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Beef Buzz News

Beef Demand Index Showing Continued Positive Signs, K-State Economist Says

Mon, 27 Feb 2012 18:23:43 CST

Beef Demand Index Showing Continued Positive Signs, K-State Economist Says
Demand for beef is on the rise domestically and internationally. That’s what livestock economist Dr. Glynn Tonsor of Kansas State University says, but he also says there are challenges ahead.

“Beef demand is up 2 ½ percent in 2011 relative to 2010. That’s the first year there’s been an annual increase since back to 2004, the Atkins diet era, if you like. So that’s good.”

He says part of the reason is not that demand has necessarily soared to new heights, but that demand is beginning to recover along with the broader economy.

“The fourth quarter of 2011 was the sixth consecutive quarter that there’s a year-over-year increase in demand. One of the reasons that’s occurring is a lot of those quarters are compared to the depths of the recession. The fact that there’s been staying power over six quarters, that’s a good thing.”

Even with the incremental improvement, there is still a lot of room for growth, Dr. Tonsor says.

“The industry has fallen off the demand front notably since 1980. 2011’s index of 51.7 is weaker than 2008, but we’ve improved 2010 beyond 2009, but we’re weaker than in years prior to that. So we have a long, long way to go.”

One issue that producers need to watch to be in the best position to increase demand in coming years, he says, is the issue of individual animal traceability. He says the U.S. is falling behind and that could hurt exports.

“If you believe, as I do, that global demand is where the future is for demand growth more so than domestic demand growth, that’s a big deal because in the global arena you have to compete with other countries and one of the stipulations of trade is animal ID and traceability to certify other claims. So the industry needs to pay-I truly believe this-due attention because there is a very real risk a major importing country will decide with, maybe, the help of one of our major exporters twisting their arm, that we need to quote, unquote “raise the bar” of what the minimum amount of animal ID and traceability capabilities are in any country they want to import from.”



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