DENVER -- Consumer demand for beef dipped slightly in 2005 but the Beef Demand Index remains up more than 20 percent since reversing its 20-year decline in 1998, Cattlemen's Beef Board Chairman Al Svajgr announced at the Cattle Industry Annual Convention here today.



"We had such a stellar growth year for demand in 2004 that we didn't top that mark in 2005, even though we continued to enjoy terrific strength in the market, including strong prices for cattle throughout the year," said Svajgr, a cattleman from Cozad, Neb. The index decreased 3.6 percent in 2005 compared to that record growth in 2004, according to preliminary year-end results.



The Beef Demand Index is calculated based on a series of formulas developed by Wayne Purcell, director of the Research Institute on Livestock Pricing through Virginia Tech University's department of Agricultural and Applied Economics. The Index now is monitored by James Mintert, a professor of agricultural economics at Kansas State University.



The index reflects several specific factors, including per capita consumption and consumer retail spending for beef, but does not take wholesale beef prices into account.



"When demand advanced nearly 8 percent in 2004, bringing total growth between 2000 and year-end 2004 to more than 17.5 percent, we knew we couldn't sustain that kind of growth indefinitely. We have, however, accomplished demand growth of more than 20 percent since 1998, and we certainly far surpassed the goal we set in our last beef industry Long Range Plan: to grow demand by 6 percent during the first five years of this decade.



"At our Board meeting this week," Svajgr said, "we're voting on a new long-range plan that calls for building demand another 10 percent by 2010, so we're keeping focused on sustaining an upward trend over the long haul."



Cattle-Fax estimates that the increase in demand since 1998 has added about $250 per head to the price of fed cattle and about $200 per head to the price of calves.



"Producers should be proud of what they've been able to accomplish in the area of consumer demand," Svajgr said. "When it comes to the beef checkoff, we remain diligent about advancing demand-building programs, such as new-product development, nutrition research, youth education, beef safety efforts and promotion, as we move forward with continued optimism about opportunities for demand growth."



The beef checkoff program was established as part of the 1985 Farm Bill. The checkoff assesses $1 per head on the sale of live domestic and imported cattle, in addition to a comparable assessment on imported beef and beef products. States retain up to 50 cents on the dollar and forward the other 50 cents per head to the Cattlemen's Beef Promotion and Research Board, which administers the national checkoff program, subject to USDA approval.



SOURCE: Cattlemen's Beef Board.