Consumers Sending Market Clear Message: They Want High-Quality Beef and are Willing to Pay for ItMon, 29 Oct 2018 10:44:09 CDT
Randy Blach is the chief executive officer at the cattle industry’s analytics arm, CattleFax. He spoke to Angus producers in the Certified Angus Beef family at their recent conference in Hawaii about how beef demand has turned around in this country and where he believes the US cattle industry is headed when it comes to producing high-quality US beef that consumers are requesting.
“Today, 20 percent of all the beef that will be fed and harvested in the US this year will be Certified Angus Beef or higher,” he said, citing evidence of consumers’ preference for high-end beef in the market spreads. “All you have to do is look at the spreads. The spreads have held together very well. The Choice/Select spread is at $10 again this year. That’s where it averaged over the last 15 years. So, even though the grade has improved 25 percent - again going from 55 percent Choice and Prime to 80 percent Choice and Prime - the spreads tell us that’s what the market wanted… People are willing to pay more for that type of eating experience.”
While Blach admits there has been some erosion seen into the Prime spread over the past year where supplies have increased, he says to him, he see it as an opportunity for end-users to experience the eating quality of Prime beef. Regardless, the story that is being told at the meat case is one of growing success in the beef industry. According to Blach, beef accounts for $60 billion of increased spending by the consumer. Pork and poultry combined, he says, only totals $53 billion in increased spending.
“What we’re seeing is from our lows back in 2013 and 2014, we’re eating about four more pounds of beef per person in the US, but we’re also willing to pay more for that,” he said. “So, what we’ve seen is a $60 billion increase in beef spending from the lows in 1998 - that’s a seven percent increase in overall spending market share against all the proteins.”
Listen to Randy Blach of CattleFax discuss the market’s growing demand for high-quality beef, with Radio Oklahoma Ag Network Farm Director Ron Hays, on today’s Beef Buzz.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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