Consumers who value nutrition, animal welfare, and the environment tend to purchase less beef

New research released yesterday from leading agricultural economists Glynn Tonsor, Jayson Lusk, and Ted Schroeder finds that growing media coverage and consumer concern about climate change and the environment would lead to lower demand for beef.

The new report somewhat pushes back against a long tradition of economic research emphasizing prices as a key determinant of consumer demand. The authors, economists at Kansas State and Purdue, show that the impact of beef prices has declined over the years. They find that pork and chicken prices affect beef demand less than one might expect from prior research. They argue that media coverage, consumer demographics, and consumer "values" may matter more.

The study is based in part on consumer survey data and in part on an econometric analysis of beef sales data, market prices, and indices of media coverage for many topics.

The survey analysis found that consumers who value convenience, taste, and appearance have higher demand for ground beef. By contrast, consumers who value nutrition, animal welfare, naturalness, and the environment have lower demand for ground beef.

Source: Tonsor, Lusk, and Schroeder, 2018.

The econometric analysis found that beef demand declined in the 1990s and again in the Great Recession, but it has been rebounding recently from 2011-2017. In older years, much of the coverage in the media data concerned nutrient content issues such as zinc and protein. In recent years, the leading topic in the data is climate change. The study reported elasticities, showing the percentage change in quantity demanded in response to each 10% change in an explanatory variable. In recent years, each 10% increase in coverage of beef taste, tenderness and flavor was associated with a 5% increase in beef demand. By contrast, each 10% increase in coverage of climate change was associated with a 2% reduction in beef demand.

The study paid attention to the amount of media coverage, and to variation from one month to the next. Although media coverage of climate change was high in recent years, it did not jump around much from one month to the next. So, the study could not show definitively whether climate change coverage will strongly influence future changes in beef demand. Much depends on whether media coverage of climate change stays constant or increases over time.

The findings about environmental values and climate change are notable, because consumers may become more aware in the next several years that climate change is a critical global challenge. The journal Climatic Science reported in 2014 that reduced beef and dairy consumption is "indispensable for reaching the 2 °C target with a high probability, unless unprecedented advances in technology take place."

The findings about nutrition also are interesting. There is strong evidence to recommend reduced consumption of some meat products, such as processed meat. The nutrition science community has a vigorous ongoing debate about recommendations about meat intake more broadly. The most recent Dietary Guidelines Advisory Committee report recommended a healthy dietary pattern that is higher in vegetables, fruits, whole grains, and several other components, and "lower in red and processed meat."

The beef demand report released yesterday was funded by the Cattlemen's Beef Board, one of several major federal government checkoff partnerships designed to increase consumer demand for beef, pork, and dairy products. These checkoff programs were established by Congress, are overseen by USDA, managed by an industry board, and funded by a mandatory assessment or tax on producers. The federal government enforces collection of the assessment. With total funding of more than half a billion dollars annually, these boards are much larger than any federal initiatives to promote healthy eating or consumer lifestyle change to protect the environment.

The Cattlemen's Beef Board and its primary contractor, the National Cattlemen's Beef Association (NCBA), heard preliminary results in 2017 and were "invited to provide feedback guiding the remainder of the project." In the final report, the authors advise the industry on how to keep increasing beef demand.

Because the study found that values and consumer demographics, rather than prices, were key determinants beef demand, they advised the industry to focus on "sources of current demand strength." For example, the authors advised the industry to market beef to African-American and Hispanic consumers:

One specific household characteristic of note is how African-American and Hispanic residents exhibit strong desire for beef. As the share of the U.S. population comprised of these two races is projected to grow refined focus on specific desires of these groups is warranted.

As an economist in a nutrition school, I think the federal government's semi-public checkoff programs should avoid that approach [edited Feb 1], during a time of great concern about health disparities for Americans of different races and ethnicities. But, one can see how the analysis would tempt the beef industry to consider this approach.

On the flip side, the authors advise the industry on how to address "drivers of weakening demand":

Issues including safety and climate were found as current demand detriments. Ultimately the feasibility of impacting these areas must be considered before final decisions regarding industry investment are made.

As the climate changes, it is conceivable that media coverage will ignore the impact of food choices, and that consumer awareness will be stagnant. It also is possible that more sectors of the media will  take climate change seriously, and more consumers will come to appreciate the flavors and nourishment of lower-carbon food choices. In this second scenario, this study shows that the agricultural economy may need to accept and adapt to a reduction in per capita beef demand.