With cash cattle prices moving higher, beef producers are gaining some relief from the economic crunch that encompasses most of agriculture. But more important is the growing evidence that suggests an end to beef's 20-year decline in demand.

October red-meat production was the largest monthly total ever. Weekly red-meat production was over 925 million pounds, 4 percent above 1998 and nearly 8.5 percent higher than the five-year average. At the same time, cash fed-cattle prices jumped from the mid-$60s to more than $70 per hundredweight by month's end. Wholesale beef and pork prices also have increased as production has expanded. Wholesale pork prices are 20 percent higher than last year while wholesale beef prices are up 12 percent.

Beef's market share, tracked through meat spending, was higher during the first nine months of the year-the first increase in 20 years. From January through September, beef spending was up 5 percent from the previous year and totaled $36.1 billion. Beef's share of meat spending during the same period was 40.7 percent, up 0.5 percent from last year's annual share of 40.2 percent. While the increase is slight, analysts believe it could point to a significant shift in beef's favor over the next few years.

Increases in market share probably are due to a combination of factors, including large supplies, which result in competitive prices. Better demand for beef products and a strong economy also play a significant role in the trend reversal. But given the fact that beef is selling at higher average prices in the face of record-large beef production and record-large pork and poultry supplies, one can logically reason that our industry's demand-building programs and strategies over the past few years are beginning to work.

Your $1-per-head beef checkoff funds our industry's demand-building programs. The most visible program is the "Beef. It's what's for dinner." advertising campaign. But it's also funding important research to develop new products and provide educational materials about the nutritional qualities of beef.
Another program that has been revived for next year is the Best New Beef Products Awards 2000. This program, you may remember, was launched in 1998 when Harris Ranch Beef Company, Selma, Calif., won a $250,000 grand prize for its microwaveable Fully Cooked Pot Roast with natural gravy. The 2000 competition includes four awards totaling $250,000 offered to the retail and food service beef products that most effectively address consumer and food service needs for beef in innovative ways. The best new retail beef product and the best new food service product will receive $100,000 each. Two other awards of $25,000 are offered to the best new beef product marketed by a small company (under $10 million in annual sales) and the most innovative, commercially promising new beef product. Recipients of the awards must use their prize money to help promote or develop new beef products.

Individually, neither the "Beef. It's what's for dinner." campaign nor the Best New Beef Products Awards are responsible for the apparent improvement in beef demand. But those programs, together with numerous others supported by your $1-per-head checkoff, can claim much of the credit for beef's recent gains. It's much too early to claim victory in the battle for market share. But your industry is making significant gains with strategies that include improved overall beef quality, new products and effective promotion.