Changing Consumer Part of Strong Beef Demand PictureWed, 06 May 2015 19:30:20 CDT
Even with higher prices, consumers continue to buy beef. Nationally beef demand has increased for the past four years with demand up 18 of the last 19 quarters. Kansas State University Agricultural Economist Glynn Tonsor said beef demand has remained strong as consumers have been willing to buy beef at higher prices.
For many years, Tonsor has been developing a beef demand index. With this increase in beef demand, he said this is a hard story to understand in how this is being realized. With tighter supplies, he said there are fewer pounds being consumed per person. That means there are some households have decreased their beef consumption, some have remained unchanged and maybe some have increased. He said that net change in the household is critical to the beef demand situation.
Radio Oklahoma Network Farm Director Ron Hays featured Tonsor on the Beef Buzz feature. Click or tap on the LISTEN BAR below to listen to today's Beef Buzz.
Tonsor has found a fair amount of evidence particularly on the muscle cut side for strong demand. He has found those Americans that have kept their jobs, did not experience unemployment in the last recession and continue to be benefactors in today's global economy continue to buy beef. With all of these knowledge-based jobs that have been doing well for the last half dozen years, he said these consumers are increasingly the target market as they are consuming a higher share of muscle cuts. He said that's a very positive story, because implicitly they are probably less price sensitive.
"They are able to purchase these products at a higher price, than we used to think was feasible, mainly because the new consumer base is less price sensitive than what we used to think the consumer base was," Tonsor said. "I think that has a lot do with the consumer base itself changing."
Part of this equation is also the improvement in the consistency and quality of beef. Tonsor said with a more consistent product line, consumers are willing to pay more for the product because there is less downside risk.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network- but is also a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show- and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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