Angus Productions Inc. (API), the site is made possible through sponsorship by the Beef Reproductive Task Force, SEK Genetics, and liveauctions.tv. Coverage includes summaries of the speaker presentations, PowerPoints, proceedings and audio.
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