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Ag economist: Beef industry at ‘critical crossroads’

The U.S. beef industry is at a critical crossroads.

So says Glynn Tonsor, a livestock economist at Kansas State University.

“We’ve had abnormally high cattle prices the last several years, and the core reasons for that are both tight supplies and strong beef demand,” Tonsor says. “But I think we’re at a crossroads in the sense that most industry stakeholders also recognize we’re expanding the herd pretty quick. And as long as Mother Nature allows that, most folks—including myself—think we’re going to continue that process.”

As the “tight supply” part of the equation starts to ease and beef supplies become more plentiful, Tonsor says, the importance of “beef demand” will become more apparent.

“As an economist who studies this, of course, I always think beef demand is important—but it’s been a little bit masked by the tight supply story the last three, four, five years,” he says, “and, going forward, the ability to maintain higher prices is going to become even more apparently tied to beef demand.”

Tonsor tells Brownfield one of the industry’s priorities should be gaining a better understanding of how the changing composition of U.S. households, including age and ethnicity, will impact future beef demand.

Tonsor and his K-State colleague Ted Schroeder have developed a Beef Demand Prioritization fact sheet. It lays out possible scenarios, opportunities and priorities for maintaining a strong beef marketplace in the years ahead.

“I think 2015, we’re going to look back on, as a crossroads moment for all segments of the industry,” Tonsor says.

AUDIO: Glynn Tonsor

Link to Cattlemen’s Beef Board news release