In its latest quarterly outlook, CoBank notes, “Consumers continue to pay premium prices for beef despite historically tight cattle supplies and elevated retail prices. At the same time, lower-cost protein alternatives such as pork and chicken have not absorbed as much demand as market fundamentals would suggest.”
The report says, “This disconnect highlights the importance of factors beyond price, including taste preferences, perceived quality, convenience, meal habits and foodservice menu offerings. While pork, chicken and eggs often provide a lower cost per gram of protein, consumers have shown a willingness to continue purchasing beef even as prices remain elevated.”
CoBank continues, “Animal protein markets are becoming increasingly out of sync with changing consumer purchasing behavior. Supply responses vary significantly by species, creating different market conditions for beef, pork and poultry producers.”
The report suggests protein purchasing decisions are influenced by a combination of economic and lifestyle factors rather than price alone.
This is good news for ranchers raising cattle in the short term, but long term it may be a hindrance. There is a monster out there called a drought which is affecting over 54 percent of the nation’s cattle herds.
Since about May, ranchers in drought-stricken areas have been selling their cattle as they have no forage or water. Under income tax laws, if they buy back cattle in a certain time period, they won’t have to pay taxes on the income received for those cattle.
If cattle keep going up in price, it is going to be hard to restock cattle herds, as producers could be buying them for a higher price.
We all know it is going to take more cattle numbers for beef products to lower in price.
For years now, cattle producers have been using better genetics to provide consumers a more tasteful and tender Prime cut of meat, and it is working. They are selling high Choice or Prime cuts of meat to individuals who want to lose weight, eat more protein and recognize the health benefits of beef.
An issue – which is good for both beef producers and consumers – is the U.S. Department of Agriculture (USDA) announcing a voluntary “Product of USA” label to identify products including beef which are truly born, raised, harvested and processed in the U.S.
Some cattle producers wanted a mandatory U.S. label, but nobody could decide who was going to foot the cost of having it. So far, the voluntary label is working, and USDA has announced 10 additional meat and poultry companies are planning to use it.
Also, food companies are changing the way they are measuring their perceived food safety success by simply demonstrating compliance with rules and regulations. Now most food companies are not only being inspected to ensure their food safety, but they are being challenged to prove their food safety compliance to the USDA.
The USDA is also providing dollars to help fund small to mid-size meat processing facilities.
We all like to eat, but it is more enjoyable if we trust our food is safe, nutritious and healthy.
Dennis Sun is the publisher of the Wyoming Livestock Roundup, a weekly agriculture newspaper available in print and online.
