Consumer Confidence in Beef Strong in the Face of Single Case of BSE

Consumers remain confident in the safety of U.S. beef despite the discovery of a single cow with bovine spongiform encephalopathy (BSE) in Washington State last month, according to checkoff-funded research conducted last week. 

Awareness among consumers of BSE was at 96 percent following the discovery, compared with 61 percent last September.  Nevertheless, confidence remained strong, going from 88 percent in September to 89 percent last week.  The research, commissioned on behalf of the Cattlemen’s Beef Board and state beef councils by the National Cattlemen’s Beef Association (NCBA) was conducted Dec. 29 and 30.

The research is conducted through the checkoff by the research firm IPSOS-Reid.   It is statistically representative of the U.S. adult population, and has a plus/minus 3.2 percent margin of error.

“The results of the research demonstrate that our efforts to assure consumers a safe and wholesome food supply are having an impact,” according to Andy Tucker, chairman of the Cattlemen’s Beef Board and a beef producer from Florida.  “Now we must aggressively evaluate all ways we are working through retail and foodservice channels to move beef domestically.”

For example, the NCBA retail and foodservice marketing staff, working under a checkoff contract, is contacting account executives to encourage additional featuring and special menuing of beef products.  Other possible initiatives for moving product quickly through the U.S. system are also being examined.

Opening Export Markets Key

Domestic efforts to increase marketing are being done at the same time NCBA, with member dues dollars, is working with other industry groups to encourage foreign trade partners to open their doors to U.S. beef.  Currently about 90 percent of the $3.5 billion beef export market has been closed to U.S. product.

“Significantly improving the current market depends very much on the willingness of our foreign trading partners to base their import decisions on science and recognize the complete safety and wholesomeness of the beef products we sell,” according to Eric Davis, cattle producer from Bruneau, Idaho, and NCBA president.  “While the confidence our consumers have shown in our product is important, it’s the foreign market that we’ve lost that is causing the biggest strain on our producers’ pocketbooks.”

Davis says the export ban has caused a temporary excess beef inventory that will need to be domestically absorbed.   In addition, there is at least $200 million in beef products that were headed to foreign countries prior to this situation currently heading back to this country that must be addressed. 

Timing is Significant

Randy Blach, executive vice president of Cattle-Fax, says that during the fourth quarter of 2003 beef production was at a historically small level – with the smallest per capita net beef supplies since the late 1970s.

“With wholesale beef prices having dropped 10 to 15 percent since the announcement in Washington state, foodservice operators and retailers should have increased incentive to feature and put specials on numerous beef cuts,” Blach says.  “This action is made even more attractive by the continued strong confidence in U.S. beef by consumers.”

Fed steer prices are 20 percent less than pre-announcement, and showing some signs of stability.

An unknown, according to Blach, is how much of the product that was destined for the U.S. from Australia and New Zealand will be redirected to Pacific Rim countries.  This will be a factor in determining how much product will have to be absorbed by the domestic market near term.

Davis says both producers and consumers will be affected by the recent events.

“As U.S. cattle producers, we recognize our responsibility to provide a safe and wholesome product to consumers,” says Davis.  “At the same time, as the nation’s largest cattle organization, NCBA also has a tremendous responsibility to help secure a stable and healthy marketing environment for our producers.  We’ll continue our work to develop domestic and international markets that realize the safety and value of our U.S. beef products.” 

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. The checkoff assessment became mandatory when the program was approved by 79 percent of producers in a 1988 national referendum vote. Checkoff revenues may be used for promotion, education and research programs to improve the marketing climate for beef.

Producer-directed and consumer-focused, the NCBA is the trade association of America’s cattle farmers and ranchers, and the marketing organization for the largest segment of the nation’s food and fiber industry.