Beef Prices, Demand and Expectations ClimbWed, 26 Feb 2014 12:50:08 CST
Americans will eat more chicken this year, but that shouldn’t alarm cattlemen.
“We’re going to lose market share in 2014 just by default,” says Kevin Good of CattleFax. “We’re expanding so we’re keeping more heifers and cows out of the mix so our production is going to be down about two-and-a-half pounds per capita. The poultry industry is expanding very rapidly and they can do that a lot quicker than we can with cheap corn in particular, and they’re profitable.”
CattleFax predicts the average chicken consumption will go up about two pounds per person, but that doesn’t mean that consumers are losing interest in beef.
“I think we need to step back and talk about beef demand as measured by quantity and quality, or quantity and price combined together for dollars that are flowing back to the industry versus market share which, a lot of times we get hung up with we’re losing market share, let’s say, to poultry, for example.”
Demand will be up along with prices. Cattlemen will receive more for their product, but expectations will increase, too, Good says.
“Domestically, we’ve got a group of customers that are demanding and will pay a premium for the top two-thirds choice and better product-branded product, basically. And then you’ve got a group of customers out there that, unfortunately, their income level has only been increasing about two percent per year over the last four years and, so, they’re unfortunately a segment we have a challenge with.”
To keep demand on an upward trek, beef must continue to be worth it in the minds of all consumer segments.
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