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BEEF CHECKOFF NEWS Supply, Production, and Demand, What’s the Difference? Executive Director Mark Russell The amount of animal protein, including beef produced in the United States, is expected to increase over the next several years. With more beef supply, there is actually an opportunity to gradually increase per capita consumption of beef.
DECEMBER 2016
Board Member Spotlight: Keith Baxter is a seventh generation cattle producer in Greene County in Southwest Missouri. Together with his uncle, they own and operate K &K Cattle Farms, a commercial cow calf operation outside of Rogersville. Keith is proud to represent the producers of Southwest Missouri on the Missouri Beef Industry Council as the secretary for the board and is also active with the Missouri Cattlemen’s Association. Keith feels, as the number of consumers grows larger, it is more important than ever producers use every tool they have to get the beef message out, and believes the check off is a very powerful tool. Keith says, “As we look for new ways to improve our operations at home, so too should we look for new ways to promote our product outside our gates.”
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Beef Supply and Demand Producers have become much more interested in beef supply and demand conversations over the past months. Market fluctuations and weather impacts have caused significant impacts on cattle production receipts.
Terminology: Supply is per capita consumption, which is production, minus exports, plus imports, divided by population. Many times people want to refer to production as supply, and that is not completely accurate. It is just one component of supply. Production is number of head multiplied by carcass weight. It is not supply because you do not account for trade or population. Slaughter numbers, carcass weights and production are all supply components. Demand is the relationship between supply (per capita consumption) and price. It basically answers two questions: 1) How much product does the consumer want? And 2) How much are they willing to pay for that amount of product? Beef Supply Situation The rate of growth we are seeing today is due in large part to the herd rebuilding efforts from the extreme cowherd contraction during the drought in 2010 to 2012. Beef production is projected to rise 5 percent in 2016 and 5 percent in 2017. Overall animal protein production is projected to rise 2.7 percent in 2016. What Does The Beef Supply Situation Mean for Consumers? Beef retail prices are down nearly 10 percent from the highest prices in late 2014.