We recently caught up with Glynn Tonsor, Associate Professor, Department of Agricultural Economics at Kansas State University, for an update about beef demand and the role of the checkoff in helping keep demand strong through targeted marketing efforts.
Tonsor 1: “Sixteen out of the last 17 quarters we’ve had a year-over-year increase, the only exception being the first quarter of this year. And I think a large part of why that’s going on is continued ongoing success of marketing the right products to the right people, and quite frankly, the segment of the public that continues to purchase beef is a slightly different segment than it used to be. So per capita consumption is going down, but we haven’t simply taken away two pounds from every household in the U.S. The industry, I think, is doing better of recognizing that and aligning what they produce with who is able and willing to buy it. And I have no reason to think that’s going to stop in the fourth quarter. The increase in the third quarter basically reflects the fact that we had less beef consumed, specifically we had a 4.6 percent decline, and it’s important to recognize that consumption decline is mainly just because we produced less. That’s just we produced less therefore per capita consumption is down. And what actually occurred was we had an 11.3 percent increase in price in the third quarter compared to the third quarter 2013.” (:57 seconds)
Tonsor said despite fairly wide-spread confusion on the topic, per capita consumption is not demand, as consumption alone says little about the value consumers place on beef offerings.*
Tonsor 2: “Demand increased. Basically nobody made the public pay more for those reduced pounds, but they did. And they not only paid more, they paid more than we expected. And that only occurs, they’re doing that voluntarily right, is if they’re seeing more value in there than was anticipated.” (:14 seconds)
Tonsor went on to explain what kinds of things are allowing demand to grow despite the supply challenges, and how the checkoff is playing a vital role in that process.