February 7, 2005

US Cattle Group says 2004 beef demand up nearly 8% on year

US consumers are biting on more beef, with the Beef Demand Index climbing 7.74 percent compared to 2003 and more than 25 percent since reversing its 20-year decline in 1998, US Cattlemen's Beef Board Chairman Nelson Curry announced at the Cattle Industry Annual Convention in San Antonio, USA.

The Beef Demand Index is calculated based on a series of formulas developed and monitored by Dr. Wayne Purcell, director of the Research Institute on Livestock Pricing through Virginia Tech University's department of Agricultural and Applied Economics. The index reflects several specific factors, including per capita consumption and consumer spending for beef.

"We knew it was a strong year for beef but these preliminary numbers for the demand index really surpass even our most optimistic expectations," said Curry, a cattleman from Kentucky. "With this continued strength, we've far exceeded the goal of the beef industry's Long Range Plan to increase demand by 6 percent between 2000 and year-end 2004, with demand during that period up an astonishing 17.65 percent."

Curry said he is particularly pleased with present demand showings in light of challenges that the beef industry faced in 2004 ¨C where a single case of BSE kicked off last year in the United States. Further, he said, it points up the value of being able to provide accurate, science-based information about the safety of the U. S. beef supply.

"Producers should be proud of what they've been able to accomplish in the face of so many challenges," Curry said. "If we can continue to build demand, we will be better off as cattlemen than we would be if demand were not growing."

The strength of the Beef Demand Index in 2004 shows optimism for the industry, indicating that beef demand is back on track. But there is no room for complacency, urged Curry.

Cattle-Fax estimates that the increase in demand since 1998 has added about US$22/cwt to the price of fed cattle. That means fed cattle that averaged US$84.50/cwt in 2004 would have sold for more like US$62.50/cwt if not for the tremendous increase in demand.

"The news on demand has been good, for sure, but those of us who are passionate about the beef industry want to see that index remain on its upward trend, and that means continued diligence in checkoff program areas such as youth education, beef safety, nutrition and promotion," he said.