A panel of beef industry experts discussed the state of the beef industry in the first in a series of Colorado Livestock Association webinars this fall.
Todd Inglee, executive director of the Colorado Beef Council, gave an overview of the state of the beef market, and he focused on what consumers are looking for, some of the state and national trends, as well as what the CBC is doing. to address these issues when promoting beef.
Inglee first discussed the basics of the Beef Checkoff.
“The check-off program was established, funded and governed by beef producers under USDA oversight,” he said, adding that Colorado launched its state-level check-off program in 1965, while the beef industry created the national program in 1985.
Funds were first raised nationally in 1987 and one dollar per head was collected each time a slaughter animal was sold. Inglee noted that importers also pay the equivalent of $1 per head.
“It’s really a state and national partnership,” he said. “All of the programs we offer focus on in-depth education, marketing, promotion and research.”
Inglee said beef councils get a lot of questions about why beef producers have to pay the dollar and why calf prices don’t reflect the extra advertising and promotion that’s being done.
“We are restricted by the federal government to demand stimulus programs only, so we cannot influence the market,” he said. “We are a demand driver.”
For every dollar levied, 50 cents stays at the state level and the other 50 cents goes to the Cattlemen’s Beef Board to be used for programs at the national level. All of this is done under the supervision of the United States Department of Agriculture.
“They oversee everything from our budget, marketing plan, messaging, etc.,” Inglee said. “We also go through mandatory annual audits from an independent perspective as well as a national organizational perspective.”
By law, the dollars collected cannot be used for lobbying or public policy participation.
“We cannot use any unfair deceptive practices. We cannot disparage other food groups,” he said. “We cannot promote a specific brand or trade name with a beef product without a special marketing agreement. And then, everything we do must be primarily related to the final product.
Inglee said the levy cannot talk about live cattle production – topics such as which breed or production practice is better than another are off limits.
Looking to 2022, what are some of the biggest issues facing the industry? For someone responsible for promoting beef and creating demand, Inglee said the most obvious is the market disruption caused by the pandemic.
“We still feel that,” he said.
Inflation and rising food prices are all linked to the pandemic market disruption. According to Inglee, his group is also studying social acceptance practices, or getting consumers to accept what beef producers are doing so they feel more comfortable buying and consuming beef.
“Obviously health and nutrition are important,” he said. “There probably isn’t another time and there has been more attention in our industry, looking through the prism of health and nutrition.”
International marketing is also a big issue.
“With so much added value to the carcass coming from low-value cuts sent and marketed overseas,” he said, “more than $400 per carcass comes from international marketing. Of course, this is always an important element.
When it comes to beef demand, prices and consumption patterns, consumer sentiment – the economic indicator that measures optimism about consumers and how they feel about their finances and the state of the economy – is really low in May 2022, Inglee said.
“This is the lowest level of consumer confidence since 1952 when they started keeping these records,” he said. “Obviously that was mainly due to inflation.”
From July 2021 to July 2022, food prices have increased by 11% and, according to Inglee, when ranking their preferred protein sources, consumers remain loyal to beef as a protein. Despite rising prices for meat and uncertainties in the broader economy, consumers still found value in buying beef from 2019 to 2022.
“Consumer willingness to pay for a steak increased by $1.82 per pound,” Inglee said. “So it obviously shows that consumers find value in beef and are willing to pay for it, which is good. It’s a good thing for the beef industry.
As for net beef consumption per capita, Inglee said it was interesting to see the change from its low in 2000 in 2014 to its peak in 2022.
“The lowest for a long time. We have steadily increased since that time,” he said. “But we are still strong. We are growing. I’ve seen other forecasts that say by the end of 2022 that number could even be as high as 58%.
If you look at retail and foodservice, in terms of pounds of beef sold, the numbers show an interesting outlook, especially during the pandemic. Over the past two years, the trendlines have been falling, but there is a lesson to be learned from this.
“Comparing where we are this year versus the last two years, I think price is starting to have an effect on sales,” Inglee said. “We start not selling as many books as we did the last two years from June 18 of this year.”
Between 2021 and 2022, books sold at retail fell by 4%. When looking at retail growth in dollar terms, it is evident that there is an increase in prices. Over the same period, prices rose 2% for retail growth. This has an effect on sales volume.
The catering service was totally shut down in 2020 due to the pandemic, then supply chain issues hampered it even more.
“But it came back – it bounces back in July 2022,” Inglee said. “Monthly foodservice sales are $86 billion. It’s just for the month. That’s a 12% increase from 2021. So that’s a positive detail. The restaurant business is definitely rebounding.
During the pandemic, e-commerce was huge, and grocery sales via this avenue “exploded,” according to Inglee.
“E-commerce and grocery sales are projected to account for 20% of all grocery sales by 2026,” he said. “Online shopping has increased by 42% during the pandemic and 63% of shoppers prefer home delivery.”
Inglee said beef marketers trying to communicate and influence sales need to consider these things, including third-party food and meat delivery.
Inglee discussed consumer profiles and found beef consumption in Colorado is on par, “if not just slightly above the national average.”
“Seventy-one percent of Colorado consumers report eating beef at least once a week,” he said. “We know a lot of people eat beef that often, so what about future consumption?”
What are the reasons people think about eating more or less beef? Thirteen percent of consumers, according to Inglee, would eat more beef because they like the taste.
“And the reasons why they would eat less – the prices,” he said. “You know, price is an important factor.”
Inglee said other reasons consumers would eat less beef include beef production issues and the environment.
Another thing they looked at is consumer perception between beef and what beef production is. Nationally, 67% of consumers have a positive perception of how beef is raised. In Colorado, Inglee said 69% had a positive perception of beef.
“It’s pretty good. We can always do better, but it’s still good,” he said. nationally, let alone 27% here in Colorado.”
Obviously these are things that growers and harvesters need to be aware of.
“And as we do our programming, we definitely need to communicate more about beef production to help them understand that it’s part of that social acceptance of our production,” he said.
When not asked in surveys, consumers respond that they are concerned about beef production because of animal welfare, followed by hormones, the environment and antibiotics.
“When you see a lot of information from the Beef Council, we’re trying to communicate to consumers about animal welfare and hormones,” he said. “While that doesn’t seem like a big deal to us as livestock producers, obviously it’s a priority for consumers and that’s why we’re doing these studies and we can see that. We have tried to address this issue and make sure they understand it in a better light.