MEAT+POULTRY - August 2024 - 22

CONSUMPTION OUTLOOK
DEMAND
DETERMINANTS
Consumers' appetite for beef is
the key to processors' success in 2024
BY STEVE KAY | meatpoult r y@sosland.com
A
ll wealth that flows to the US meat and poultry
industry comes from consumers. How much they
are prepared to spend on the three main proteins
largely determines whether meat processors and livestock
producers make money or not. It is thus extremely important
to closely monitor demand at retail and foodservice the rest
of this year. This is especially true for beef, as it is the most
highly priced protein and subject to more pressure from
various economic factors.
Beef demand was surprisingly strong
throughout 2023 and into 2024 despite an
increase in retail beef prices and overall food
inflation. Many market analysts believed that
demand would begin to suffer this year because
retail prices remained at or close to record levels.
The US Department of Agriculture's (USDA) All
Fresh retail beef price in June reached a new alltime
high of $8.00 per lb, up 5.5% from June last
year. The June Choice price averaged $8.12 per
lb and was down 0.2% from June of last year.
The record-high All Fresh price in large part
reflected the record-high price of domestic lean
manufacturing beef (90CL) and record ground
beef prices. USDA's ground beef price in June averaged
$5.47 per lb, up from $5.15 per lb in May and up from $5.03
per lb in June last year. The 90CL price set new records for
10 weeks in a row from the second half of May. It averaged
$375.75 per cwt for the week ended July 20. This was far
above the Choice cutout, which averaged $317.07 per cwt.
22 MEAT+POULTRY | 08.24 | www.meatpoultry.com
The dog days
of summer
came early
this year as
a blistering
heat wave
in mid-June
extended from
the Midwest to
New England.
The record 90CL price reflects growing demand for
ground beef as lower income consumers are being forced to
trade down in their beef purchases. It also reflects a sharp
year-on-year decline in cow slaughter. At the current harvest
rate, annual cow slaughter is projected to decline by 963,000
head, according to Andrew Gottschalk of HedgersEdge.com.
Another factor for at least the next month is weather.
The industry entered July knowing that the best demand
month of the year was behind it. It was now
in the midst of the so-called dog days of
summer, which usually means a decline in
beef sales because high temperatures force
more Americans to stay indoors and eat cold
cuts rather than grilling outside. The dog days
came early this year as a blistering heat wave
in mid-June extended from the Midwest to
New England. A heat wave currently persists
in many parts of the country, especially west of
the Rockies.
The record-high beef prices began to have
a negative impact on wholesale prices in July.
They also drew Americans to buy more pork
and chicken, as prices are much cheaper.
USDA's retail pork price in June averaged $4.88 per lb, down
from $4.92 per lb in May but up 4.3% from June last year. The
chicken price averaged $2.01 per lb, the same as in May but
up 3.1% from last year. As in the past, beef is at a significant
price disadvantage when Americans face financial stress
such as ongoing food inflation.
The Toidi - stock.adobe.com
http://www.HedgersEdge.com http://www.meatpoultry.com
MEAT+POULTRY - August 2024

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