3/3/2017 12:00:00 AM
New Research Examines Beef Demand Indices
demand is critical to understand and monitor as it directly influences overall
beef industry prosperity. When beef demand strengthens, beef and cattle prices
for the entire industry are higher than they otherwise would be, says Kansas
State University Economist Glynn Tonsor. This highlights the clear economic
value in accurately measuring beef demand. One way to do this is through
construction of an index that provides an easy to understand, single-measure
indicator of beef demand over time. A
beef checkoff-funded study by Glynn T. Tonsor, and Ted. C. Schroeder, both
of Kansas State University, recently examined the feasibility of developing new
foodservice and grocery store beef demand indices.
“Despite the usefulness of existing demand indices for monitoring demand
strength, all have a number of important limitations,” says Tonsor. “Indices
that are updated more frequently, and that can be dissected by product or
market region, can be especially informative about where demand is changing
most. Armed with such information, the beef industry could better adjust,
target and monitor product marketing strategies.”
As beef demand changes over time, insights from regularly updated demand
indices would provide the entire industry a barometer of demand strength.
Operators throughout the nation’s retail sector could use this information to
benchmark their own situation within the broader beef demand position. If
demand is improving in a retailer’s region but not in their operation, that
information might lead to more timely solutions to their marketing challenges.
Conversely, if a retailer’s operation is experiencing stronger beef demand than
their broader region, that could provide valuable lessons about the elements of
Click here to read an article by Tonsor about beef
demand in the Northeast region.
“Ultimately a deeper understanding of any situation requires ongoing effort
and appreciation for details that previously may have been ignored. Beef demand
is no different,” says Tonsor. “Previously available insights regarding beef
demand were limited to summarizing the situation in a highly aggregated,
national manner. Going forward, refined insights specific to geographic regions
or product type could be used to refine understanding of current beef demand.”
It is the researchers’ hope that this improved understanding will assist all
beef industry stakeholders, including retailers who act as the face of the
industry for consumers.