Cattle prices have leveled out over the last week or so. That has helped the market recover some of the losses seen from the cattle market collapse from August and September. On a regular basis, Kansas State University Extension Livestock Market Economist Dr. Glynn Tonsor calculates a quarterly all-fresh beef demand update. For the third quarter, he said the index was up almost nine percent over last year. That is also the sixth consecutive quarter of at least a five percent increase in demand. Tonsor said that means the public is paying more beef than anticipated.
“They are seeing more value in them, they are willing to open up their wallets and spend more money on them,” Tonsor said. “That means more money is going throughout the entire industry.”
Tonsor said the nine percent increase in the index stems from a two percent increase in per-capita consumption and a six percent increase in inflation adjusted price for the quarter. By increasing both price and quantity, he said the demand curve shifted out. These third quarter numbers are confirmation of a three year trend of positive beef demand strength.
U.S. beef demand has remained strong. These third quarter numbers are some of the best demand numbers seen since the early 1990’s. This retail beef demand index dates back to 1990. There was a lot of demand erosion throughout many years in the 1990’s. Tonsor said these past three years has offset or erased some of those prior losses.
“So, we’ve made a lot of headway of regaining what was lost, if you like, throughout the 1990’s,” Tonsor said.
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