Dogville

Declining Demand for Beef

Blip or Bust, an article by Wes Ishmael (2007) discusses the change in demand for beef over the past two years. Ishmael states that fed cattle prices have reached an all-time high. However, for the past two years consumer demand for beef has been declining. Ishmael writes about the connection between cattle demand and beef demand and how the two are different. He states that Cattle demand is linked to beef demand but the two do not affect one another in the short-run. Ishmael also discusses the Beef Demand Index (BDI) and how it relates to the changes in demand. Ishmael informs the reader of the lack of demand for beef between 1980 and 1998. Between 1998 and 2004 the demand was rising. Ishmael (2007) says, "The question is whether the growth spurt until 2004 was a blip in an ongoing, long-term decline, or whether the past two years are a blip in long-term resurgent demand (p. 20)."

A change in the supply of beef can occur from a number of instances. For one, a decline in the cattle population would affect the beef supply. Additionally, a change in the number of cattle slaughtered would change supply. Another cause for change in the supply occurs if the cattle population is not completely healthy. If the cattle are not healthy they cannot be used for beef. If the beef is not properly preserved, then the beef is no longer good for consumption. This would also cause a change in supply. Since the article does not tell the supply, the supply is assumed to be constant for the purpose of this paper.

A change in supply causes a change in price. Ishmael (2007) quotes James Mintert, a livestock marketing specialist for Kansas State University in saying, "Typically, consumers are willing to consume larger quantities of beef only at lower