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Consumers still demanding Certified Angus Beef

Consumers still demanding Certified Angus Beef
Demand index shows Prime sales has been good, but not as strong as Certified Angus Beef demand.

 

Demand analysis shows Certified Angus Beef has continued to grow in consumer favor throughout the last 14 years or so, despite tough times and high beef prices.

This is an interesting study and perhaps shines additional light on a story in Beef Producer a few days ago on how the word "Angus" in a beef brand raises quality rankings by consumers above what they would normally rank beef steak and ground beef products without knowing the Angus label.

Six years ago when CattleFax analyst Lance Zimmerman was a graduate student at Kansas State University, he and economist Ted Schroeder created a beef demand model that reached back to 2002.

Prime demand and CAB were boosted by exports over these years, but CAB held steadier in the tough years.

Since then, that demand model has showed Certified Angus Beef (CAB) has posted fairly steady growth in sales, with a less-strong performance by commodity Prime and a much more erratic performance by commodity Choice. The data shown in the charts suggests the brand may be more important than a quality ranking alone, at least where the official grading system is the metering stick.

When the model was updated recently with 2015 beef sales data, it showed a third year of modest growth for Choice demand and the strongest growth to date for the Certified Angus Beef brand. The 927 million pounds that Certified Angus Beef licensees sold worldwide in 2015 was a 5.7% increase in the presence of record-high beef prices.

On the index itself, the CAB changes added 35.65 points to reach 236.16 on the 100-point base, for a 136% increase since 2002 and 11 consecutive annual increases. Choice demand was up nearly nine points, its best showing since 2005, but still near that original base.

CAB simply outpaced commodity Choice beef demand, according to the demand index created by Lance Zimmerman and Ted Schroeder.

Zimmerman says some of this demand growth was clearly from exports to international markets. He says the global market of a billion more people since 2002 is growing in importance as the per-capita supply for U.S. consumers continues to decline.

He adds the 11% of beef exported in 2014 was an all-time high mark.

CAB President John Stika says CAB sent a record 14% of its growing supply to international markets in 2014, then sold the same tonnage last year. He adds that level has been growing at nearly 2% through the first half of 2016.

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