Dr. Glynn Tonsor discusses Beef Demand Survey

(Dr. Glynn Tonsor) The main purpose of the study was to explore the feasibility of refining our ability to monitor beef demand. Currently, myself and some others around the country, quarterly put out a very aggregated beef demand measurement. What I mean by that is, we treat all beef the same whether it went through food service or grocery stores, whether it was loin or ground. It was very, very aggregated monitoring that we put out on our AgManager.info website for example, but some of the concerns with that is it’s quarterly, so it’s slow in coming. It’s aggregated nationally, so we can’t break it apart by region as well as market channel. And at the end of the day, we need more refined demand measurement that is a little more product level, hopefully, a little more region specific, and ideally split by market channel, food service versus grocery store as opposed to very aggregated. Beef demand itself tells us how the consumer views our products and ultimately every dollar that retailers all the way down to seed stock producers have comes from consumers, it gets passed through in different ways and understanding the demand from the end consumer is actually very, very essential. Why more refined demand insight is, there are different sectors of the industry that are obviously focused on one thing. If you’re a grocery store, you don’t care as much about what’s going on through restaurants and vice versa. If you are a target ground beef processor, you’re a lot more interested in ground beef demand than your loin demand. So as we can refine the insights you target information for those different players in the industry and that’s very valuable for them. Collectively, for producers, the net of that is what’s important. So if I raise a calf and sell to somebody else, ultimately the value of all the products that come off the carcass later down the chain is why my 550-pound calf is worth what it is. And if I understand collectively that it’s ground beef demand that’s the growth area, we can learn from that and play on that and maybe allocate some more resources to improve loin demand, round demand, rib demand, whatever that might be. That if you refine the understanding of why the public does or doesn’t like, it used to be your beef product, but more refined the product that you’re talking about or the one you merchandise, we can increase the value of all our products in the entire industry. So our ultimate recommendation and therefore hope for the industry would be that, there is ongoing support for these retail beef demand indices that we outline here and the core reason for that is refined and more frequently updated beef demand information is essential to guiding decision making and hopefully most producers increasingly recognize that beef demand, not just cattle supply, drives the prices they observe and the more we can refine and more quickly understand that, the more valuable everybody in the industry can understand what’s going on in their very, very complex industry. It gets more complex every day and if we can have more of these indices that make sense to be available, that only helps the decision making.

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