If people are going to pay more for beef, they seem to be opting for quality in their beef purchases.
Beef consumption may be basically static today, but it is a poor indicator of industry health anyway. My boss at CattleFax used to say that excess beef wasn’t going to be thrown in the ocean. In other words, we’ll consume all the beef that is produced. What’s important is the price at which that beef is purchased by consumers.
No one wants to see per-capita consumption of beef fall, but a lower number isn’t necessarily a bad thing if we’re exporting product at a higher price point than what we can get domestically. Domestic beef demand may not be garnering any headlines, but there are some positive things occurring on the demand front.
Exports continue to grow. We’re seeing phenomenal growth in the Japan and Hong Kong markets, as the entire Pacific Rim market continues to rebound from the loss of access due to BSE a decade ago next month.
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Mexico has also shown strength. In September, volume of exports jumped by 37% to Japan, 65% to Mexico, and 102% to Hong Kong. In aggregate September exports rose by 5%. Value is increasing as well, being up 16% to Japan, 56% to Mexico, 182% to Hong Kong, and more than 41% to South Korea.
In fact, our current pace is to be up 10% over last year’s record export levels of $5.51 billion. In September, we exported 13% of our production, so it’s a sizable and growing amount.
On the other side, steak is in. Even McDonald’s is offering premium menu items featuring steak. We’re even seeing improvement in some of the demographic groups that previously haven’t been that strong for beef – young females, for instance.
Yes, steak continues to be popular, and quality is a trait that is much in demand. Frankly, it’s left me a little surprised in that I assumed that as beef prices continued to escalate, premium products would be under the most pressure. The reality, however, has been almost the opposite. If people are going to pay more for beef, they seem to be opting for quality in their beef purchases.
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