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From staff reports
Demand for animal meat remains high, according to CoBank’s lead economist, Brian Earnest. He predicts consumers will buy more poultry from now at least until the end of the year. The major factor in animal protein choices for consumers will be inflation and wages, that is not rising fast enough to keep increased costs of living. Earnest cites a report from USDA in March that shows a 15% across-the-board increase in retail meat prices, which equates to about $1 more per pound for beef and about 30 cents more per pound for chicken. However, consumers are not seeing a cost increase that factors in the higher input costs for producers, such as labor, fuel, and feed prices. Earnest thinks that grocers are not funneling those costs onto consumers so as not to lose cost share in the food market.
In a quote from a DTN article, “The typical response of poultry producers has been that if times are good, they expand. But they are conscious of the higher costs for inputs,” said Earnest. He added he’s been told poultry companies don’t have the labor they need for plants.
As for beef, he says that demand is stable. “Typically, higher prices erode consumption,” he noted. “From 2000 to 2010, that is what happened. Retail beef prices rose about 7% a year between 2009 and 2015, and per capita beef consumption declined more than 11%, going from 61 pounds to 54 pounds.
“From 2017 to 2019, retail beef prices rose just 2% annually. Since 2020, however, consumption of beef has not declined, even with all-time highs, and increased at more than 20% from 2019 to 2020. Consumption actually went up 1.4% during this time, and per capita, beef consumption is now at 58.4 pounds, an 8.6% increase since 2015.”