Key indicators of beef demand could be seen in the price of fed cattle and feeder calves in 2000. The year ended with record red meat production in spite of having fewer cows in the mix because of female liquidation over the past several years. Although cow numbers were down, we were producing more beef per cow. Corn was relatively cheap which led to feeding cattle longer which led to increased carcass weights and greater beef production. However, the price of fed cattle and feeder calves was high which is a signal that demand for our product was high.
Several reasons point to the increase in beef demand.
First, the year 2000 was characterized by a good economy with the consumer making more money. With many families being supported by income from two wages, consumers were buying what they wanted when they wanted it. This included SUVs, nice clothing, and higher priced beef cuts. Second, beef exports were on the rise in areas like Japan, Korea, and Mexico. Third, the diet and health food industry began to accept beef as a wholesome, protein rich food source filled with iron and vitamins.