Angus Demand

(Bob) Looking at price and quantity together helps tell the demand story. A recent update on a 2010 index from Kansas State University revealed a third year of modest growth for Choice beef demand, and the strongest growth on record for the Certified Angus Beef ® brand. 2015 data showed 5.7% more pounds sold despite record-high prices. (Schroeder) What we have continued to see in this beef market is that quality is ultimately what sells the product. Consumers want fresh nutritious, safe and high quality products. Eating is a very social activity, as we all know. Those are the things that consumers are demanding of their food products and so it is integral on the industry to help deliver the product that the consumer wants and of course quality is a huge metric in meeting that consumer preference. (Bob) This year’s numbers put CAB demand up 136% since 2002. That includes 11 consecutive annual increases. (Schroeder) What we have found is a CAB demand year over year was increasing at a really remarkable robust rate in the last several years. It means as you take price and quantity together consumers were willing to buy more of the product at the same price or even more at a higher price. It is a reflection of the consumers’ preference for and growing preference for a high quality assured product. (Bob) Acceptance rates and CAB tonnage has increased, but that has not softened the premiums available for those who produce the brand. (Schroeder) We see this across the wholesale market, the retail market as well, that the preference for that higher quality product is driving a wider and wider wedge between a high quality assured premium high product in the beef industry compared to a less well articulated product eating experience and that product that may have more uncertainty with it, may not deliver as consistent of a high quality. So the wedge between those growing is just another indication of the strength of demand that high-quality-assured, premium products are offering in the market. (Bob) All demand signals start with the consumer, the economist says, but astute farmers and ranchers can respond to them in the cattle market to capture the highest price for their product. I’m Bob Cervera.

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