This article seeks to re-address the subject of demand for beef and the best indicator of demand. Typical economic theory revolves around a demand curve (as prices increase, consumers demand less) and a supply curve (as prices increase, suppliers make more goods available). In theory, the intersection of the supply and demand curve predicts the price that will clear the market. If the demand curve shifts in a positive direction (consumers are willing to buy more of that good at any given price), it is positive news for that industry. The consumer sees stronger underlying value for that good.
Beef is different, and that difference is largely due to the fixed nature of supply. Secondarily, as the price of beef has increased recently, there are doomsayers that say demand for beef will be choked off. What
are the potential long-term impacts of actions taken in the channel of distribution and by the consumer due to high prices?
Discussion – For Beef, Consumption is Not Demand
Let’s look at three different foods and beverages that we consume – drinking water, cereal and beef –and discuss what the optimal measure is to determine demand.
To read the rest of the story, please go to: Beef Issues Quarterly